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Pretoria - Inflation is a double-edged sword for the fiscus - it bumps up revenue and nominal gross domestic product (GDP) but it also increases expenditure. Inflation is the biggest factor behind the extra R24.4bn in extra spending that Finance Minister Trevor Manuel asked parliament to approve on Tuesday.
The adjusted appropriation bill for 2008/09 proposed that an extra R7.7bn be spent to cover costs relating to higher-than-expected inflation, including for personnel and capital projects.
In addition, government will contribute R4bn more than initially projected this year to Eskom as part of a three-year R60bn loan.
Another big slice of extra spending parliament has to approve was the R2,5bn allocated for the Political Office Bearers' Pension Fund.
The rest of the additional expenditures were:
- Approved rollovers of R2.4bn;
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R2bn for disasters such as fires and animal diseases;
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R107m for mass literacy;
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R265m for school nutrition;
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R1bn for nurses;
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R50m for infant and child vaccines;
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R1.4bn for World Cup stadiums;
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R600m for high-speed internet access between the stadiums and Telkom's network;
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R2.5bn for the Road Accident Fund;
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R500m of self-financed expenditure;
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R180m for electricity demand management and R20m for improving energy efficiency in government buildings.
- Fin24.com