Gigaba vows to spend on poor, despite fiscal pressures

2017-10-25 14:21 - Liesl Peyper

Cape Town - Despite fiscal pressures, government will continue spending on core social programmes to benefit poor South Africans, Finance Minister Malusi Gigaba said in his mini budget speech on Wednesday.

Medium-term spending over the next three-year period will grow by an annual average of 7.3% - from R1.6trn in 2017/18 to R1.9trn in 2020/21.

The fastest growing items of spending are community development (7.9%), learning and culture (7.6%), and health (7.5%).

In his mini budget speech, Gigaba paid special attention to the role the Mandate Paper, drawn up by the Department of Planning, Monitoring and Evaluation under Minister Jeff Radebe, has played in identifying spending priorities over the next three years.

According to the Mandate Paper, the identified spending priorities will require “large additional resources”. Gigaba however pointed out that any increases in additional policies and programmes will have to be accompanied by parallel tax increases.

The following priority spending areas have been identified in the Mandate Paper:

  • Funding for post-school education and training
  • The National Health Insurance (NHI) scheme
  • Qualified teachers for Grade R
  • Implementation of a defence review
  • Land restitution
  • Large infrastructure projects such as township revitalisation, agri-park development rural roads, broadband and water infrastructure and maintenance of existing infrastructure, especially at municipal level.

Gigaba in his speech said the estimated infrastructure spending of R948bn over the medium term constitutes close to 6% of GDP.

To improve the way state departments spend money on infrastructure, Cabinet has approved a budget facility for infrastructure to overcome shortcomings in planning and execution of large infrastructure projects. 

* Visit our Mini Budget Special Issue for all the news, views and analysis.

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