Budget policy statement: all the issues and promises at a glance

2010-10-28 00:00

FINANCE Minister Pravin Gordhan’s much-anticipated Medium-Term Budget Policy Statement adressed several key issues and promised more money for specific occupations.

• Treasury is investigating tender fraud amounting to R25 billion; Plans an overhaul of supply chain management processes to combat tender fraud.

• Gordhan more upbeat on 2010 economic growth — anticipates 3% growth in 2010 and 3,5% in 2011;

• Tax revenue overrun lowers budget deficit;

• No plans to weaken rand — exchange control reforms described as mild;

• Unions warned on wages — proposed budget framework makes provision for average annual growth in compensation of 6,3%;

• Downplays National Health Insurance (NHI) tax burden but government health spending to grow to over R127 billion by 2013 from R109,7 billion in 2011/12 as NHI takes shape;

• R1bn for youth employment;

• Rand reacts to mild exchange control reforms — weakened further to above R7 to U.S. Dollar after Gordhan’s speech

• Speculation that tax hikes could be on the cards in the 2011 budget.


• More money for police, military and courts;

• Money allocated for Occupation Specific Dispensation (OSD) salary adjustments include:

— the justice cluster: R320 million;

— public health sector: R350 million;

— other salary costs to cover higher remuneration costs in national departments: R2,3 billion;

— natural disasters R363,4 million;

— HIV/Aids prevention (R100 million) and drought relief.

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