Transcript National Budget 2011/2012
South Africa: National Budget 2011/2012
Kevin Lings Economist 23 February 2010
2
SA GDP growth (government estimate) % 6 5 4 3 2 1 0 -1.2
0.0
-1 2.1
4.2
2.4
-0.3
-1.0
-2.1
1.2
3.2 3.1
4.3
2.6
0.5
2.4
4.2
2.7
3.7
2.9
4.6
5.3
5.6 5.6
3.6
-1.7
2.8
3.4
4.1
4.4
-2 -3 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Fixed Investment Growth (government estimate) % 17 14 11 8 5 2 -1 -4 -2.3
-7.4
-5.3
-0.6
8.2
10.7
9.0
5.7
4.8
-7.6
3.9
2.8
3.5
10.2
12.9
11.0
12.1
14.0 14.1
-2.2
-3.6
3.9
5.5
6.8
-7 -10 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Current account (government estimate) % of GDP -6 -7 -8 -9 -2 -3 -4 -5 2 1 0 -1 7 6 5 4 3 4.1 4.2
6 2.8
1.6 1.4 1.2 1.5
2.1
0 -1.7
-1.2 -1.5 -1.8
-0.5 -0.1
0.3
0.8
-1 -3 -3.5
-5.3
-7 -7.1
-4.1
-3.2
-4.2
-4.9 -5 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Inflation (CPI) (government estimate) % 11 10 9 8 7 1 0 -1 -2 6 5 4 3 2 5.6
-0.9
2.1
3.2
6.1
9.9
7.1
4.3
03 04 05 06 07 08 09 10 4.9
11 CPI forecast 5.2
5.5
12 13
Open Budget Index 2010 Index out of 100 South Africa New Zealand UK France Norway Sweden US Chile Brazil South Korea Germany India Spain Czech Republic Russia Italy Portugal Turkey Argentina Ghana Namibia Mexico Botswana Kenya Thailand Malaysia Zambia Morocco Angola Nigeria Vietnam China Saudi Arabia
0 20 40 60 80 100
SA government’s budget 2011/2012 – main indicators. Consolidated budget Revenue Expenditure Budget deficit Deficit as % of GDP 2010/2011 R billion
755.0
897.4
-142.4
-5.3%
2011/2012 R billion
824.5
979.3
-154.8
-5.3%
% change
9.2% 9.1%
Government expenditure & revenue as % of GDP % 35 34 33 32 31 30 29 28 27 26 25 24 Fiscal years Huge increase in expenditure Expenditure as % of GDP Revenue as % of GDP
SA budget deficit as % of GDP % Fiscal years, main budget 2 -5 -6 -7 -8 1 -1 -2 -3 -4 -9 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
SA budget deficit as % of GDP (consolidated budget) % Fiscal years 3 2 -2 -3 -4 -5 1 0 -1 1.7
-1.2
-6.6
-5.3
-5.3
-4.8
-3.8
-6 -7 -8
Fiscal balance as % of GDP - 2011 % 0 -2 -4 -6 -8 -10 -12
Breakdown of tax revenue (20011/12) Individuals 34.1% Electricity levy 0.9% Customs 4.0% Excise duties 3.4% Fuel levy 5.0% Other 6.1% VAT 27.1% Companies 19.4%
Government budget revenue overruns Rbn 45 35 25 15 5 -5 -15 -25 -35 -45 -55 -65 -75 8.2
6.5
5.2
14.9
13.3
-5.1
20.9
41.2
29.5
13.4
-14.5
-66.4
16.6
SA budget revenue overrun in 2010/2011: R16.6bn Rbn VAT Custom duties Personal Tax Other tax revenue Fuel levy Property taxes Corporate Tax Excise duties SACU Provinces/public entities -10 -5 0 5 10 15 20
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IDC Employment fund Job summit Tax incentives
Budget revenue increases 2011/2012 0 2 4 6 8 -4 Transfer duties Fuel levy Skills development levy Companies Excise duties STC TAX REVENUE VAT Individuals Customs duties -2.7
-2 10 7.6
8.7
8.8
9.5
9.7
10.3
10.8
10.9
12 14 13.1
After tax proposals
Main tax proposals 2011/2012 Personal income tax Personal income tax adjustment Adjustment in monetary thresholds Business tax Dividend cession scheme Taxes on property Adjustment in transfer duties Indirect taxes Increase in fuel levy Increase in excise duties Increase in electricity levy LOSS ON TAX PROPOSALS Additions Rm Subtractions Rm -8 350 -8 100 -750 500 500 -750 -750 4 985 1 900 1 935 1 150 -4 115
Personal tax relief in previous tax years
●
Tax relief for individuals:
●
1998/1999
●
1999/2000
●
2000/2001
●
2001/2002
●
2002/2003
●
2003/2004
●
2004/2005
●
2005/2006
●
2006/2007
●
2007/2008
●
2008/2009
●
2009/2010
●
2010/2011
●
2011/2012 R4.0bn
R5.0bn
R10.0bn
R8.0bn
R15.0bn
R13.0bn
R4.0bn
R6.8bn
R13.5bn
R8.4bn
R7.2bn
R13.0bn
R6.5bn
R8.1bn
Tax reduction for individuals <65 Taxable income (rands). Tax relief of R8.1 billion in 2011/2012 60000 65000 70000 75000 80000 85000 90000 100000 120000 150000 200000 250000 300000 400000 500000 750000 1000000
495 495 495 495 495 495 495 495 495 1195 1195 1895 1895 2895
0 500 1000 1500 2000 2500 3000 3500
3615
4000
4175 4175
4500
Breakdown of Fuel Levy – R2.61 per litre Customs & Excise Levy 1.5% Road Accident Fund Levy 30.6% General Fuel Levy 67.9%
Other tax issues:
● New tax bracket/threshold for
people aged 75 years and older
● New tax on
gambling
(15% on winnings over R15 000) ●
Threshold for interest income
raised only fractionally (R22 300 to R22 800 for under 65, and R32 000 to R33 000 for 65 and over) ● International
air passenger departure tax
increased (R150 to R190 per passenger) ● Discussion on a possible
carbon tax
Customs union payments by SA Government Rbn 30 25 20 15 10 5 0 1.8
2.8
3.0
3.1
3.2
3.9
4.4
5.2
5.6
7.2
8.4
8.2
8.3
9.7
13.3 14.1
25.2 24.7
28.9
27.9
17.9
21.8
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IDC Employment fund Job summit Tax incentives
Breakdown of expenditure (including interest) Other 6.9% State debt cost 8.3% Defense 4.1% Public Order and Safety 9.8% Economic Affairs 11.6% Housing and community 10.4% Education 20.7% Social Protection 16.0% Health 12.2%
Budget Expenditure increases in 2011/12 Housing and community State debt cost Defense Social Protection Health Education Total Public Order and Safety Economic Affairs -6.8
-10 -5
•Consolidated national and provincial expenditure
0 5 10.7
9.1
8.2
10.3
10.0
13.3
15.0
17.1
10 15 20 %
Key expenditure items % of total
Defence Police, courts, prisons Education Health Social security Economic services 1990/91 13.7
5.6
20.9
10.1
10.8
05/06 06/07 5.7
10.9
18.6
11.2
16.6
11.2
5.1
10.0
18.2
11.4
15.2
13.5
07/08 08/09 09/10 10/11 10/12 4.9
10.2
19.6
11.0
16.3
12.9
4.4
9.9
20.0
11.0
15.8
14.2
4.0
9.6
19.6
11.6
15.6
15.8
4.1
9.9
20.5
12.0
15.7
13.5
4.1
9.8
20.7
12.2
16.0
11.6
Social grant beneficiary numbers
● Number of people obtaining a social grant ● April 2000 ● April 2003 ● April 2004 ● April 2005 ● April 2006 ● April 2007 ● April 2008 ● April 2009 ● April 2010 ●
April 2011
●
April 2012
●
April 2013
●
April 2014
2 946 618 5 808 494 7 941 562 9 406 829 10 918 263 11 983 141 12 374 770 13 066 118 13 958 894
14 892 000 15 713 000 16 223 000 16 709 000
Government salary payments: up 61.5% in past 3 years 320 Budgeted to rise by only 7.9% in 2011/12?
280 Grown by an average 17.3% p.a. for past 3 year 240 200 160
South Africa’s employment problem Millions Create 5 million jobs in 10 years 19 18 17 16 15 14 13 12 11 10
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IDC Employment fund Job summit Tax incentives
Fiscal measures to improve employment:
●
Youth employment subsidy
: R5 billion over 3 years. Tax credit administered by SARS. Expected to create 178 000 new jobs ●
Learnership tax incentive
extended for 5 years, but will be reviewed (was due to expire in Sep 2011. Have not been widely used) ●
Training layoff scheme
has utilised R21.3 million in training allowances and supported 7 286 workers ●
Expanded public works programme
budgeted at R73 billion over next 3 years ●
Jobs fund
: R9 billion. Available to both private and public sector. Expected to employ 50 000 to 100 000 over the ‘medium term’
Public sector infrastructural spending Rbn 350 R808.6bn
300 250 200 150 100 50 0 70.7
83.6
130.2
196.5
235.2
260.1
252.8
269.3
286.4
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IDC Employment fund Job summit Tax incentives
Financing the National Budget
National deficit/surplus Extraordinary receipts Extraordinary payments Net borrowing requirement 2010/2011 Outcome -143.36
3.15
-0.80
-141.01
Domestic short-term loans Domestic long-term loans (net) Foreign loans (net) Change in cash balance Total financing 35.10
139.15
-2.27
-30.97
141.01
2011/12 Budget -159.07
1.35
-0.15
-157.87
22.00
135.37
5.00
-4.50
157.87
Government net domestic long-term bonds issued Rbn Fiscal years 160 140 120 100 80 60 40 20 0 -20
Government net foreign funding Rbn Fiscal years 35 5 0 -5 -10 30 25 20 15 10
Public sector borrowing requirement Rbn Fiscal years 320 300 280 260 240 220 200 180 160 140 120 100 80 60 40 20 0 -20
Government domestic debt as % of GDP
% 50 45 40 35 30 25 20 15 10 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14
Government total loan debt as % of GDP
% 55 50 45 40 35 30 25 20 15 10 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14
Debt servicing as % of total spending % 23 Fiscal years 21 19 17 15 13 11 9 7 5
Evaluate the budget Aims Budget should be guide to govt's intentions Budget deficit contained Spending - efficiency Revenue - no ad hoc measures - efficiency of collection Positive impact on the economy - Growth - Inflation Exchange control relaxation Encouraging private sector investment Unemployment and Job creation Law & Order, Crime and Violence Poverty relief Encourage savings Encourage small business Innovation Negative No No No No No No Positive Yes Yes Yes Yes Yes Yes Yes Yes Yes?
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IDC Employment fund Job summit Tax incentives
Thank You