Bua Briefs 134

20 February 2009

2009 Budget highlights

The Minister of Finance, Mr Trevor Manuel, tabled the National Budget in Parliament on Wednesday 11 February 2009. This was delivered against the background of global economic recession. In its response to this challenge, government remains committed to poverty alleviation and upliftment of the poorest of the poor.

Government is increasing its investment in programmes aimed at creating employment opportunities

Some R4,1 billion is set aside for the second phase of the Expanded Public Works Programme. This aims to increase the number of full-year equivalent job opportunities to over 400 000 over the next five years and to increase the duration of temporary jobs.

R3,7 billion is added for low-income housing projects, and R1 billion goes to the Umsombomvu Youth Fund.

Public education remains our single largest investment, as it is the key to creating employment.

The largest increases in spending go to assisting the poor

Government's spending on social security will total R13,2 billion.

  • Extension of the Child Support Grant to children aged 15 years of age will be implemented in the 2009/10 financial year.
  • Relief grants will be provided to assist distressed households with food parcels and cash vouchers. Some R4 billion has been added to the School Nutrition Programme.

There is a R1,2 billion boost for rural development and agricultural starter packs to poor homes.

The acceleration of economic growth remains fundamental

Government's spending of R787 billion on public infrastructure over the next three years constitutes one of the largest areas of expansion of public-sector spending. This includes investments in transport, school, health and municipal infrastructure, electricity generation and telecommunications.

These investments create jobs while stimulating investment and enabling economic activity, for the long-term benefit of all South Africans.

This constitutes a major part of the response to the current global recession. However, unlike other parts of the world, South Africa is fortunate that its public infrastructure programmes are already in the implementation phase.

Government is also addressing the barriers which prevent entry of new and small businesses and small farmers.

South Africa's sound macroeconomic policy puts us in a good position to respond to the economic downturn

The National Credit Act, 2005 [PDF] 1401 kb prevents reckless lending by financial institutions.

Government's prudent spending policy in the past, where government ran a budget surplus as opposed to a deficit, now allows government to spend, while other governments are not able to.

While the budget deficit will rise, it remains at 2,5% of gross domestic product. South Africa will not be burdened with servicing excessive debt in the future.

South Africa's national budget is ranked the second most transparent budget in the world.

State of the Nation Address highlights

On the 6 February 2009, President Kgalema Motlanthe, delivered his assessment of the state of the nation. The President reflected on the tremendous strides made in 15 years of democracy, through the work of South Africans from all walks of life. However, South Africa as a country faces many challenges, made harder by the global economic downturn. The hope and resilience that characterises South Africa will enable us to overcome the challenges we face together.

Our democracy is steadily growing stronger

Many aspects of our constitutional order have been tested in the recent past, and passed the test to reveal a democracy that is exceptionally resilient.

Strong, representative institutions and an independent judiciary have been established.

Community engagement has been strengthened through innovative platforms for citizen participation.

Much has been done to improve co-ordination in government and foster good governance.

However, service delivery needs improvement in many areas and implementation weaknesses are limiting the effect of anti-corruption campaigns.

Social programmes have improved peoples lives

Social grants have been addressing income poverty.

Access to water, electricity and sanitation has substantially increased, with free basic services to poor households.

Forty percent of learners have access to free education, primary healthcare is available free to pensioners and the poor, and 95% of South Africans now live within 5 km of a health facility.

Asset poverty has been addressed through housing and land programmes.

However, poverty remains a big challenge. Despite declining poverty and faster economic growth, income inequalities have not decreased and in some sectors have increased.

Macroeconomic stability has been achieved, creating the conditions for faster and shared growth

Social grants have been addressing income poverty.

The economy has grown every year since 1994. In 2007, unemployment began to fall. Government has reduced its debt, and investment in infrastructure has increased.

Interventions are being made to transform the economy from one of exclusion to inclusion.

Programmes such as the Expanded Public Works Programme, the Integrated Food Security Strategy [PDF] 226 kb and rural development interventions are ensuring the fruits of growth are shared.

South Africa is feeling the effects of the global economic slowdown. This will require new interventions or intensification of economic programmes.

The fight against crime is having an impact

Most crimes have stabilised or decreased since 1994

Partnerships such as community policing forums and Business Against Crime have made an important contribution.

There has been a fight against organised crime, and tighter regulation of firearms.

Specialised courts and the amendments to the Sexual Offences Act, 2007 [PDF] 3265 kb and Children’s Act, 2005 [PDF] 2648 kb strengthen government’s hand against child and woman abuse.

However, violent and organised crime remains a challenge. There is a need for more integrated action across the criminal justice system and greater mobilisation of society to fight crime.

South Africa has made its mark in the international community, working for the interests of the country, of Africa and of the developing world

South Africa has made a significant contribution to the promotion of African peace and development.

South Africa has worked to strengthen co-operation among developing countries, forming new strategic relationships with countries such as Brazil, India and China.

In 2007, South Africa became a non-permanent member of the United Nations (UN) Security Council.

Work needs to continue to ensure that the interests of South Africa, Africa and the developing world are served internationally, especially in the context of the economic downturn.

But this is not yet enough. To meet the challenges going forward will require a collaboration of government and the people around core priorities

We need to speed up growth and transform the economy, while ensuring new wealth is shared. Special measures will be put in place to enable South Africa to weather the global economic recession.

Poverty must be overcome. Key is to reduce unemployment through education and increasing people’s chances of entering the labour market and setting up their own businesses.

Essential is continuing to build social cohesion and strong, legitimate public institutions.

Strategic international partnerships to advance our national interests while contributing to African development are important.

Fundamental is building a strong development state, which delivers on the ground, is people-centred and people-driven, and able to lead the mobilisation of all sectors of society for a better life for all.

A co-ordinated response to the outbreak of cholera

Local communities in Mpumalanga, Limpopo and Gauteng have been affected by an outbreak of cholera largely spread as a result of water-borne migration and the cross-border movement of people as well as deteriorating infrastructure. Government responded to the initial outbreak with a focused effort to contain, and deal with the disease and is up-scaling its efforts even further.

Government continues to actively engage with relevant stakeholders and partners, as part of its response plan to manage the outbreak

A national cholera co-ordinating committee has been established with participation from relevant UN agencies, international and local non-governmental organisations and relevant government departments.

A national response plan for the control of cholera includes strengthening information, education and communication programmes to communities to ensure an enhanced focus on good hygiene practices.

The private health sector, including medical volunteers is helping to treat cholera victims. The Hospital Association of South Africa’s cholera help desk is co-ordinating the sector’s response to the outbreak.

The National Institute for Communicable Diseases is reviewing guidelines to ensure better response to cholera outbreak in the future. Government has allocated budget to address the prevailing infrastructure challenges.

We have further up-scaled our efforts to contain and stop the spread of the disease

Trained cholera-outbreak response teams have been deployed to help the provincial authorities in the worst-affected districts in Limpopo and Mpumalanga.

Water-quality monitoring is being conducted consistently to ensure safe water supplies and sanitation.

Government is intensifying its public awareness campaigns to educate local communities on preventative measures as well as the symptoms and treatment of cholera.

We urge all communities to take basic precautionary measures to prevent the spread of cholera