Mboweni spoke about several “jump starts” our stalling economy would get over the next 18 months:
- The fruits of the reform agenda led by President Cyril Ramaphosa
- Lower inflation
- The interest rate reduction from earlier this year
- The recent gains in platinum group metals prices
- The impending change to the electricity regulatory framework
- The tax proposals set out in the 2020 Budget Speech
Despite the jump starts, he says growth will average just over 1% in the next three years due to the persistent electricity supply shortage.
- Projected revenue: R1.58 trillion
- Projected expenditure: R1.95 trillion
- Budget deficit: R370.5 billion
- Gross national debt: R3.56 trillion (65.6% of GDP)
No major new taxes
Despite expectations of an increase in VAT, it never came.
Mboweni even announced modest personal income tax relief.
“Someone earning R10 000 a month will pay 10 per cent less in tax. Someone earning R100 000 a month will pay about 1.5 per cent less.” Tito Mboweni, Minister of Finance
Mboweni proposed a broader corporate income tax base with additional revenue used to reduce the corporate tax rate.
He raised the threshold for property transfer duties to R1 million.
- 340ml can of beer or cider to cost an extra 8c
- 750ml bottle of wine will cost an extra 14c
- 750ml bottle of sparkling wine an extra 61c
- Bottle of 750 ml spirits, including whisky, gin or vodka, will rise by R2.89
- Packet of 20 cigarettes will be an extra 74c
- 25 gram of piped tobacco will cost 40c more
- 23 gram cigar will cost an extra R6.73
The fuel levy goes up by 25 cents per litre.
Minister Mboweni announced a downward adjustment to non-interest expenditure of R156.1 billion over the next three years relative to the 2019 Budget projections.
The Minister aims to save R37.8 billion in the next financial year on the Government’s wage bill.
- R80 increase for the old age, disability and care dependency grants
- R80 increase in the war veterans grant
- R40 increase for the foster care grant
- R20 increase in the child support grant
Electricity – “our number one task”
Government has allocated R16.4 billion to settle the airline’s guaranteed debt and interest.
The National Prosecuting Authority, the Special Investigating Unit and Directorate for Priority Crime Investigation get an extra R2.4 billion.
State Bank and Sovereign Wealth Fund
The Minister gave few details but announced that the “preferred options for the establishment of a bank” are ready.
The state bank will function as a retail bank and will operate on commercial principles.
Mboweni announced the formation of the “South African Sovereign Wealth Fund”.
Winning is not easy. Less than two years before winning the World Cup, the Springboks lost 57-nil to the All Blacks. Miss Universe did not win her first attempt at Miss South Africa. Winning takes patience, prudence and perseverance. As Saint Paul tells us we must run in such a way that we may win.
Tito Mboweni, Minister of Finance