2010 Budget Speech

Summary of the 2010 Budget Speech

Here’s a quick summary of the most important points from the 2010 Budget Speech:

BUDGET: R6.5bn in personal tax cuts
Finance Minister Pravin Gordhan has unveiled personal tax cuts totaling 6.5

billion rand across all income brackets in the Budget for the 2010-11

financial year. This compares with cuts of 13.6 billion rand in 2009-10

and 7.7 billion rand in 2008-09.

Cost of booze and cigarettes go up
Smokers and drinkers, you guessed it, your little indulgences just became

more expensive again, just like they do every year!

Gordhan gives R3bn more to fight HIV/Aids
The Finance Minister Pravin Gordhan announced in Parliament on Wednesday

that a further 3 billion rand is to be allocated to the fight against HIV/Aids

in his budget spending plans.

BUDGET – Grants increase by R70
Finance Minister Pravin Gordhan has announced increases to social grants,

which will now cost the taxpayer 89 billion rand.

Sophisticated corporate tax loopholes targeted
In a section entitled “closure of sophisticated tax loopholes”, the 2010-11

budget specifically takes aim at corporate tax avoidance measures which

the Treasury says “often presents a substantial loss to the fiscus”.

BUDGET: Fuel levy +10c/l, pipeline +7.5c, RAF +8c
The general fuel levy has been raised by 17.5 cents a litre with effect

from April 7, with 7.5 cents of the levy going towards funding a new

multi-product petroleum pipeline between Durban and Gauteng.

GREEN TAX: CO2 vehicle emissions tax announced
Effective September 1, 2010, a flat rate CO2 vehicle emissions tax will

come into effect.

Prisoners earn more money for government
Prisoners are expected to earn the Department of Correctional Services

R136.7 million in 2009/10.

Unemployment – Gordhan paints bleak picture on jobs
Finance Minister Pravin Gordhan on Wednesday painted a bleak picture

of South Africa’s job crisis, saying the tentative upturn in the economy

would generate only about a million jobs by 2014.

Police to get R60bn by 2012-2013
Police spending on fighting crime is expected to rise to R60.4 billion over

the next three years, with upgrades to the detective service and the

hiring of thousands of additional officers.

2010 Budget – Baragwanath Hospital to benefit
The government is to expand its use of public-private partnerships in the

health sector, particularly to improve the hospital system, Finance Minister

Pravin Gordhan says.

UIF is only helping a few
Though the monthly number of Unemployment Insurance Fund beneficiaries

had increased dramatically last year, the fund’s payments reached only about

5% of the 4.2 million unemployed.

South Africa to launch $2bln/yr eurobond over 2 years
South Africa will tap international markets for $7 billion over the next three

years to fund its spending but will gradually reduce government borrowings

to make way for its state-owned enterprises, the National Treasury said

on Wednesday.

Inflation targeting to stay at 3-6 percent
South Africa’s central bank will continue to target inflation at between

3 and 6% although debate on monetary policy is constructive over the

longer-term, Finance Minister Pravin Gordhan said on Wednesday.

SA to implement financial services reforms
South Africa will implement financial regulatory reforms in line with G-20

recommendations, including better management of foreign risk exposure

of banks and institutional investors, the National Treasury said.

Government Tenders – Move against corruption
Finance Minister Pravin Gordhan on Wednesday promised reform in

government’s procurement systems to ensure greater transparency and

accountability to combat corruption.

SA economy to resume growth in 2010
South Africa’s economy is expected to grow by 2,3% in 2010 after contracting

1,8% last year, but unemployment remains a critical challenge after recession

slashed about 900000 jobs, the National Treasury said on Wednesday.

SA budget deficit at 7,3 pct of GDP in 2009/10
South Africa plans to maintain its spending commitments over the medium

term to support the economy but will gradually cut its budget deficit as an

recovery gathers pace, the National Treasury says.

Transport spending increases
Spending on transport projects will increase to nearly R30 billion over the next

three years, as government continues to build up road and rail infrastructure.

Education gets biggest Budget spend
Education spending — the largest single item on the budget — is to be reprioritised

to address the challenges of basic education and skills training.

Crime – Making South Africa safer costs R85.6bn
Declaring that reducing crime is one of government’s top priorities, the National

Treasury team has announced consolidated government expenditure in the Budget

introduced on Wednesday is 78.4 billion rand in 2009/10, but rises to 85.6 billion

rand in 2010/11.

Youth job subsidy to come in early next year
Echoing the trade union federation Cosatu’s call for “a new growth path to

transform our economy”, Finance Minister Pravin Gordhan outlined at least one

aspect of the new path that would not meet with Cosatu’s approval.

Infrastructure spending cut blamed on municipalities, recession
medium term budget policy statement in October and the president’s speech

last week from 872 billion rand to 846 billion rand was given by Treasury officials

as Finance Minister Pravin Gordhan delivered his budget in Parliament on

Wednesday.

Finance Minister gets tough with parasitically
State-owned enterprises will have to cut waste and withstand greater scrutiny from

government in coming years, Finance Minister Pravin Gordhan’s maiden

budget suggests.

Mining royalties from March 1
South Africa will from March 1 this year levy mining royalties that were postponed

due a recession last year, the National Treasury said in the 2010 Budget Review.

Government has less money this year
Described as “one of the most challenging periods for revenue collection since

1994″, 2009/10 is likely to rake in 68.9 billion rand less in tax revenue than the

government initially expected, but 1.4 billion rand more than was projected in

last October’s Medium Term Budget Policy Statement.

Taxman could target gambling winnings
“In addition, winnings in the hands of gamblers are exempt from personal

income tax, a practice that will also be reviewed,” it said.