BUDGET 2006
Poor benefit from SA's prosperity
17 February 2006
In what has widely been described as a "pro-poor" 2006 Budget, Finance Minister Trevor Manuel has made generous use of South Africa's new-found prosperity to bolster social spending.
Education, health, skills development, the various social welfare grants, the police, justice department and prisons were all given above-inflation increases in their allocations from the Treasury.
"The budgetary choices we make give life and meaning to the Age of Hope of which President Mbeki so rightly spoke in the State of the Nation Address," Manuel told Parliament on Wednesday.
"The budget tabled here today gives practical effect to our programme of social cohesion, and in particular to prioritising the needs of the poor, for that is what it means for rich and poor to share the privilege of a common nationhood."
Education and training
The Department of Education remains the largest beneficiary of government
spending, receiving for R92,1-billion of this year's Budget - a 9.7% increase on last year and one-fifth of the total amount.
This makes South Africa's education expenditure proportionally high in world terms.
Manuel allocated an extra R2-billion to South Africa's 22 higher education institutions, to a total of R11.8-billion for 2006-07.
The National Students Financial Aid Scheme was given R3.2-billion to be disbursed over the next three years, with 7% going to teacher training. The government will also waive fees at the poorest 20% of schools.
The Department of Labour is to get R4.4-billion for Sector Education and Training Authorities, which manage learnerships for employees in the different sectors. The 1% payroll tax - part of which can be reclaimed by businesses that fund on-the-job training - increased this revenue to R3.1-billion in 2004-05.
The Budget also extends the tax allowance for employers who offer learnerships by another five years.
Employers who offer bursaries and scholarships will have a simplified set of tax rules for bursaries and scholarships from 1 March 2007, and the tax deduction for investment in certain forms of research and development has been increased from 100% to 150%.
The Department of Science and Technology is to get an extra R1.2-billion over the next three years to support research infrastructure and train and retain scientists, giving it a total allocation of R2.6-billion in 2006-07, rising to R3.25-billion in 2008-09.
Social welfare
Social assistance programmes and welfare grants make up the second-largest category of welfare spending, after education.
The 2006 Budget allocates R54-billion to these programmes in 2005-06, rising to R63.9-billion in 2008-09, with an additional R2.66-billion for social grants and the new South African Social Security Agency. Other priorities include addressing the effect of HIV/Aids and caring for child-headed
households.
Grants for child support, disability and foster care have been the fastest-growing category of government expenditure since 2001, now making up 3.4% of GDP.
"Social grants contribute more than half the income of the poorest 20% of households," Manuel said in his Budget speech.
Child support grants have been extended to the age of 14, with more than 7-million children receiving the grants by the end of 2005. The Budget increases the monthly child support grant by R10 to R190, foster care grants by R30 to R590, and old age pension and disability grants by R40 to R820 - all above 4% inflation.
An extra R60-million has been allocated to the South African Social Security Agency, which will take over grant administration from the provinces in March, to combat grant fraud. More than 11-million South Africans will receive social grants this year.
Health
Spending on health will rise 9.4% over the next three years from
R48.8-billion in 2005-06 to R63.9-billion in 2008-09 - an increase in real terms of 4% to 5%.
Funding for the Hospital Revitalisation Programme will almost double over the next three years, from R1.26-billion in 2006-07 to R1.98-billion in 2008-09. The programme aims to upgrade or replace public hospitals, modernise equipment, and improve quality and management services. Forty-six hospitals will be overhauled.
A new regime for tax on medical scheme contributions will be introduced on 1 March, making these fairer and shifting benefits towards the poor.
Provincial spending on HIV/Aids programmes over the next three years is set to grow from R1.6-billion in 2005-06 to R2.8-billion in 2008-09. SA has the world's biggest Aids treatment programme, reaching some 112 000 patients in public hospitals and clinics.
The Health Department's HIV/Aids budget will rise from R1.57-billion in 2005-06 to R2.19-billion in 2008-09. Some R458-million has been set aside for
Aids-awareness and prevention programmes.
Safety and security
The criminal justice cluster will receive about R42-billion in 2006, with R29-billion going to the SA Police Service (SAPS), R8.8-billion to prisons and R4.2-billion to the Department of Justice. An extra R5.4-billion has been allocated to miscellaneous projects over the next three years.
The government aims to reduce contact crime by 7% to 10% a year by concentrating law enforcement operations in priority areas, reducing the number of illegal firearms, combating substance abuse and implementing crime-prevention measures.
The SAPS will employ an additional 29 940 officers by 2008-09, bringing the total number of police officers in the country to 178 910. The Budget also allocates funds for the construction and operation of four new prisons - at Rietvlei, Port Elizabeth, East London and Paarl - over the next three years.
Almost R300m is to be spent on a new reserve
police force for rural areas, to replace the military commando system.
SouthAfrica.info reporter
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