National Treasury has tabled a basket of proposals aimed at supporting poor and vulnerable households, while staying on course to restore the health of the public purse.
This comes at the back of tax collections over the past 12 months exceeding expectations due to the strength of the mining sector revenue, and an upturn in earnings following the 2020 recession.
“The 2022 Budget extends government’s support to poor and vulnerable South Africans, while staying on course to restore the health of the public finances. This approach is supported by economic reforms to bolster investment, growth and employment,” said Treasury.
The department said the budget responds to the immediate needs of low‐income households by providing short‐term assistance.
However, Treasury cautioned that uprooting poverty and inequality requires a thorough restructuring of the economy, and creating an environment in which the private sector can invest and create jobs.
“Despite an uneven economic recovery, tax collections over the past 12 months have outperformed expectations due to the strength of mining sector revenue and an upturn in earnings following the 2020 recession.
“Some of this improved performance is projected to continue over the medium term.
“Government is using a portion of the additional revenue to accelerate debt stabilisation, with the majority targeted to address urgent social needs, promote job creation through the Presidential employment initiative, and support the public health sector.”
Spending expected to grow over the medium-term
National Treasury said over the next three years, consolidated government spending is expected to grow at an annual average of 3.2%, from R2.08 trillion in 2021/22 to R2.28 trillion in 2024/25.
“Most non‐interest spending is directed to the social wage, which includes health, education, housing, social protection, employment programmes and local amenities.
An amount of R18.4 billion is allocated in 2022/23 and 2023/24 to support youth employment and the creation of short‐term jobs under the presidential employment initiative, Treasury said.
“Government’s steadfast commitment to returning public finances to a sustainable position means that it will achieve a primary surplus – where revenue is higher than non‐interest spending – by 2023/24, one year earlier than anticipated at the time of the 2021 MTBPS.
“This will bring the period of fiscal consolidation to a close, creating space to reconsider the funding of South Africa’s priorities in a fiscally stable environment,” Treasury said. – SAnews.gov.za
