He stressed the need to reaffirm government’s commitment to close the gap between spending and revenue, implementing a plan for stronger economic growth and cooperation between government and the business sector. That should keep the rating agencies that want to downgrade SA’s debt position to junk status temporarily at bay.

Personal income tax rates were not increased as was expected and as Nhlanhla Nene did last year, although about R18bn more will be collected in 2016/17. This will mostly be through yet another big increase of 30 cents per litre in the fuel levy as well as increases in capital gains tax, property transfer tax and an increase of about 7% in the usual sin taxes (alcohol and tobacco) A new tyre levy and a tax on sugar intake (only next year on sweetened beverages) will also be introduced.

The public sector wage bill will be cut, but provision for contingencies like drought relief and additional spending has been made and increases in expenditure on for example on higher education and small business development continue.

Some of the budget highlights are:

Budget framework

• the budget deficit will fall from 3.2% in 2016/17 to 2.4% in 2018/19 (3.9% in 2015/16).
  •  debt stock as a percentage of GDP is expected to stabilise at 46.2% in 2017/18 (43.7% in 2017/18).
  •  government will lower the expenditure ceiling by R10bn in 2017/18 and R15bn in 2018/19 by reducing public sector compensation budgets.
• an additional R18.1bn of tax revenue will be raised in 2016/17, with R15bn more in each of the subsequent two years.
• government has responded to new spending needs without compromising expenditure limits. An amount of R31.8bn has been reprioritised over the medium-term expenditure framework period to support higher education, the New Development Bank and other priorities.

Spending programmes over the next three years

• R457.5bn on social grants.
  • R93.1bn on transfers to universities, while the National Student Financial Aid Scheme receives R41.2bn.
  • R707.4bn on basic education, including R45.9bn for subsidies to schools, R38.3bn for infrastructure, and R14.9bn for learner and teacher support materials.
  • R108.3bn for public housing.
  • R102bn on water resources and bulk infrastructure.

Spending programmes over the next three years

• R457.5bn on social grants.
  • R93.1bn on transfers to universities, while the National Student Financial Aid Scheme receives R41.2bn.
  • R707.4bn on basic education, including R45.9bn for subsidies to schools, R38.3bn for infrastructure, and R14.9bn for learner and teacher support materials.
  • R108.3bn for public housing.
  • R102bn on water resources and bulk infrastructure.

Tax proposals

• An amount of R9.5bn will be raised through increases in excise duties, the general fuel levy and environmental taxes.

Sin taxes hikes

Beer 11c/340ml; fortified wine 27c/750ml; ciders and alcoholic fruit beverages 11c/340ml; unfortified wine 18c/750ml; sparkling wine 59c/750ml; spirits 394c/750ml; cigarettes 82c/packet of 20; cigarette tobacco 94c/50g; pipe tobacco 27c/25g; cigars 432c/23g.

Social Grant increases

• State old age grant from R1 415 to R1 505 per month.
  • State old age grant for over 75s from R1 435 to R1 525.
  • War veterans grant from R1 435 to R 1 525.
  • Disability grant from R1 415 to R 1 505.
  • Foster care grant from R860 to R890.
  • Care dependency grant from R1 415 to R1 505.
  • Child support grant from R330 to R350.