The last budget speech of the sixth administration was tabled by Finance Minister Enoch Godongwana earlier today. Several topics were discussed at length as the minister put his plans on the table for how best to navigate the country’s dire economic situation.

Despite the current financial challenges, the minister concluded that: “…We have come a long way in the last 30 years. The 30 years ahead of us, and whatever challenges and opportunities they may bring, are something we should look forward to.”

Caxton Local Media has summarised the speech into six articles that are as certain to affect you ‘as death and taxes’ (Benjamin Franklin).

NHI receives R1b allocation

The health sector is expected to receive an allocation of R848b over the Medium Term Expenditure Framework, with at least R1b directed to the National Health Insurance (NHI).

“These allocations include R11.6b to address the 2023 wage agreement, R27.3b for infrastructure, and R1.4b for the NHI grant over the same period.

“The allocation for the NHI is a demonstration of the government’s commitment to this policy. There remain a range of system-strengthening activities that are key enablers of an improved public healthcare system, that must be undertaken,” Godongwana said.

Tax revenue collection declines

South Africa’s weak economic performance has resulted in a sharp deterioration in tax revenue collection for 2023/24.

Government has proposed tax measures to alleviate immediate fiscal pressure and support faster debt stabilisation, including an increase in so-called sin taxes. Prepare to pay more for your alcohol, cigarettes and cigarette tobacco.

Social grants increase

Social grants are expected to increase in line with inflation, excluding the Social Relief of Distress Grant, known as the R350 grant.

The increases are as follows:

• R100: Old age, war veterans, disability and care dependency grants
• R50: Foster care grant
• R20: Child support grant.

Government raises US$3.3b to support climate change initiatives

Godongwana said the National Treasury plays a crucial role in mobilising resources, designing incentives, and influencing policy to mainstream climate change. He added that government has raised US$3.3b from multilateral development banks and international finance institutions to support climate change, energy, and just transition objectives.

Economic growth to stay low over the next three years

South Africa’s economy is expected to grow at some 1.6% over the next three years, with the real GDP reaching 0.6% in 2023. This was revised down from the 0.8% estimated during the 2023 Medium Term Budget Policy Statement.

Government announces implementation of new retirement reforms

Godongwana announced that new retirement reforms that will allow access to a portion of one’s retirement savings before retirement will be effective from September 1.

Read the full speech here.