Finance Minister Enoch Godongwana tabled a budget mainly aimed at ending load-shedding and protecting the poor from harsh economic conditions.

Godongwana reminded South Africans that the global economic climate remains a major risk to the country’s economic growth prospects. He announced that the national government would take over part of Eskom’s close to R400b debt.

“We are proposing a total debt-relief arrangement for Eskom of R254b. We are doing this for two reasons.

“Firstly, doing so will ease pressure on the company’s balance sheet, enabling it to invest in transmission and distribution infrastructure.  It will also allow Eskom to conduct the maintenance required to improve the availability of electricity.

“Secondly, R337b of Eskom’s debt is already government guaranteed.  Explicitly taking on this debt, will reduce fiscal risk and enhance long term fiscal sustainability,” he said.

Social grants

Godongwana, who tabled his budget amid public outrage of power outages coupled by a sharp increase in basic goods, also announced an increase in social grants, with old age grants increasing by R90 while the social child grant will increase by R30.

People earning less than R95 750 per annum, Godongwana said, would be exempted from paying personal income tax.

Further, Godongwana announced that pensioners who chose to withdraw less than R550 000 of their retirement fund benefits would not be taxed.

Government’s tax revenue

While the government was working on reducing its debt, Godongwana said government’s tax revenue was projected to increase to R1.69 trillion in the current financial year.

On job creation, Godongwana said the government would be spending R903b on infrastructure projects ranging from roads to water.

The largest portion of this, around R448b, will be spent by state-owned companies, public entities and through public-private partnerships.

As in previous budgets, taxes on alcohol and cigarettes went up. A can of beer will increase by 10c while a pack of 20 cigarettes will cost 92c more.