Trevor Manuel's budget speech came at a time when business is already in distress because of the global economic meltdown. This means that he had to speak about how South Africa is going to deal with the recession and at the same time create an election budget focusing on social grants, job creation and poverty alleviation.
Referring to the global recession, this is what he said: “The storm that we spoke of last year has broken, and it is more severe than anyone anticipated.” However, he confirmed that the budget remains firmly focused on a longer term transformation challenge. “While responding to the changed economic outlook, our primary goal remains the reconstruction and development of our economy, and the progressive building of a shared future in which we can take pride in the quality of our public services, the creation of jobs for our people and security in our communities,” he explained.
Manuel was expected to grant some kind of corporate tax relief so that people can keep their current jobs and massive tax cuts to stimulate consumer spending; address education, unemployment and the needs of the poor; and touch on infrastructural development.
Although Manuel didn’t grant massive tax cuts, his speech managed to address most of the issues that he was expected to speak about. Here’s how he allocated the 2009 budget:
Poverty Reduction
- R25 billion is added to the budgets of provinces, mainly for education and health care.
- R13 billion for social grants.
- R4 billion for the schools nutrition programme.
- R2,5 billion goes to municipalities for basic services.
- R700 million is allocated to higher education subsidies.
- The National Student Financial Aid Scheme receives an additional R330 million.
Manuel emphasized that the government’s contribution to public education remains South Africa’s single largest investment. “We know that it is the key to reducing poverty and accelerating long-term economic growth,” he added. “Key priorities in education include extending the no-fee schools policy to 60 per cent of schools, reducing average class sizes in schools serving lower income communities and strengthening teacher training programmes.”
Employment Growth
- R1 billion goes to the Umsobomvu Youth Fund
- R3,7 goes to the low-income housing projects and R4.1 billion for the second phase of the Expanded Public Works Programme which will create more jobs.
Housing and Infrastructure
- R787 billion has been allocated to infrastructure.
- A further R6.4 billion is added public transport, roads and rail networks.
- R4.1 billion for school building clinics and other provincial infrastructure projects.
- R5.3 billion for municipal infrastructure and bulk water systems.
- R45 billion will be spent on the Breaking New Ground housing programme.
Agriculture And Rural Development
- R1.8 billion goes to rural development and small farmer support.
- Rural infrastructure projects receive R1.2 billion.
- The budget for land reform and land restitution over the next three years totals R20.3 billion.
Manuel highlighted supporting small scale farmers and providing access to long-term finance as very important to ensure the transformation of rural livelihoods.
Health Services And Fighting Crime
- A new unit that will set and audit norms and standards for hospitals and primary care centres will be introduced.
- R1.8 billion is budgeted to introduce 3 new child vaccines to prevent infant and child deaths.
- The budget also makes provision for further improvements in the remuneration of health professionals.
- R5.4 billion is aimed at improving the criminal justice services.
- Funding is created for additional policing capacity during the 2010 FIFA World Cup.
Tiisetso Tlelima - Tiisetso Tlelima is a freelance arts journalist based in Johannesburg, South Africa. She is very passionate about South Africa’s ...
