From a surplus to a deficit

He presented the budget yesterday in Parliament and a bulk of it will go towards the wage bill and key sectors such as education and health.

The budget is about E1.1 billion higher than the previous year. Revenue, including grants are estimated to be at E12.83 billion while total expenditure is estimated to be at E12.63 billion.

Even though this may seem as a surplus of about E200 million, there are other obligations that were approved by Parliament before the presentation of the appropriations yesterday.

These obligations make up for the difference, hence the estimated deficit. The primary obligations include royal emoluments and debt obligations, according to Director of Budget Bheki Bhembe.

The deficit is estimated to be at E397 million.

Sithole said the budget presented in Parliament represents an expansionary budget policy needed to jump start the economy after three years of sluggish growth.

He explained that total expenditure will rise to nearly E13.1 billion, of which E200 million was one-off spending for the elections. "The budget balance will be a deficit of 1.1 per cent of Gross Domestic Product (GDP), with a primary deficit excluding interest payments of 0.1 per cent of GDP," he said.

Again, a bulk of it, about E7.1 billion will come from the Sou-thern Africa Customs Union (SACU) receipts.

Sithole said government would focus the final budget of this Parliament on a ‘big push’ for growth and the theme of this budget was ‘Jump-starting economic growth: bringing prosperity to the people’.

He expressed belief that this was a budget to implement aggressive measures to boost the economy and create jobs. "It is also a fair budget, supporting those who need it most and ensuring delivering better value for money from people’s taxes," he added.

The minister said this budget was an opportunity to reflect on the policies that government had introduced and ‘we will give one last push to complete what we have started.’

He explained that government would reward those who work and invest in their people through better health services and education.

"Our first target will be to create jobs. Higher revenues will make the space for the expenditure needed to inject cash into the economy after the fiscal crisis. The focus will be on higher capital spending, boosting disposable income, improving access to markets, streng-thening the financial sector, attracting investors, supporting industrial development and strengthening sector support for agriculture, mining and tourism," he explained.

The minister added, "Our second target will be to improve the value for money of public spending, by giving a legal framework for public finance management reforms, improving procurement, strengthening the Internal Audit Department and the Auditor General’s Office, and fighting corruption. Our third target will be to strengthen social sector spending through free primary education, hospitals, clinics, and social safety nets."

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