The 2012 budget speech was presented to South Africans on Wednesday with good and bad news for all. Leigh Hermon looks at what Grahamstonians can expect.
The 2012 budget speech was presented to South Africans on Wednesday with good and bad news for all. Leigh Hermon looks at what Grahamstonians can expect.
Smokers and drinkers saw the price of cigarettes go up 58c per pack of 20, while booze went up 20%. But for others, Pravin Gordhan provided a great deal of economic relief through taxes and grants.
Reg Rumney, director of the Rhodes Centre for Economics Journalism in Africa, held high praise for Finance Minister Pravin Gordhan and the National Treasury. “I would say that I am really impressed by the budget and I applaud the management of our finances,” Rumney said.
But what does this mean for South Africans? More important, what does this mean for Grahamstown?
“There are lots of things that will help out people in Grahamstown, such as small business tax relief,” said Rumney. Grahamstown is home to a number of small businesses and Gordhan has made provisions for the tax-free threshold to be increased to R63 556.
VAT has also remained the same, which Rumney believes is good news for the poor. Rumney pointed out the importance of the financial relief for the poor, with grants being brought in line with current inflation trends. Social welfare and assistance have been allocated R104.9 billion.
The state old age, war veterans’, disability and care dependency grants have all increased by R60 to R1 200. The foster care grant has increased to R770 and the child support grant was increased to R280. With 16 million South Africans receiving grants every month, these new numbers will come as a relief to many residents in Grahamstown.
A major theme of the budget speech was the greater investment in infrastructure – which should bring some relief to residents tired of living with Grahamstown’s crumbling roads and outdated plumbing. According to Gordhan, 43 major projects have been identified requiring long-term investment to stimulate economic development.
Another R845 billion has been allocated to infrastructure, with provinces expected to spend R25.5 billion on provincial and rural roads; while water and sanitation have been accorded R75 billion. The budget has recognised the lack of investment when it comes to infrastructure and President Jacob Zuma’s 20-year plan aims to put this to rights.
As regards infrastructure, however, Rumney believes residents won’t be aware of the impact of the budget for a while yet. “The thing about the budget is it takes a while to digest. Only by next week will we know.” With the current economic uncertainty in developed nations, Rumney believes a conservative budget is a good budget.
“The minister has to be responsible in case of a global economic meltdown,” Rumney said. South Africa needed to protect itself against a possible crisis and one way of doing this was through Gordhan’s latest budget.
