Trevor Manuel has given what some speculate to be his last budget speech today 11 February 2009. To be honest, the budget is pretty much what was expected. There are some savings on personal tax, smokers and drinkers will pay more while there is a higher fuel levy. As for property, the Capital Gains Tax exclusion threshold was raised from R16000 to R17500.
Trevor Manuel gave the widely anticipated budget speech to parliament earlier today.
The 2009 South African budget, Trevor Manuel’s thirteenth, might very well be the last budget with him at the reigns.
In October of last year Manuel said that he has been in his current position too long, and discussed his future with ANC leaders. Colen Garrow, an economist at Brait SA in Johannesburg, says that the national budget for 2009/10 could very well be Manuel’s toughest.
Even though Trevor focused a lot on tightening the belts there’s still 2bn allocated to FIFA world cup stadiums and related infrastructure.
Thanks to Fin24, here’s a snapshot of what the South African Budget has in store for us:
PERSONAL TAX
The 2009 budget provides tax relief of R13bn to individuals to counter the effects of inflation (bracket creep).
This means people under 65 years of age will be affected as follows:
- Those earning a total amount of R60 000 will be taxed to an average rate of 1.7% – saving R1 476.
- Those earning R200 000 will be taxed at an average rate of 15.5% – saving R2 426.
- Those earning R750 000 will be taxed at an average rate of 31% – saving R5 526.
The tax threshold for individuals younger than 65 will be R54 200, while it stands at R84 200 for those older than 65.
CORPORATE TAX
There’s no such luck for companies, though, as no changes were proposed for corporate tax rates.
But there was a break for entrepreneurs as the value-added tax (VAT) registration threshold was raised from R300 000 to R1m.
TAX ON INTEREST AND DIVIDEND INCOME
The annual exemption on interest earned for people younger than 65 years has been raised from R19 000 to R21 000. For individuals over 65 the threshold increases from R27 500 to R30 000. For interest and dividends from foreign investments, the exemption level has been raised from R3 200 to R3 500.
CAPITAL GAINS TAX
The annual exclusion threshold for capital gains tax (CGT) increases from R16 000 to R17 500.
SIN TAXES
Drinkers will pay more for their favourite tipple with excise duties increasing across the board. Beer is up 7c to 79c per 340ml can, wine by 14c to R1.98c/litre, fortified wine by 32c to R3.72/litre and spirits by R3.21 to R25.05 per 750ml.
Smokers also have to cough up more with excise duties on a pack of 20 rising 88c to R7.70c.
FUEL LEVY
There was a double whammy in the budget for motorists, who have only recently started to feel the benefits of the markedly lower crude oil price.
The fuel levy on petrol will increase by 23c to R1.50/l and by 24c to R1.35/l for diesel ion April 1 this year. But on the same date the Road Accident Fund levy on petrol and diesel increases by 17.5c to 64c/l.
GREEN AND MEAN
The budget proposes reducing the current ad valorem excise duty on the sale of new motor vehicles, opting to introduce an additional excise duty component to take into account carbon dioxide emissions.
Other environment taxes will see an increase in the plastic bag levy to four cents a bag and an introduction of a charge of about R3 on energy-intensive light bulbs.
The international air passenger departure tax will increase to R150 and R80 in the case of flights to Botswana, Lesotho, Namibia and Swaziland.
SPENDING
The main areas in the budget that receive more money are:
- R12bn more for social grants;
- R45bn more for provinces to improve education, health, roads and rural development;
- R10.9bn more for housing, water, sanitation and municipal services;
- R5.4bn more for improving the criminal justice sector (including an overhaul of the fingerprint and DNA databases);
- R6.4bn more for public transport, national roads and rail infrastructure.
THE ECONOMY
- A budget deficit of 3.8% in 2009/10, before recovering to 1.9% by 2011/12;
- GDP growth projected at 1.2% in 2009 (before recovering to 4% by 2011);
- Inflation to fall to 5.8% in 2009;
- Over R780bn of public infrastructure spending planned for next five years; and
- Real growth in consolidated government spending (excluding interest) of 5.1%.
I am quite happy with Trevor’s budget this year…. really I have no complaints…. Thanks
I think Trevor Manuel has done a stellar job with his budget speech as he always does. I am a bit skeptic as to what we can expect from global markets and how that will affect the South African economy and ultimately the budget. We seem to lag a couple of months compared to first world economies and that could mean hard times for the rest of this year…
All in all, I think Trevor Manuel has been fantastic but why are we bailing out Eskom and SAA? Their executive earn huge packages but don’t appear to be earning them. I would be sorry to see Trevor Manuel go, he’s in the same category as Mandela, there will never be another like him. Once he goes, I won’t be getting excited about the budget!
I agree with Maggie, Trevor has seriously steered the country down the straight and narrow as far as his power allowed him which could not be said from all ministers who have embarrassed us from time to time in medical and general criminal areas. Every year everyone has had only praise for his budget and I think thanks to him largely we’re not in the same predicament as the rest of the world!
i am very hapy about the budget speech of yesterday,i think it will BOOST our economy,while NCA have made darkness in darker.
i think , despite the difficulties and challenges that our economy is currently facing , Trevor Manuel managed to make the best Budget ever, im happy about , Big up Trevor !!!!!!!!!!!!!!!!!!!!!!!!!!!!
WE SUGGEST TREVOR MANUEL SHOULD HAVE DECREASE THE PRICE OF PETROL & PARAFFIN AND GIVE THE DEPARTMENT OF HEALTH ENOUGH MONEY TO SPEND IN ORDER TO HIRE THE SPECIALIST DOCTORS FROM OTHER COUNTRIES .Even though Trevor focused a lot on tightening the belts there’s still 2bn allocated to FIFA world cup stadiums and related infrastructure.
I think Trevor has done a great job.
Well done Mr Manuel, as more has been given to education department I think also more pleasing results should be seen or be the outcome of it. Also social services since our country is seemingly in special need of mental assistance, especially our youth.
i think that trevor has done a really good job this year considering all the influences in the economy. an excellent execution well done….
The budget is very impressive but on I am not too sure on the petrol prices becouse just now in december I was paying more than R 10 for 1 ltr it would have been very fair for atleast things to remain as they are currently petrolwise. I also urge eastern cape leaders to use the funds allocated wisely on the rural areas like Cifimvaba etc.
Thank u! Trevor. With all this world economic depression, u still managed to deliver on the mandate of the poor. Hoping that the Ministers, Premiers & MEC’s will make good use of the allocated funds, so that we ordinary citizens can see an improvement in our dailly lives. Phambile Morwa Manuel !!!
Trevor has made a very interesting budget speech and i think it is the best of them all. WELL DONE TREVOR
Given the circumstances as always Trevor out did himself.Great job and good luck to the person who will have to fill those great boots he will leave behind 1 day.
WELL DONE TREVOR YOU REALY DID A GOOD JOB.BUT PETROL HUGH.
Thanks again Mr Manuel, you will always be remembered as the best finance minister south africa has ever had, may god bless you!
You did a great job Travor,wher would we’ve been without you.we will pray for you to keep on doin good work.we are praud of man like you.
Bravo Mr Manuel!!! Keep it up, especially by increasing the elders’ grants. But with the young people’s grants, imali yeqolo. I eh……….!
Thanks for the work you did for your country. To increase the grant of the young ones I do not see any need , as they want responsibility and accountability for growing the young ones,This kind of behaviour is encouraging the spreed of HIV/AIDS to the young women,
Mr. Trevor Manuel is definitely the the best finance Minister South Africa has ever had, why does he have to leave?Who will be able to replace him? My only comment is that the petrol price is high enough already,why not tax luxury items or increase sin taxes to balance the budget? Mr.Manuel don’t leave us now you have always done a good job.
God Bless.
i think trevor did a great job but the thing is he gave the manicipality 2.5 billion while some manicipality rae trying to help students who want to go universities but the thing is they are not paying their fees,
i think trevor tried his best to cover all the challenges faced by the state. well done big guy
I think Trevor Manuel is the one who can lead the country,so let ANC point him
what makes Trevor to leave the sit is it politics. if so let the politicians to sort things out otherwise aah!!!. trevor do the great job no matter what.
OOOPS’ Mr Trevor Manuel you did a graet job and hope your sucssesor learnt how budget is done, and also how to make people have interest in lessoning to your speech, and of coarse it takes a person with more skills and dedication. S.A will miss you a lot but what is good you are still arround to help when things went wrong, may God bless you and your loved ones.
it is not fair for education deartment because they didnt get enough money for 2009 in order to help student with bursaries. most student are still suffering towards their education.so please minister try something out for south african student
Trevor, u are the leader of the country and u did extremely well in all the fields except childgrant. young girls are giving birth like they are competing and even more than their parents, because of the money u are awarding them with. it is a shame is SA that if u give birth u get a reward regardless of yourth. that money was supposed to be given to the who attain the age of 25 without a baby. i pray that our government send all u back to school and cease to encourage them to give unnecessary birth of illegitimate children
Litaba tsena li monate if and only if litla phethahala, mosotho o e a re eba ha ho le tjena, thota joale e namme, banna ba ts’oere thebe ka mallela,ha ho ngoana e motle. ache ‘na che ha kena litaba ha ka lo kalo.
hae phaphathoe
I think Mr Manuel has done a great job with the budget, his probably the best finacial minister in SA. As the youth of this nation we strive to be like u man.THANX
It is very unessary to give money to kids who get kids.It is a disgrace.There is even a lot of mothers who sit at home and don’t make an effort to look for a job,because uncle Trevor is giving us mahala money,Most of them don’t even use that money for the kids that is their alcohol money.If the goverment can create more jobs,(not just for internal staff’s families)than this support must be stop.If you want a child you must support that child,not the tax payer.That’s why more children get children,becaue everything is for free in S.A Come on guys cut it out!
To Karlina Beukes: Amen to that! Couldn’t have said it better!