CRS News Flash 31 October 2019 – SOUTH AFRICA – Medium Term Budget Statement

OCTOBER 2019 – SOUTH AFRICA
MEDIUM TERM BUDGET STATEMENT

It is important that employers note the following:

South Africa Medium-Term Budget Policy Statement 2019

The Minister of Finance, Minister Tito Mboweni, delivered the Medium-Term Budget Policy Statement on Wednesday, 30 October 2019.

Fiscal goals and projections for the economy, as well as the risks facing the country were addressed.

Highlights summarised

  • Economic growth is forecast at 0.5% in 2019 compared to the 1.5% expected in February. Growth is projected to slowly rise to 1.7% in 2022.
  • E-tolls are here to stay, and the government plans to enforce compliance
  • Total revenue shortfall for 2019-2020 will amount to R52.5 billion compared with the 2019 Budget estimates. This could result in job losses, lower wage settlements, smaller bonuses and a decline in income tax collection.
  • Tax collection is expected to total R1.37 trillion this year, which is R53 billion (or 4%) less than expected.
  • National debt exceeded R3 trillion. It is expected to rise to R4.5 trillion over the next three years. Without any policy adjustments, debt will most likely exceed 71% of GDP by 2022/2023.
  • The National Treasury, in partnership with the Department of Public Enterprises, is instituting a series of measures to instil discipline in Eskomโ€™s finances. Debt relief will only be considered once operational efficiencies have been achieved.
  • The consolidated budget deficit averages 6.2% of GDP over the next three years.
  • Regarding economic growth, the current account deficit is expected to remain at 3.5% of GDP over the next three years, reflecting low import growth due to weaker domestic demand.
  • Almost half of all projected spending is allocated to social grants, education and healthcare, which will receive R3 trillion alone over the next three years.
  • The rollout of the National Health Insurance (NHI) Bill will require an additional R33 billion annually from the 2025/26 financial year. Treasury and the health department are still in discussions around NHI.
  • Luxury expenses are being withdrawn from politicians. This includes salary freezes, cuts in taxpayer-funded cars, clamp downs on expensive phones, no more business class flights and restrictions on travel and subsistence expense claims.
  • R2.3 billion will be allocated to fighting crime and tax avoidance.
  • The South African Reserve Bank will not be nationalised as it kept inflation stable during a difficult period. The bank also declared a substantially increased profit share to the government.
  • The official unemployment rate has increased to 29%, up from 27% a year ago.
  • The mid-term Policy Statement does not include detailed spending plans or tax proposals. This will be announced during the annual Budget Speech in February 2020.

To view the Medium-Term Budget Policy Statement (MTBPS), follow the link

Contact our legislation team atย info@crs.co.zaย if you require any additional information.
ยฉ 2019 C
RS Technologies (Pty)Ltd. All Rights Reserved.

Share the Post:
Scroll to Top

Book your CRS solutions demo or consultation


By submitting this form, you agree to our terms and conditions

Software products

Simplify payroll and HR management with our comprehensive solution suite.

HR software

Reshape the employer-employee dynamic.

Payroll software

Enhance accuracy and efficiency.

Performance management software

Nurture employee development.

Integration & Security

Connect with leading ERP platforms.

Global footprint

Weโ€™re active in 35 countries.

Our services

Grow your business while we take care of your human capital.

HR outsourcing

Transform HR into a strategic asset.

Payroll outsourcing

Simplify your payroll operations.

EOR & PEO

Expand your global reach.

Support channels

We keep your payroll and HR infrastructure running smoothly.

Service Desk & FAQ

Round-the-clock expert support paired with essential payroll and HR information.

HIPE4 Agreement

Global payroll and HR excellence defined.

Download Resources

Leverage expert insights that steer your strategic decision-making.

Downloads

Essential resources to improve your business practices.

News & Insights

Comprehensive coverage of key payroll and HR issues.

Company overview

CRS has been pioneering payroll and HR solutions for global organisations for over 40 years.

About us

Our custom payroll and HR solutions benefit employers and employees in more than 35 countries.

Work with us

Experience an environment where creativity, collaboration and empowerment thrive.