JOHANNESBURG- Minister of finance Malusi Gigaba announced on Wednesday that government’s consolidated spending will increase from R1.67 trillion in 2018/19 to R1.94 trillion, representing a nominal annual average growth of 7.6 percent, or 2.1 percent in real terms.
What this means is that government will be spending R792 billion on basic education, R668 billion on health and R528 billion on social grants, over the medium term.
He explained that in this coming fiscal year, the government has allocated over R200 billion for peace and security and another R200 billion for economic development to build a safer country and to grow the economy inclusively.
“The largest reallocation of resources towards government’s priorities was on higher education and training, amounting to additional funding of R57 billion over the medium term. As a result, this is the fastest-growing spending category, with an annual average growth of 13.7%. Accordingly, this government is proud to implement a major step forward towards our ultimate goal of guaranteeing access to higher education and training for all South Africans who qualify based on merit, not class position,” he said.
He added that government will phase in fee-free higher education and training to students from poor and working-class families.
“This means that all new first-year students with a family income below R350 000 per annum at universities and TVET colleges in the 2018 academic year will be funded for the full cost of the study. This will be rolled out in subsequent years until all years of study are covered. Returning NSFAS students at the university will have their loans for 2018 onwards converted to a bursary. This is an important step forward in breaking the cycle of poverty and confronting youth unemployment, as labour statistics show that unemployment is lowest for tertiary graduates,” explained Gigaba.
He further stipulated that basic education remained a key focus in the 2018 Budget.
“Over the medium term, R3.8 billion allocated to the School infrastructure backlogs grant will replace 82 inappropriate and unsafe schools, and provide water to 325 schools and sanitation to 286 schools. The Education infrastructure grant is also allocated R31.7 billion over the medium term to build new schools, upgrade and maintain existing infrastructure, and provide school furniture. Meals will be provided at 19 800 schools for about 9 million learners each school day through the National school nutrition programme grant, which is allocated R21.7 billion over the medium term,” said Gigaba.
He added that government has continued progressively on the path towards National Health Insurance (NHI).
“Over the medium term, the NHI is allocated an additional R4.2 billion, funded through an amendment to the medical expenses tax subsidy. Overall, the government will be spending R205 billion on health in 2018/19 growing to R240 billion by 2020/21,” said Gigaba.
He added that government has taken steps to adjust social grant values above inflation to cover the proposed increase in the VAT.
He said the old age, disability, and care dependency grants will increase on 1 April 2018 from the existing R1600 by R90 to R1690 and by a further R10 to R1700 on 1st October 2018.
Also, the Child Support grant will increase from the baseline of R380 to R400 on 1 April and to R410 on 1 October which constitutes a 6.6% annual increase.
“An additional R2.6 billion has been added since the MTBPS to social grants to enable these changes. These adjustments resulted in social protection spending increasing by 7.9 percent per year, much above inflation. As highlighted by the President in the State of the Nation Address, the government will ensure that social grants will continue to be paid without disruption,” he said.