Budget 2017: Where the money is going
Finance Minister Pravin Gordhan says the 2017 budget reflects a balance between maintaining our spending commitments and ensuring long-term health of the public finances.
Gordhan is delivering his budget speech in Parliament, saying slow economic growth has held us back and decisive steps are needed to strengthen confidence, investment and growth.
"Acting too quickly to reduce the deficit would harm service delivery, delay economic recovery, and compromise tax revenue collection. But to ignore our fiscal targets would result in interest rate hikes, unsustainable commitments and credit rating downgrades," says Gordhan.
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Gordhan says the proposed expenditure for 2017/18 comes to R1.56 trillion.
Interest on debt amounts to R169 billion, projected revenues amount to R1.41 trillion and the balance of R149 billion, or 3.1 per cent of GDP, will be borrowed.
"Government debt now stands at R2.2 trillion, or 50.7 per cent of GDP. Interest payments are a rising share of expenditure. By acting now to stabilise debt, we will ensure that future generations will not pay for today's expenses, 20 or 30 years from now," says Gordhan.
Gordhan says a substantial additional allocation to higher education is again proposed, adding R5 billion to the R32 billion previously announced.
"After debt service and post-school education and training, the fastest-growing spending categories are health, social development, and community and economic infrastructure. We will continue to safeguard expenditure that protects poor households. But the medium term expenditure limits are tight," says Gordhan.