For those who missed finance minister Pravin Gordhan’s government budget speech this afternoon, here is a recap of the 2012 budget plan highlights:

1. Gordhan has assured the public that South Africa’s finances are in “good health”. A budget deficit of 4.6% of GDP is projected for the fiscal year to March 2013, with plans to reduce this to 3% of GDP in 2014/15.
2. Infrastructure expansion is a central priority in 2012. The Budget Review identified 43 major infrastructure projects totaling R3.2 trillion in expenditure. Over the medium term period ahead, approved and budgeted infrastructure plans amount to R845 billion.
3.  Total spending is set to reach R1.1 trillion next year, representing 32% of GDP.
4.  The budget will continue to support job creation, with a particular focus on unemployed youth. An additional R4.8 billion has been budgeted over the 2012 period for the expanded public works programme.
5. The budget will provide for personal income tax relief of R9.5 billion, with further measures to increase tax compliance planned.
6. Real GDP growth is expected to fall to about 2.7% in 2012 against the backdrop of the global economic slowdown, but should recover to 3.6% and 4.2% growth in 2013 and 2014.
7. It is estimated that only 68% of allocated funding was spent in 2010/11. Government departments and municipalities that do not spend, under-spend or misspend their allocated funding risk losing the allocations.
8. The revised estimate of tax revenue recovered for 2011/12 is R739 billion. Total government revenue for 2012/13 is estimated at R905bn, or 27.4% of GDP.
9. Smokers will have to fork out 58 cents more for a packet of 20 cigarettes as tax rates on tobacco products are set to increase between 5-8% this year. The price of spirits is set to increase by 20%, while the price of beer and wine will be up by 10% and 8% respectively. The national tax based on gross gambling revenue should be introduced and will be made effective from 1 April 2013
10. Another top priority for the government is sector spending. Education sector spending will be up from R207 billion in 2012/13 to R236 billion in 2014/15, with additional allocations of R18.8 billion over the medium term. An additional R12.3 billion will be allocated to South Africa’s health sector over next three years. National Health Insurance is to be phased in over 14-year period.
11. Inflation is expected to average 6.2% in 2012, above the 3-6% target range, before falling back to 5.3% in 2013 and 5.1% in 2014.
12. Gordhan has said that there will be further tax relief for small businesses and micro-enterprises, and that tax-free threshold for small business corporations would be increased to R63 556, adding the 10% rate would be reduced to 7%.

Source: Fin24