Last week, the Minister of Finance presented a national budget that will help us to achieve more rapid and inclusive economic growth while supporting our developmental goals.
Over the last five years, we have taken several actions to get our economy back on track. We have implemented far-reaching reforms in the energy, logistics, water and telecommunications sectors to address the binding constraints on growth. We have created a stable macroeconomic environment to encourage investment. And we have expanded public employment and social protection to create jobs and provide an income for those who are unemployed.
This budget takes us further along the path of reviving our economy and rebuilding our institutions, in at least three important ways.
First, the 2024 budget shows that we staying the course in our commitment to achieve a sustainable fiscal trajectory.
Over the past fifteen years, our debt burden has grown to a point where we are spending more on interest payments than we are on education or health care services. By reducing debt, we will create more space to spend on the things that matter – building our infrastructure, improving our schools and hospitals, and making our communities safer.
At the same time, the less the state borrows the more can be invested in the economy. This will help to create a virtuous cycle of investment and growth in the years to come.
Second, the budget protects critical services and social spending, making sure that government can deliver on its most important obligations to all South Africans.
We have allocated additional funds for service delivery, which will help to pay the salaries of police officers, teachers, nurses and doctors. This year alone, we will spend more than R480 billion on education, R272 billion on health and R265 billion on other services like water, housing and public transport.
A further R7.4 billion will go towards the Presidential Employment Stimulus, which has already created more than 1.7 million opportunities for work and livelihoods over the last three years, ensuring that key programmes like school assistants will continue.
We are also increasing social grants to help the poorest households cope with the rising cost of living. Additional money has been allocated to the fight against corruption and state capture, following through on the commitment I made in the State of the Nation Address.
Third, the budget includes new measures to support growth and create jobs, while rebuilding infrastructure.
A new R2 billion grant has been established to fund the rollout of smart meters in municipalities, which will help to modernise our electricity system and reduce load shedding. A generous incentive will be introduced to support the manufacturing of electric vehicles from 2026 onwards, as part of our commitment to position South Africa as a leading player in the green economy.
Innovative new funding instruments have been introduced for infrastructure projects, and the National Treasury has published revised regulations to make it easier to implement public-private partnerships. These measures will enable much greater investment in infrastructure.
Our economy has been weighed down by more than a decade of low growth and rising debt, made worse during the state capture era as confidence was eroded. During the course of this administration, we have worked hard to change this and build a foundation for higher growth and more jobs.
The 2024 budget shows that we are heading in the right direction. We are determined to continue on this path, following through on economic reforms, getting our public finances in shape and protecting basic services for the poor. Working together we will ensure that better years lie ahead.
This message was first published on 26 February 2024.
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