NAME: SAHL PARUK GRADE: 8T DUE DATE: 10 MARCH 2023

EMS BUDGET TASK

Step 1: Brief discussion on the 2023 national budget............................................................................1

Step 2: infographic on how I would make the 2023 budget..................................................................3
Step 3: justifying the budget..................................................................................................................4

Step 1: Brief discussion on the 2023 national budget

Local and global outlook

South Africa’s economy grew by an estimated 2.50% in 2022 which is an upward revision
from the 1.9% projected in 2022.Real Gross Domestic Product (GDP) growth is projected to
average 1.4% from 2023 to 2025, compared to the estimated 1.60% in October
2022.Regarding the global outlook, the International Monetary Fund projects growth to
slow from an estimated 3.4% in 2022 to 2.90% in 2023.

Fiscal outlook

National Treasury will be bringing the fiscal deficit down without resorting to tax increases
or any further cuts in social wages and infrastructures. This is due to the fiscal consolidation
strategy that was adopted several years ago. In 2022/2023 the consolidated fiscal deficit is
projected at 4.2% of GDP and this is expected to reach 3.2% in 2025/2026.

Energy and Eskom

The government will be taking over a portion of Eskom’s debt as they feel that this will ease
the pressure on the company’s balance sheet, enabling Eskom to invest in transmission and
distribution infrastructure and conduct maintenance to improve the availability of
electricity. And secondly, R337 billions of Eskom’s debt is already government guaranteed.
Due to the Eskom debt relief of R254 billion, the government debt is expected to stabilise at
a higher level of 73.6% of GDP in 2025/2026.The government has announced two tax
measures to encourage businesses and individuals to invest in renewable energy and
increase electricity generation. From 1 March 2023, businesses will be able to reduce their
taxable income by 125% of the cost of an investment in renewables and there will be no
thresholds on the size of the projects. From 1 March 2023, individuals who install rooftop
solar panels will be able to claim a rebate of 25% of the cost, up to a maximum of R15 000.

Infrastructure

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The public sector is projected to spend R903 billion over the medium term of which R448
billion will be spent by state-owned companies, public entities, and public-private
partnerships.

Revenue and tax proposals

Tax revenue collections for 2022/2023 are expected to total R1.69 trillion. This exceeds the
2022 budget estimate by R93.7 billion. As a result, there are no major tax proposals in the
budget. The fuel levy and Road Accident Fund levy will not be increased this year. This will
take effect from 1 April 2023 for two years. Personal income tax brackets will be adjusted
for inflation, which will increase the tax-free threshold from R91 250 to R95 750.Medical tax
credits will also be adjusted by inflation to R364 per month for the first two members and
R246 per month for additional members. The retirement and withdrawal lump sum tax table
will be adjusted upwards by 10%. This means that at retirement or retrenchment, the once-
off tax-free amount will increase to R550 000.Transfer duty will be increased by 10%,
allowing properties valued under R1.1 million to avoid any transfer duty payments. The
government intends to publish a revised draft legislation on the two-pot retirement system.
The two-pot system will be implemented from 1 March 2024 and any withdrawals from the
accessible “savings pot” will be taxed as income in the year of withdrawal. There will be an
increase in the excise duties on alcohol and tobacco of 4.90% which is in line with inflation.
This means that the duty on:
- 340ml can of beer increases by 10 cents
- 750ml bottle of wine increases by 18 cents
- 750ml bottle of spirits increases by R3.90
- 23g cigar increases by R5.47
- A pack of 20 cigarettes increases by 98 cents.

Expenditure

The budget has allocated additional funding of R227 billion over the medium term. R66
billion is allocated to social development with R36 billion to fund the extension of the Covid-
19 social relief of distress grant until 31 March 2024.R30 billion will be for other social grants
which means:
- Old age and disability grant will increase to R2 080 per month on 1 April 2023 and a
further R10 on 1 October 2023 resulting in a total increase to R2 090 per month.
- Child support increases to R510 per month on 1 October 2023 while the foster care
grant increases to R1 130 per month.
R695 million will be available in this budget year for disaster response and a further R1
billion will be available next year.

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Step 2: infographic on how I would make the 2023 budget

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Step 3: justifying the budget

I made the infrastructure what it is because we already have a lot of buildings so we should spend
more money in more important other things.

I made the fuel and tax what it is because inflation is not much of a problem anymore so lower the
prices.

I made the medical facilities what it is because we have crappy medical facilities so we should spend
more on it to make it better.

I made social grants what it is because social grants are not too important so we should spend too
much on it.