Summary: Gordhan’s 2012 budget statement

Government spending over the next two years will stick to the medium-term forecasts announced in February, finance minister Pravin Gordhan said on Thursday.

In his 2012 medium-term budget policy statement, tabled in parliament, he said the third year (2015/16) would see some moderate growth.

According to the document, government spending is set to rise from the revised estimate of R1,057 trillion in 2012/13, to R1,339 trillion in 2015/16, while revenue is expected to grow from R900,6bn to R1,205 trillion over the same period.

This makes for a deficit of 4,8% in 2012/13, but declining to 3.1 percent in 2015/16.

Real GDP growth for 2012 is now expected to be 2,5%, increasing to 4,1% in 2015, and GDP at current prices R3,202 trillion in 2012, and R4,264 trillion in 2015.

CPI is expected to be 5,7% for 2012, dropping to 4,9% in 2015, and the current account balance (as a percentage of GDP) -5.9% for 2012, slowly dropping to -5,5% in 2015.

In terms of consolidated government spending, the health and social protection sector will continue to receive the lion’s share over the medium-term expenditure framework (MTEF) period — growing from a revised estimate of R246,2bn in 2012/13, to R306,4bn in 2015/16, an annual average increase of 7,6%.

The education sector follows with R220bn in 2012/13, rising to about R269bn in the outer year, an average of 6,9%/year.

Spending on local government, housing and community services is projected to rise from the revised 2012/13 estimate of R121,7bn, to R157,5bn in 2015/16, an average of nine percent a year.

The allocation for public order and safety goes from R99,7bn to R119,7bn over the same period, averaging 6,3%/year.

Spending on transport, energy and communications will increase from R83,5bn to R105,1bn, an average of 7,9%/year.

General and public services spending follows, growing from R53,3bn in 2012/13, to R62,1bn in 2015/16, averaging 5,2%/year.

Economic services goes from R44,6bn in 2012/13, to R52,6bn in the outer year, 5,6% on average per year.

The employment and social security sector is allocated a revised estimate of R43bn in 2012/13, and R55,9bn in 2015/16, increasing by 9,1% on average each year.

The defence and state security sector sees growth from R42bn to R50,2bn over the same period, 6,1% on average annually.

The smallest slice goes to science and technology, a revised estimate of R14,1bn increasing to R16bn in 2015/16, 4,1% on average a year.

Provision is also made for a contingency reserve of R4bn in 2013/14, R10bn in 2014/15, and R30bn in 2015/16.  — Sapa