South Africa Budget 2014 – all you need to know

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South Africa Budget 2014


• Jabulani Sikhakhane
Department of Finance spokesperson
+27 (0)12 315 5944


• National Development Plan to grow jobs
• South Africa is ‘Country of the Future’
• Team SA to call for investment

Lucille Davie

Over the past five years, the government has spent more than R100-billion on employment programmes, creating more than six million job opportunities, Finance Minister Pravin Gordhan said in his 2014 Budget speech, delivered on Wednesday 26 February in parliament in Cape Town.

“Allocations will continue to grow strongly, and 6 million job opportunities will be created over the next five years,” he said.

Watch the Budget speech:

Job creation was a central priority of the National Development Plan (NDP), Gordhan said, the government’s 30-year plan to boost economic growth. Since the low point of the 2009 recession, 1.3-million jobs had been created. But unemployment remained at an uncomfortable 24%, or almost 5-million people unemployed, a figure that was “still far too high”.

“We know that job creation is a central priority of the National Development Plan. Bantu bakuthi masibambisane sakhe amathuba emisebenzi. (Fellow South Africans, let us work together to create opportunities for employment.)”

Since 1996, more than 5.9-million jobs had been created, and since 1994 the average income of South Africans had increased by over 30%. This “will continue to rise in the years ahead”.

Budget 2014 key documents

People’s guides

Billions of rands allocated

“It is time for a bold vision for our future as set out in the National Development Plan,” said Gordhan. “It is time for action and implementation. It is time to move South Africa forward to the next stage of our historic journey to more rapid growth, jobs and development – time to leave behind poverty, joblessness and inequality.”

Several measures were in place to reach these goals, to which “billions of rand have been allocated”:

  • Stepping up the implementation of the Expanded Public Works Programme
  • Implementation of the Community Work Programme in every municipality by 2017
  • Introduction of the Youth Employment Tax Incentive, which in one month produced 56 000 beneficiaries
  • Establishment of special economic zones, industrial incentives, and support for agriculture and labour-intensive sectors
  • Ramping up of skills development and further education and training programmes
  • Investment in housing
  • Support for small and medium enterprises
  • Jobs Fund partnerships with private and public sector development agencies

And to ease the burden on those who lost their jobs, the government would increase unemployment benefits from 238 to 365 days, on condition that claimants were actively seeking work.

Gordhan said that the growth projection for this year was 2.7%, with an expected budget deficit of 4%. The global economic outlook remained unsteady, and South Africa was experiencing a weak exchange rate. Ideally, the economy should grow at 5% a year to create jobs, he acknowledged.

Support for business

The state would support businesses in an effort to encourage job creation. This would take the form of:

  • Increased support and tax relief for entrepreneurs and small businesses
  • Strengthened incentives for industry, including funding for special economic zones
  • Giving training and financial support to about 500 000 subsistence and small-holder farmers

Gordhan said that over the past five years, more than R100-billion had been spent on employment programmes, creating more than four million job opportunities. Also over the past five years, spending on infrastructure, where jobs were created, amounted to R1-trillion. In the next three years, R847-billion would be spent. In addition, R22-billion was spent on industrial incentives over the past five years. Almost the same amount was budgeted for the following three years.

Infrastructure investment

The public infrastructure investment of R847-billion over the next three years would be spent in the following ways:

  • The first phase of the Medupi power station, which was expected to be completed towards the end of this year
  • Transnet would further expand its coal, iron ore and manganese lines
  • The Passenger Rail Agency of South Africa would implement its rolling procurement programme this year – last year it refurbished 500 Metrorail coaches
  • Spending on social infrastructure – health, education and community facilities – would increase from R30-billion in 2012/13 to R43-billion in 2016/17, with priority given to programmes that would eradicate school infrastructure backlogs and refurbish clinics and hospitals
  • Some R40-billion in infrastructure grants would be transferred to local governments for their water, sanitation, energy and environmental needs, in the 2014/15 year

“The private sector is also making an increasing contribution to infrastructure investment,” said Gordhan. Contracts for 47 renewable energy projects were concluded in the 2012/13 year. “These will add 2 460MW of power capacity, and investment of R70-billion. A further R45-billion in investment will be contracted this year.”

He added: “We have achieved much over the past five years, in a very difficult post-recession climate. But there is more to do ahead, more to build, more to put right, more to learn, more to implement. We can only do this together.”

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