RSABUDGET2023

ISSUED BY

2023/24 HIGHLIGHTS #RSA Budget #RSABudget2023

Tel: (012) 315 5100
[email protected]
www.treasury.gov.za

BUDGET FRAMEWORK MACROECONOMIC OUTLOOK - SUMMARY

• Government will achieve a main budget primary surplus in 2022/23. Main budget non- 2022 2023 2024 2025
Percentage change
interest expenditure will grow, on average, slightly above consumer price index inflation in Estimate Forecast
the outer two years of the medium-term expenditure framework period. Household consumption 2.8 1.0 1.5 1.8
• The consolidated budget deficit will decline from 4.6 per cent of GDP in 2021/22 to 4.2 per
cent of GDP in 2022/23, reaching 3.2 per cent of GDP in 2025/26. Capital formation 4.2 1.3 3.8 3.5
• The Eskom debt relief, amounting to R254 billion, will require a step change in public debt Exports 8.8 1.0 2.2 2.9
which will result in government debt stabilising at 73.6 per cent of GDP in 2025/26, later and Imports 14.0 1.1 2.3 2.9
at a higher level than in the 2022 Medium Term Budget Policy Statements.
Gross domestic product 2.5 0.9 1.5 1.8
• Servicing debt requires an increasing share government’s available resources. Debt-service
costs as a per cent of main budget revenue will increase from 18 per cent in 2022/23 to 19.8 Consumer price inflation (CPI) 6.9 5.3 4.9 4.7
per cent in 2025/26 and is expected to average R366.8 billion a year over the medium term. Current account balance (% of GDP) -0.4 -1.8 -2.0 -2.1

SPENDING PROGRAMMES CONSOLIDATED GOVERNMENT FISCAL FRAMEWORK

2022/23 2023/24 2024/25 2025/26
• Total consolidated government spending will amount to R7.08 trillion over the next three
R billion/percentage of GDP Revised
years, of which 51 per cent or R3.6 trillion is allocated for the social wage. Medium-term estimates
estimate
• The 2023 Budget allocates additional funding totalling R227 billion over the next three
years. The additional funds are mainly to extend the COVID-19 social relief of distress grant Revenue 1 892.7 1 958.9 2 077.8 2 225.3
until 31 March 2024, improve investment in local and provincial government infrastructure, 28.5% 28.0% 27.9% 28.0%
and support safety and security, education and health services. Expenditure 2 168.8 2 242.6 2 359.7 2 477.4
• The learning and culture function is allocated R1.43 trillion over the next three years – the 32.6% 32.0% 31.7% 31.2%
largest proportion (24 per cent) of total allocated spending.
Budget balance -276.1 -283.7 -282.0 -252.1
• Community development is the fastest growing function, averaging 8 per cent annually over
the medium term, mainly due to the allocation of additional funds for the local government -4.2% -4.0% -3.8% -3.2%
equitable share and for infrastructure. Gross domestic product 6 651.3 7 005.7 7 452.4 7 938.5

CONSOLIDATED GOVERNMENT EXPENDITURE

TAX PROPOSALS
BY FUNCTION
• Government proposes tax relief totalling R13 billion in 2023/24 to support the clean energy 2022/23 2023/24 2024/25 2025/26 2022/23–
2025/26
transition, increase the electricity supply and limit the impact of consistently high fuel prices. R billion
• R4 billion in relief is provided for individuals that install solar panels, and R5 billion to Revised Medium-term estimates Average
estimate growth
companies through an expansion of the renewable energy tax incentive.
• Inflation-related adjustments to the personal income tax tables, the retirement tax tables, Learning and culture 446.7 457.1 476.5 497.3 3.6%
and transfer duties are provided.
Health 259.4 259.2 268.9 281.3 2.7%
• Excise duties on alcohol and tobacco will increase in line with expected inflation of 4.9 per
cent. The rate for sparkling wine is pegged at 3.2 times that of natural unfortified wine. Social development 357.8 378.5 361.3 357.0 -0.1%
• As in the 2022 Budget, government again proposes no changes to the general fuel levy or Community
230.0 259.7 276.2 289.9 8.0%
the Road Accident Fund levy. development
• To limit the impact of the energy crisis on food prices, the diesel fuel levy refund will be Economic
221.8 237.6 259.3 277.1 7.7%
extended to manufacturers of foodstuffs for a period of 2 years, from 1 April 2023 until development
31 March 2025.
Peace and security 227.8 227.3 236.3 247.4 2.8%
General public
TAX REVENUE, 2023/24 71.7 73.6 74.1 76.9 2.3%
services
Payments for
R640.3 bn Personal income tax financial assets
46.3 4.1 3.6 3.9

Allocated
R471.5 bn VAT 1 861.6 1 897.1 1 956.2 2 030.8 2.9%
expenditure
R336.1 bn Corporate income tax Debt-service costs 307.2 340.5 362.8 397.1 8.9%

R137.9 bn Customs and excise duties Contingency reserve – 5.0 5.0 5.0

Unallocated reserve – – 35.7 44.5

R90.4 bn Fuel levies
Consolidated
2 168.8 2 242.6 2 359.7 2 477.4 4.5%
R111.3 bn Other expenditure
 RSABUDGET2023
ISSUED BY

2023/24 EXPENDITURE #RSA Budget #RSABudget2023

Tel: (012) 315 5100
[email protected]
www.treasury.gov.za

CONSOLIDATED
GOVERNMENT
EXPENDITURE
R2.24 TRILLION R1.35 TRILLION
SOCIAL
SERVICES

Economic regulation and infrastructure R124.9 bn Basic education R293.7 bn

Industrialisation and exports R40.5 bn National Student Financial Aid Scheme R50.1 bn

Agriculture and rural development R27.8 bn University transfers R45.1 bn

R237.6 bn R457.1 bn
ECONOMIC Job creation and labour affairs R24.6 bn Skills development levy institutions R24.3 bn LEARNING
DEVELOPMENT AND CULTURE
Innovation, science and technology R19.8 bn Education administration R18.5 bn

Technical & vocational education and training R13.3 bn

Police services R112.1 bn District health services R113.1 bn

Defence and state security R52.7 bn Central hospital services R48.6 bn

Law courts and prisons R51.4 bn Other health services R46.1 bn

R227.3 bn R259.2 bn
PEACE AND Home affairs R11.1 bn Provincial hospital services R40.2 bn HEALTH
SECURITY
Facilities management and maintenance R11.3 bn

Public administration and fiscal affairs R48.4 bn Municipal equitable share R96.5 bn

Executive and legislative organs R16.8 bn Human settlements, water R61.7 bn

and electrification programmes
External affairs R8.4 bn
R73.6 bn Public transport R53.2 bn R259.7 bn
GENERAL PUBLIC COMMUNITY
SERVICES Other human settlements R48.2 bn DEVELOPMENT
and municipal infrastructure

Old-age grant R99.1 bn

R340.5 bn
DEBT-SERVICE COSTS Social security funds R92.4 bn

Child-support grant R81.9 bn

R378.5 bn
Other grants R72.9 bn SOCIAL
DEVELOPMENT
R5.0 bn Provincial social development R21.4 bn
CONTINGENCY RESERVE
Policy oversight and grant administration R10.9 bn