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[LIVE BLOG] 'MPs, MPLs not getting salary increases' - Mboweni delivers Budget speech 2019

Finance Minister Tito Mboweni is delivering his first Budget speech in Parliament on Wednesday afternoon.

[WATCH LIVE] Budget Speech 2019

Missed the key allocations in this year's budget? Catch up below:

And with this Bible quote, Mboweni finishes his speech:

"For ye shall go out with joy, and be led forth with peace: the mountains and the hills shall break forth before you into singing, and all the trees of the field shall clap their hands. Isaiah 55:12."

"Highlights of this Budget:

1. We are taking tough steps to fix the fiscal position and state-owned enterprises.
2. Our children are our future. Most of the spending goes to education, and we will
strengthen early childhood development and support higher education for the most
deserving.
3. On land, we have set aside money to help our people buy their own houses, support
land reform, and transfer title deeds.
4. On electricity, we face tough choices on Eskom.
5. We are reprioritising resources towards the President’s infrastructure fund and away
from the wage bill."

Mboweni now quotes Psalm 23:

“Even though I walk through the darkest valley, I will fear no evil, for you are with me;
your rod and your staff, they comfort me.”

Mboweni is rounding up and now doing his vote of thanks.

"Madam Speaker it is prudent to say that we are a shareholder in a number of multilateral institutions and this ensures that South Africa plays its rightful place on the continent and the world."

"The sustainability challenge affects us all. Climate change is real. The steps being undertaken at Eskom will allow us to expand renewable energy, and the carbon tax will come into effect from 1 June 2019."

"Government is rolling out a maths and science grant. The Governor of the South African Reserve Bank is driving an ambitious FinTech programme, together with colleagues from the other financial-sector regulators."

Our budget spending has to focus on getting our country ready for technology. The first step is
to fix the education system. 

"In addition, government will commit R100 billion over the next decade."

"In addition, government will commit R100 billion over the next decade. 

"The infrastructure fund is a central pillar of the Budget and of reprioritisation. It will accelerate
R526 billion worth of on-budget projects by bringing in the private sector and development finance institutions. In several instances the private sector will design, build and operate key infrastructure assets. 

"R625 million is allocated to the Development Bank of Southern Africa, the Government Technical Advisory Centre and the Presidential Infrastructure Coordinating Commission to strengthen project preparation in this context and on a speeded up basis, projects based on rural roads and water will be prioritised."

"So far we are working on a wastewater treatment facility works in the Vaal, a solar water geyser programme and student accommodation."

"Second, is streamlining the law to make it easier to build. Third, better information for everyone. And finally, is to actually build."

"We spend a lot on infrastructure. Four things will get us better infrastructure: First is to create
a sensible project pipeline."

The budget is also about our long-term vision. 

"Finally, service providers must build what they promised at a reasonable rate. Thuma Mina. Pay your municipal bills on time."

"Collecting the revenue due to the state is the underlying foundation of our democracy, of building a nation, and it is our duty to pay for services especially if we can afford to do so."

"We need to build a strong culture of payment in our country. 

"Provincial treasuries and the municipalities have a partner in the National Treasury to work with on their constitutional obligations. Grants such as
the Financial Management grant, and the Municipal Systems Improvement grant are available. 

"My colleagues at provincial and municipal level are working as best as they can to deal with rising wage costs and reduced transfers."

"Over the past couple of years South Africa has been grappling with corruption. We must root
this out. National Treasury and the Department of Justice will work swiftly to support the
establishment of the new Investigating Directorate in the NPA."

"The South African National Roads Agency is allocated an additional R3.5 billion over the next three years to improve non-toll roads. In October, I emphasised the importance of the user pay principle. It is a principle that we should uphold. In any future negotiations, this should be borne
in mind. 

"Our Help to Buy subsidy helps first-time home buyers purchase a home. As a pilot, it gets R950 million over three years."

"Government continues to focus on supporting people to own their own homes. Funding totalling R14.7 billion over the two outer years has been reprioritised to two new conditional grants for informal settlements upgrading which will enable these households to have access to basic amenities."

"R1 billion has been added to raise the wages of community health care workers to R3,500 per month. Finally about R319 million is allocated to eliminate malaria in South Africa."

"In health, we need simple, effective interventions. We need more doctors and nurses. R2.8 billion has been reprioritised to a new human resources grant and R1 billion for medical interns."

"In the fight against poverty and inequality, Government has allocated R567 billion for social
grant payments. In 2019, the grant values will increase as follows:

• R80 increase for old age, disability, war veterans and care dependency grants.
• R40 increase for the foster care grant to R1 000.
• The child support grant will increase to R420 in April and to R430 in October."

"Fully subsidised education and training for the poor is government’s flagship higher education
intervention. Over the medium term government will spend R111.2 billion to ensure that 2.8 million deserving students from poor and working class families obtain their qualifications at universities and TVET colleges."

"Over R30 billion is allocated to build new schools and maintain schooling infrastructure. An additional R2.8 billion is added to the School Infrastructure Backlogs grant to replace pit latrines at over 2 400 schools."

"The Land Bank will support smallholders, and leverage partnerships with other financial
institutions. It aims to disburse R3 billion in the next fiscal year. 

"We are supporting private sector investments in agriculture by emerging farmers. R1.8 billion is allocated for the implementation of 262 priority land-reform projects over the next three years. R3.7 billion is set aside to assist emerging farmers seeking to acquire land to farm."

"R481.6 million is allocated to the Small Enterprise Development Agency to expand the small
business incubation programme. 

"The Jobs Fund is a vital complement to private sector job creation. The Fund has disbursed R4.6 billion in grant funding, and created well over 200,000 jobs since inception. The allocation
to this Fund will rise over the next three years to R1.1 billion. 

"Government has allocated R19.8 billion for industrial business incentives, of which R600 million has gone to the clothing and textile competitiveness programme. This will support 35 500 existing jobs and create about 25 000 new jobs over the next three years."

"My fellow Minister will shortly be issuing policy direction to ICASA for the licensing of spectrum.
I will work relentlessly with the Minister until this matter is resolved. This includes resourcing ICASA for this mandate. 

"Data costs must fall!"

"The largest allocations are R1.2 trillion for learning and culture, R717 billion for health services (including National Health Insurance) and nearly R900 billion for social development. 

"The budget proposes total non-interest spending over the next three years of R5.87 trillion. This after taking into account measures taken over the three years to consolidate the public finances

Uh oh, no salary increase for Parly bigwigs this coming financial year.

"As a gesture of goodwill, members of Parliament and provincial legislatures and executives at public entities will not be receiving a salary increase this financial year."

"The system of staffing our diplomatic missions is unjustified and should be reviewed urgently. 

"The first step is to allow older public servants who want to do so, to retire early and gracefully. This will save an estimated R4.8 billion in 2019/20, R7.5 billion in 2020/21 and R8 billion in 2021/22. 

"The public wage bill is unsustainable. We must shift expenditure to investment. National and provincial compensation budgets will be reduced by R27 billion over the next three years."

"In this budget, 47.9 of nationally-raised funds are allocated to national government, 43 per cent to provinces and 9.1% to local government over the medium term, after providing for debt-service costs and the contingency reserve. Pro-poor spending continues to grow in real terms."

"Madam Speaker, the Budget remains redistributive. Taxes raised in wealthier areas fund
poorer provinces and municipalities. 

"Restoring our finances and fixing our state owned enterprises will take great courage. But it can be done." 

"As a result, gross national debt will still stabilise at about 60% of GDP in 2023/24, broadly in line with our October forecast."

"This coming year, interest expenditures will be R209.4 billion. This is R1 billion per day. The expenditure and tax adjustments are designed to largely counteract the additional allocation for Eskom and the revenue shortfall."

"Put another way, we are borrowing about R1.2 billion a day, assuming that we don’t borrow money on the weekend when there is Soweto Derby."

"To summarise: in this coming year, we expect revenues of R1.58 trillion and spending of R1.83 trillion. That means we will spend R243 billion more than we earn."

"Cabinet is considering a proposal to end the issuing of guarantees for operational purposes. Expiration dates on guarantees will also be strictly enforced. As the President announced, strategic equity partners will be found where possible."

During this past financial year, total guarantee utilisation increased by R51.1 billion:

1. Eskom used an additional R50 billion of its R350 billion guarantee in 2018/19. 
2. Denel was granted a further R1 billion guarantee.
3. SAA guaranteed debt increased by R6.2 billion.
4. My congratulations to the Land Bank, which repaid debt, reducing government’s
guarantee exposure. Other entities reduced their guarantees, unfortunately in some
cases as a result of appropriations. 

Financial support will be budget neutral as far as possible. 

"On other state-owned enterprises, we are reviewing our framework for state-owned enterprise support. Government has revised the contingency reserve upwards to R13 billion for 2019/20 to respond to possible requests for financial support."

"Minister Gordhan and the strong team he has built at the Department of Public Enterprises will
continue to exercise close and ongoing monitoring of Eskom. 

"We are setting aside R23 billion a year to financially support Eskom during its reconfiguration."

"I want to make it clear: the national government is not taking on Eskom’s debt. Eskom took on
the debt. It must ultimately repay it."

"Pouring money directly into Eskom in its current form is like pouring water into a sieve."

"In the State of the Nation Address, the President announced a clear and executable plan for
electricity. At the core of this plan is the subdivision of Eskom into three independent components."

"Madam Speaker, I said in October that we would have no holy cows when it comes to our
approach to state owned enterprises."

"The SOEs pose very serious risks to the fiscal framework. Funding requests from SAA, SABC,
Denel, Eskom and other financially challenged state-owned enterprises have increased, with
several requesting state support just to continue operating. Isn’t it about time the country asks
the question: do we still need these enterprises? If we do, can we manage them better? If we
don’t need them, what should we do?"

"This offsets the baseline reductions and as such the expenditure ceiling is revised upwards by R16 billion over the next three years."

"Provisional allocations are made for the financial support to Eskom and the Infrastructure Fund. 

"Half of these reductions come from adjustments to government’s spending on compensation. R12.8 billion
comes from measures to reduce spending on specific programmes. 

"Since October, government has taken steps to adjust baseline expenditure downwards by a total of R50.3 billion over the medium term."

"The Road Accident Fund levy increase is not enough to match the Fund’s R215 billion liability.
We urge the Department of Transport to quickly resubmit the Road Accident Benefit Scheme Bill for Parliament’s urgent consideration. It will help stabilise fuel prices."

And now for sin taxes...

"1. The excise duty on a can of beer goes up by 12 cents to R1.74
2. A 750ml bottle of wine will have an excise duty of R3.15, which is 22 cents more
3. The duty on a 750ml bottle of sparkling wine goes up by 84 cents to R10.16
4. The duty on a bottle of whiskey will go up by R4.54 to R65.84
5. A pack of 20 cigarettes goes up by R1.14 cents to R16.66
6. The excise duty on a typical cigar will go up by about 64 cents to R7.80
7. There will be no change to the excise duty on sorghum beer as a retirment present to Honourable Mangosuthu Buthelezi (MPs laugh and applause). 

"Fiscal prudence requires some tax changes. We propose additional revenue measures of R15 billion in 2019/20."

"Judge Davis will assess the tax gap, which is the difference between revenue collected and
what ought to be collected. We will also review the proliferation of duty free shops inside South
Africa."

These are the recommendations:

1. A new Commissioner will be appointed in the coming weeks.
2. A new Illicit Economy Unit launched in August 2018 will fight the trade in illicit cigarettes
and tobacco.
3. The large business unit was a major source of tax collection, and its skill was renowned.
This unit will be reintroduced and will be formally launched in early April 2019.
4. SARS is strengthening its IT team and its IT systems and this is crucial for our tax
collection efforts.
5. Information sharing agreements with allies will help fight cross-border tax evasion
schemes. 

Mboweni is now highlighting the recommendations by the Nugent Commission that will be put into place.

"SARS is being fixed. My thanks go to Judge Nugent and his Panel for their wise counsel."

"Approximately half of the increase in the shortfall since October is due to higher than expected
VAT refunds. This lowers revenue collection for the year, but puts money back into the economy."

"First, we must look at the President’s task list. Then we must match the resources we have to
the plan. In this current year, tax revenue has been revised down by R15.4 billion compared to
our October estimate."

"Madam Speaker, walk with me on a journey of how we have chosen to respond to the challenges facing us." 

A DA MP chips in between Mboweni's sentences, asking 'where is the money coming from?'.

"South Africa is a small open economy and we are impacted by events in the global economy
World growth is now expected to slow, constraining South Africa’s export growth forecast."

"We now expect a slower but still steady recovery after the 2018 technical recession. It is expected that real GDP growth in 2019 will rise to 1.5%, and then strengthen moderately to 2.1% in 2021." 

"Then, we expected economic growth of 0.7% in 2018. This is still our estimate. But, many of the risks that we warned about have materialised."

"In October, during the 2018 Medium Term Budget Policy Statement (MTBPS), I outlined our main budget fiscal outlook. At that time, I projected that in 2018/19 tax revenue would be R1.3 trillion and that spending would be about R1.5 trillion. That left us with a budget deficit of R215 billion, or 4.3 per cent of GDP."

"It will not be easy. There are no quick fixes. But our nation is ready for renewal. We are ready
to plant the seeds of our future.

Mboweni says this year's budget is built on six fundamental prescripts: 

1. Achieving a higher rate of economic growth
2. Increasing tax collection
3. Reasonable, affordable expenditure
4. Stabilising and reducing debt
5. Reconfiguring state-owned enterprises
6. Managing the public sector wage bill 

"Madam Speaker, our President has set us on a track of renewal. But today, I will leave the poetry (and the singing) to the President."

"Today, I bring you a seed to prove that if we plant anew, we can return to those plum times."

"It has a long history of medicinal use. It is resilient, sturdy and drought resistant. It withstands the elements. We must take the bitter with the sweet."

"Today, we walk into this house with an iconic South African plant, the aloe ferox. This is one
of the best known South African plants." Mboweni pulls out the pot plant he brought with him.

"A few years ago, Madam Speaker, one of my predecessors [Trevor Manuel] handed out succulent plums to the members of this house, to demonstrate the times of plenty we were in."

"If we look after what we sow, and what we have ploughed and laboured over so tirelessly, since
the founding of our democracy, it will grow and the seed will bear fruit. However, if we abandon
our fields, the seeds we plant will wither."

"Despite our best efforts, sometimes, ravages and risks such as pests or rot could attack our
green shoots, but we must persevere; we must prune and pluck away at the rot, until there is
growth. " Opposition MPs heckle at this, while ANC MPs applaud.

"It is time for us to sow the seed of renewal and growth. But for the seed to be prosperous, as Zechariah enjoins us, we must first cultivate the soil."

"As a part-time farmer, I know that in order for the people to “possess all these things”, we have
to plant anew."

Mboweni takes us to church for a second...

"How do we make this renewal a reality? I turned to the Good Book for guidance. 

In Zechariah 8 verse 12 it says:
'For the seed shall be prosperous; the vine shall give her fruit, and the ground shall give
her increase, and the heavens shall give their due; and I will cause the remnant of this
people to possess all these things.'"

"It is a task list for all of us. It lays out a series of interventions that will put South Africa on a bold new path."

"In the 2019 State of the Nation Address, our President set out an ambitious agenda for our
nation. It is an agenda that speaks to the South Africa that we can be."

Mboweni outlines he'll be tabling the following today:

1. The Budget Speech,
2. The 2019 Budget Review
3. The 2019 Estimates of National Expenditure,
4. The Division of Revenue Bill,
5. The Appropriation Bill, and
6. The Public Audit Excess Fee Bill. 

Mboweni says the budget is to safeguard the sound financial status of the country.

"Today, I submit before this august House the National Budget. It reflects, to the best of my
judgment, the nation’s financial situation."

Mboweni steps up to the podium with a pot plant in hand and does his greetings.

Mboweni has a big task ahead of him as he delivers what's considered the country's toughest budget yet.

All eyes are on Finance Minister Tito Mboweni as he delivers his first Budget speech in Parliament on Wednesday afternoon.