Latest news with #MediumTermExpenditureFramework
Eyewitness News
a day ago
- Business
- Eyewitness News
Gauteng govt says it is making progress in paying of its e-toll debt
JOHANNESBURG - The Gauteng government is making progress in paying off its e-toll debt, with a further payment of R3.3 billion expected to be made to the South African National Roads Agency (SANRAL) on Monday. Finance MEC Lebogang Maile announced at a media briefing on Sunday that this marked the department's second payment. ALSO READ: Gauteng govt set to make second payment of e-toll debt on Monday When the e-toll system was abolished, National Treasury agreed to cover 70% of the debt, leaving the province responsible for the remaining 30%. The province has now paid off nearly half of its R15.9 billion e-toll debt. Maile emphasised that the province remained committed to settling the debt. "We wish to announce that tomorrow, the 30th of June 2025, the Gauteng Provincial Government will honour the province's obligation by paying the second instalment towards the e-tolls debt as disclosed in the 2025 Medium Term Expenditure Framework (MTEF). "The second amount due on the 30th of June 2025, based on the memorandum of agreement, is R3.377 billion in terms historical debt. This is the amount that we will be paying to the National Treasury tomorrow as a second instalment as part of our 30% contribution."
IOL News
a day ago
- Business
- IOL News
Gauteng commits to R3. 3 billion e-toll debt payment amid ongoing road upgrades
Finance MEC Lebogang Maile, is set to make a landmark payment of R3.3 billion on Monday, fulfilling the provincial government's commitment to cover 30% of the provincial e-toll debt. Image: Itumeleng English/independent Newspapers Finance MEC Lebogang Maile has committed the province to paying off its 30% portion towards servicing the e-toll debt with the provincial treasury expected to make the payment of R3.3 billion towards the debt on Monday. This comes more than six months since the province made the first payment of R3.8 billion in September last year following the scrapping of the e-toll system early in 2024 with the National Treasury having agreed to cover 70% of the debt as the province took responsibility for the remaining 30%. According to reports, the debt is set to be repaid in five annual installments. On Sunday, during a press briefing, Maile indicated that an amount of R5.76 billion will be paid on Monday for the e-toll debt while another portion will be paid towards SANRAL freeway upgrades. "We are committed to increasing efficiency and systems, cost effectiveness and eliminate leakages. Identifying potential new revenue collecting sources that have not been explored and the use of alternative funding and implementation models to achieve more value. We are confident that alongside other interventions such as implementation of advanced technology and digitisation of our supply chain management, we will be able to realise the objectives that we have set before ourselves with the revenue enhancement strategy," he said. Maile revealed that the provincial government has been making progress in paying off its e-toll debt. "To restate, the Gauteng Provincial Government will tomorrow, make a transfer total of R5.76 billion towards the e-toll debt and the contribution towards the Sanral Gauteng freeway improvement project. There is much more work that still needs to be done to unpack the financing model.... We wish to announce that tomorrow, the 30th of June 2025, the Gauteng Provincial Government will honour the province's obligation by paying the second instalment towards the e-tolls debt as disclosed in the 2025 Medium Term Expenditure Framework (MTEF). "The second amount due on the 30th of June 2025, based on the memorandum of agreement, is R3.377 billion in terms historical debt. This is the amount that we will be paying to the National Treasury tomorrow as a second instalment as part of our 30% contribution," he added. Maile added that the province will be embarking on various alternative ways to fund road upgrades stating, "For the policy perspective and financial impact as well as practical solutions. Of the studies undertaken by Sanral, there exists institutional knowledge in terms of the new routes and upgrades on new routes.
eNCA
22-05-2025
- Business
- eNCA
DA welcomes R1TN for infrastructure
JOHANNESBURG - The DA has welcomed the R1 trillion allocated for infrastructure development in order to grow the economy. According to Willem Aucamp of the DA this is what the party has been fighting for. "We have a budget that will that will have no VAT increases, no personal tax increases nor corporate VAT increase and that is what the democratic alliance has been advocating for. We do not have an income problem in this country but rather a expenditure problem," he says. Aucamp further welcomed the minister decision to conduct a spending review. He says this will allow for the government to review ghost workers within various departments but also look into projects that do not yield results. Finance Minister Enoch Godongwana announced the allocation during his Budget speech on Wednesday. He said going forward, underperforming programmes will be closed as the 2026 Medium Term Expenditure Framework (MTEF) budget process undergoes redesign. New reforms will target infrastructure planning and implementation across provinces and municipalities, the minister explained. "A data-driven approach to detecting payroll irregularities will replace the more costly method of using censuses.
The Citizen
22-05-2025
- Business
- The Citizen
Budget 3.0: VAT hike scrapped, fuel levy rises
Finance Minister Enoch Godongwana yesterday tabled the long-delayed 2025 revised budget, successfully bridging a R75b revenue shortfall without the politically unpopular proposal to increase VAT. Instead, he turned to alternative revenue sources — raising fuel levies and allocating billions to enhance tax collection — to meet the country's infrastructure and social spending needs while stabilising government debt. The Witness reports that to recover the anticipated revenue, the revised budget introduces increases to fuel levies and scraps earlier plans to expand the list of zero-rated food items. 'It means from June 4 this year, the general fuel levy will increase by 16 cents per litre for petrol, and by 15 cents per litre for diesel,' Godongwana said. Additional revenue will also be generated through SARS's improved collection systems. 'We have allocated an additional R7.5b over the Medium Term Expenditure Framework to increase the effectiveness of the SARS in collecting more revenue. 'Part of this allocation will be used to increase collections from debts owed to the fiscus. 'SARS has indicated that this could raise between R20b and R50b in additional revenue per year,' Godongwana said. The R6.6t budget tabled yesterday maintains its focus on social and infrastructure investment, allocating R1t for public infrastructure and R1t to education — in part to hire more teachers. Health has been allocated R845b. 'This budget will be increased by R20.8b over three years to employ 800 post-community service doctors, cover essential goods and services, and reduce accruals,' he said. The old-age grant was raised by R120 to R2 310 a month, with a further R10 increase set for October. The R370 monthly grant for unemployed people has been extended until March, but will undergo review. Government is actively exploring various options to better integrate this grant with employment opportunities. 'This includes considering a job-seeker allowance and other measures, as part of the review of Active Labour Market Programmes. Our goal is to not only provide immediate relief,' he said. Godongwana delivered the budget against the backdrop of growing concern over government debt, now at R5.6t. While he said debt levels were being stabilised, he acknowledged the rising cost of servicing debt. 'Debt service costs remain high, amounting to more than R1.3t over the next three years. 'Put differently, this means in 2025/26 alone we are spending around R1.2b per day to service our debt. 'We must maintain our efforts to reverse this trend …,' he said. Breaking news at your fingertips… Follow Caxton Network News on Facebook and join our WhatsApp channel. Nuus wat saakmaak. Volg Caxton Netwerk-nuus op Facebook en sluit aan by ons WhatsApp-kanaal. Read original story on At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
The Citizen
21-05-2025
- Business
- The Citizen
Sensible or underwhelming? Economists react to Godongwana's Budget 3.0
After the minister tried to push though VAT increases in his first two budget attempts, Budget 3.0 will still affect citizens' pockets. It was indeed third time lucky for Minister of Finance Enoch Godongwana when he delivered Budget 3.0 in parliament on Wednesday afternoon with the blessing of all the parties in the government of national unity. Frank Blackmore, lead economist at KPMG, says probably the most impressive thing about Budget 3.0 was that we now have a budget at all, although the contents were a bit underwhelming. 'There were many questions about what we are going to do with the R75 billion deficit over the medium-term period with no VAT increase. That was answered by this budget in the form of: some increases in the fuel levy of 15-16 cents per litre; an increase in borrowing with debt going up to 77.4% of gross domestic product (GDP), 1.2% more than in Budget 2.0; no expansion of the zero-rated food basket; reduced expenditure over the Medium Term Expenditure Framework (MTEF) period; the budgets of frontline services such as health and education growing, but by less than the previous budgetary amounts; some additional investment will go to Sars to switch those assets in order to collect more revenue. ALSO READ: Budget 3.0: not austerity budget, but a redistributive budget Not much thought about issues confronting SA Blackmore says it seemed that the budget was focused on these points without dealing with the issues confronting South Africa at this point. 'There were reductions in a lot of areas that were obviously necessary due to lower revenues, except for the public sector wage bill and debt deficit which are increasing.' He says the negatives in Budget 3.0 are: the increased debt and deficit taking more resources away from frontline services and economic growth initiatives, such as the social wage the reduction in the growth of non-interest expenditure no real increase in spending to grow the economy a mention that new tax proposals will come in for 2026 to cover an additional R20 billion gap for the full cost for that period. He did not find much on the positive side but says the public private partnerships and continuing structural reforms, as well as Operation Vulindlela Phase 2 are positive, but are nowhere near large enough to make a meaningful difference at this point to the growth outlook. ALSO READ: Godongwana cuts government spending to offset VAT shortfall Budget 3.0 a more realistic picture of SA's macroeconomic outlook Jee-A van der Linde, senior economist at Oxford Economics Africa, says Treasury's downwardly revised GDP growth projections and higher debt-to-GDP ratios paint a more realistic picture of South Africa's macroeconomic outlook. He says it is a positive takeaway that gross loan debt projections have not increased since March and Treasury still expects debt levels to stabilise, although at a higher level. Gross loan debt is expected to increase from R5.69 trillion in 2024/25 to R6.82 trillion in 2027/28. 'Meanwhile, debt-service cost projections were lowered by R1.8 billion over the MTEF period compared to the March 2025 Budget. South Africa's debt service costs remain alarmingly high at R1.3 trillion over the MTEF and we expect it to continue rising rapidly over the forecast period. 'South Africa's deteriorating debt-to-GDP ratio remains a concern and we continue to maintain that gross government debt will reach 80% of GDP in the near term. The sustainability of South Africa's fiscal outlook hinges on economic growth accelerating in the near term, as fiscal consolidation will prove challenging amid elevated spending pressures.' Was it third time lucky for Godongwana? Van der Linde says Budget 3.0 is more sensible and depicts a stark picture of South Africa's finances. 'Markets will welcome Treasury's commitment to fiscal consolidation. 'While not of its own making, Treasury's credibility has been unduly dented as a result of the budget wrangling. Political parties have been climbing over each other trying to claim credit for Treasury reversing course on the tax proposals that scuppered the first and second budget attempts.' ALSO READ: Budget 3.0: Opposition parties clash over impact on poor Very high execution risk Patrick Buthelezi, economist at Sanlam Investments, says the execution risk for the budget remains very high as many spending pressures require funding, such as closing the gap created by a freeze on PEPFAR support, political party funding leading up to the local government elections and national social dialogue. 'Given the projected economic growth outlook, the pressure on the fiscus can be expected to continue. The finance minister hinted that revenue-raising measures might be introduced in the 2026 budget. The GNU needs to reach consensus on viable revenue-raising proposals, including expenditure cuts.' Tertia Jacobs, treasury economist and fixed income specialist at Investec, says for her a key takeaway is that the GNU and Treasury continue to stick to fiscal consolidation. 'Any new increases in spending must be financed by higher tax increases and the new spending increases are allocated between infrastructure and frontline services as well as Sars getting a bit more money because they will become more important in widening the tax base in coming years. 'All in all, the budget is probably as good as we can get in the context of sluggish growth, but these are indications that the GNU and the ANC are willing to work together. ALSO READ: Budget 3.0: Alcohol and cigarette prices will increase — here's by how much Commitment to stabilising government debt Dr Elna Moolman, head of South Africa macroeconomic research at the Standard Bank Group, says in line with their long-standing expectation, all three budgets this year remained committed to stabilising government's debt-GDP ratio. 'The negative revenue impact of backtracking on the VAT increases as well as the weaker economic growth trajectory is counteracted, as we expected, by a combination of revenue and spending adjustments. 'The confirmation of government's commitment to fiscal consolidation, with the debt-GDP ratio peaking this year and bond issuance kept unchanged, should provide some reassurance to financial markets, as we expected. 'The macroeconomic policy reviews and fiscal reforms, alongside ongoing traction with Operation Vulindlela's growth-supportive reforms, also underpin likely fiscal and growth improvements in the medium term. 'However, entrenched investor concerns about adverse fiscal and growth risks will not be negated and notwithstanding the imminent peak in the debt-GDP ratio and unchanged nominal debt trajectory, investors will emphasise yet another increase in the debt-GDP trajectory that will limit the potential positive financial market impact from any positive fiscal developments.'
