Finance Minister Nhlanhla Nene’s mini (mid-term) budget speech on 21 October might have been filled with jargon you don’t understand, but what he said still affects you.
Minister Nene referred to a few government programmes, planned or implemented, that will have a huge impact on the economic growth of South Africa as a whole.
Counting Coins has compiled a list of 4 programmes mentioned in the mini budget that you really need to understand because they affect you:
1. The National Development Plan
The aim of the National Development Plan is to eradicate poverty and reduce economic equality among South Africans by 2030.
By using strategies like improving the quality of education to reduce unemployment and investing in public infrastructure to ensure economic and environmental sustainability, the National Development Plan ultimately aims to unite South Africans of all backgrounds, despite the many economic and social differences we face every day.
2. The Employment Tax Incentive (ETI)
The Employment Tax Incentive Act, also known as the Youth Wage Subsidy, encourages employers to hire young people by essentially making it cheaper for employers to employ them.
Should an employer hire a young person, they will be liable to pay less pay-as-you-earn tax (PAYE) on said employee’s earnings, without affecting the employee’s earnings. This is a win-win situation because it benefits the employer, who saves some money on taxes, while the young employees learn skills that will benefit them and the economy at large. The ETI forms part of the National Development Plan.
3. National Health Insurance
National Health Insurance will ensure that all South Africans have access to quality healthcare for free. While government will still assist unemployed citizens with their medical costs, people who are formally employed will be asked to make a small monthly contribution to the NHI Fund.
Through contracts with both public and private hospitals, private practices and specialists, the NHI Fund will deliver free health services to every South African and legal citizen of the country.
4. The Expanded Public Works Programme
Unemployment is one of the biggest challenges South Africa faces today, and the Expanded Public Works Programme tries to relieve the pressure in this regard by providing temporary work for the unemployed.
Implemented in 2004, the Expanded Public Works Programme ultimately aims to create a total of 6 million job opportunities by 2019, as set out in the National Development Plan.
It has been quite successful in this endeavour thus far, surpassing the set target of 1.04 million job opportunities to be created by the end of March 2015, creating work for 1.24 million South Africans.
Although the economic jargon used in budget speeches might cause you to zone out, it is important to take note of programmes and plans set out by government to improve the quality of life of all South Africans.
The responsible citizen has knowledge of what his or her tax money is used for and holds government accountable for the implementation of these plans, while also actively trying to play a role in the implementation of these programmes if it is at all possible to do so.