Pushing annual spending above R1-trillion for the first time, he still managed to cut the deficit forecast to 4.6% of GDP in the new financial year, find R9.5-billion to give back to taxpayers and billions more for schools, universities and hospitals.

Gordhan said South Africa could not rely on a European economic recovery to drive domestic growth and would have to fuel its own economy with continued infrastructure investment.

Urging the private sector to "stop the finger-pointing" he said investors should put the hundreds of millions in unused cash to work.

He conceded that mixed messages from the government might have deterred investors, but asked for a joint public and private commitment to grow the economy.

"We have to do more with less," he said.

Gordhan did not announce new job-creation initiatives, but said those under way would continue. There would be more talks about the youth wage subsidy proposed last year.

Gordhan announced the usual round of tax increases on cigarettes and alcohol, added 28c a litre to the price of petrol through increased fuel and road accident levies and increased the price of electricity by 1c/kWh as a penalty for the use of non-renewable fuels.

Tax changes focused on easing the burden on low-income earners with more taken from the rich.

He dropped plans to tax gambling winnings over R25000 and added 1% to the incomes of casinos and the lottery instead.

Tax concessions to compensate for the effect of inflation went largely to people earning less than R600000 a year and an increase in capital gains will target multimillion-rand home sales while exempting profits less than R2-million.

Savers who invest in unit trusts have a new 15% dividend tax from April but will get some of that back from the abolition of the 10% secondary tax on companies. Officials said this change also was biased in favour of lower earners.

But the bulk of his proposals affected the government's build programme and ways to make it more honest and efficient.

"We welcomed the fact that overall this is not a budget of despair and contraction, but rather a continued commitment to significant economic and developmental spending," SACP spokesman Malesela Maleka said in a statement.

"In particular, we welcome the strong budgetary support for the massive infrastructure ... programme announced in the president's State of the Nation address."

Business Unity South Africa called the budget "credible, broadly balanced and confidence-building".

Busa welcomed the infrastructure allocation and the announcement of 43 major infrastructure projects that will cost R3.2-trillion with R845-billion scheduled to be spent in the next three years.

Budget documents listed a total of 3204 projects that are being considered, planned, put to tender or worked on.

Gordhan said development had been held back by the inability of national, provincial and municipal departments to spend their capital budgets.

Only 68% of last year's allocation was spent, he said.

But he did increase the dedicated grant to provinces for school infrastructure from R700-million in the current year, which ends in March, to R2.3-billion next year and a total of R13-billion over the next three years. Much of this will go to eliminating mud schools in rural provinces including Limpopo and the Eastern Cape.

Among other announcements were:

• R1-billion over the next three years for the first phase of the National Health Insurance scheme, backed by R28-billion in capital investment in health. He said the scheme would need a further R6-billion in 2014-2015, which had not yet been allocated, but said it would be found;

• R1-billion to extend the internet backbone into every corner of South Africa;

• A new "Cities Support Programme" to improve infrastructure and public transport in the eight metros, which include Nelson Mandela Bay and Buffalo City in the Eastern Cape;

• An accelerated crackdown on tax evaders following the successful prosecution of 230 people and sentences totalling 370 years;

• An additional R850-million for university buildings, including residences; and

• An additional R968-million over the next three years for extended antiretroviral treatment for people with the HIV virus, R450-million to upgrade 30 nursing colleges, and R426-million for five teaching hospitals.