Government misses tax collection target

The government is R13-billion out of pocket, having collected only R729-billion in tax this year instead of the R742-billion it expected.

Finance Minister Pravin Gordhan told a press briefing in parliament today that with expected government spending pegged at R1-trillion next year, he aimed to spend the next three years moderating spending growth in a bid to bring down South Africa's debt repayments.

Whether this will mean tax hikes to fund the government’s planned National Health Insurance plan remains to be seen. Gordhan said the NHI will get about R500-million to launch 10 test sites in April next year, and that plans for a new tax to fund the scheme had still not been decided.

The 10 NHI pilot projects would test solutions to the problems of “weak hospital management, inadequate infrastructure and a shortage of skilled health workers”, he said.

The pilot projects will include new NHI-funded general practitioners.

The government will also increase its spending on education by 6.7% a year, reaching R231.7-billion by 2014-15, he said.

Part of the money will be spent on expanding Grade R to schools that do not offer the preparatory year and improving school buildings.

Over the next three years, R39-billion will be spent on constructing new hospitals and other health facilities, while R32-billion will be spent on building schools.

He revealed that the government underspent by R3.8-billion last year, and that R200-million of this had been rolled over to improve health facilities.

The budget for Human Settlements has been increased by R247-million this year, with the bulk of the money going to provide services for families living in informal settlements.

Gordhan also announced that from next year, poor rural municipalities would get a greater share of the budget to subsidise basic services.