RATE IT | Booze, grants and solar panels: How do you feel about these 6 budget speech announcements?

South Africa's power and cost of living crises took centre stage during finance minister Enoch Godongwana's budget speech on Wednesday, with several measures announced that will impact on the everyday lives of South Africans.

Godongwana presented the budget to the National Assembly in the Cape Town City Hall, just weeks after President Cyril Ramaphosa announced the government's plans to tackle the energy crisis and socioeconomic challenges in his state of the nation address.

Godongwana expanded on some of these interventions, while also announcing changes to social grants and sin taxes.

Here are six announcements made by the minister, tell us what you think of them:

MORE FOR BOOZE AND SMOKES

Godongwana announced an increase in sin taxes or excise duties by 4.9% for the 2023/2024 financial year.

A 340ml can of beer is now 10c more, with a 750ml bottle of unfortified wine now up by 18c. A 340ml can of cider and other alcoholic fruit beverages are also up by 10c more.

A packet of 20 cigarettes will go up by 98c and a packet of 20 heated tobacco sticks by 73c. Cigars went up R5.47 per 23g.

INCREASES IN SOCIAL GRANTS, BUT NOT THE R350 GRANT

The finance minister announced increases in social grants from April 1.

The old age and disability grants will increase by R90 and a further R10 on October 1, for a total grant of R2,090.

The child support grant will rise by R30 from R480 to R510 on October 1, while the foster care grant increases from R1,070 to R1,130 over the same period.

Godongwana said R66bn has been allocated to social development in the budget, with R36bn earmarked to fund the R350 social relief of distress (SRD) grant until March 2024.

FIGHTING THE FUEL AND FOOD PRICE SURGE

After surging fuel prices led to the suspension of the fuel levy for several months last year, some analysts had hoped the government would review the levies that made up the fuel price going forward.

Godongwana provided some relief on the fuel front in his speech, announcing that government would not increase the fuel and Road Accident Fund (RAF) levies for this year.

Producers of foodstuffs will also be added to other manufacturers already enjoying refunds on the RAF levy used for diesel.

“To ease the impact of the electricity crisis on food prices, the refund on the Road Accident Fund levy for diesel used in the manufacturing process, such as for generators, will be extended to manufacturers of foodstuffs. This takes effect from April 1 for two years,” he said.

IT NOW PAYS TO GET SOLAR 

Those who have invested in rooftop solar panels and other renewable energy sources will get a tax break from next month. The government will also guarantee solar-related loans for small and medium enterprises.

Godongwana said households could claim up to R15,000 in tax rebates starting from March 1 for installation costs of photovoltaic rooftop solar panels.

“Individuals who install rooftop solar panels from March 1 will be able to claim a rebate of 25% of the cost of the panels, up to a maximum of R15,000. This can be used to reduce their tax liability in the 2023/24 tax year. This incentive will be available for one year.”

Changes to the Bounce Back Loan Guarantee Scheme are also proposed to incentivise renewable energy, rooftop solar, and address energy-related constraints experienced by small and medium enterprises.

The government will guarantee solar-related loans for small and medium enterprises on a 20% first-loss basis,” Godongwana said.

CHANGES TO TAX BRACKETS, MEDICAL AID CREDITS AND RETIREMENT TAX

Godongwana announced personal income tax brackets will be fully adjusted for inflation, which will increase the tax-free threshold from R91,250 to R95,750.

Medical tax credits will also be increased to R364 per month for the first two members, and to R246 per month for additional members.

He said the tax-free amount that can be withdrawn at retirement will increase to R550,000, and “the retirement tax tables for lump sums withdrawn before retirement, and for lump sums withdrawn at retirement, will be adjusted upwards by 10%".

“The brackets of the transfer duty table will also be increased by 10%, allowing properties below R1.1m to avoid any transfer duty payments”.

ESKOM'S DEBT

Much of the budget focused on load-shedding and the power crisis, with the state of Eskom coming into sharp focus.

Godongwana said while the government would absorb more than half of Eskom’s debt, it would not take over the R56.3bn owed by municipalities to Eskom unless there is a clear plan on how to prevent them from defaulting in future.

He said wiping out some of the debt would allow Eskom to get to work fixing the energy crisis.

“We are doing this for two reasons: First, doing so will ease pressure on the company’s balance sheet, enabling it to invest in transmission and distribution infrastructure. It will also allow Eskom to conduct the maintenance required to improve the availability of electricity.

“Second, R337bn of Eskom’s debt is already government guaranteed. Explicitly taking on this debt, will reduce fiscal risk and enhance long-term fiscal sustainability.”

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