SA allocates billions to reduce recession impact

South Africa has allocated an extra R78 billion over the next three years to reduce the impact of its first recession in 17 years, the National Treasury said today.
President Jacob Zuma is under pressure from disgruntled citizens to deliver on April election promises and ease a series of violent protests against the state’s perceived inability to deliver basic sanitation and electricity services.
“The main budget makes available an additional R78 billion for allocation to new priorities or to respond to new pressures over the next three years,” the Treasury said in its Medium Term Budget Policy Statement tabled in parliament.
“There is public dissatisfaction with the poor quality of service delivery and high levels of wasteful expenditure and inefficiency in government,” it said.
South Africa will maintain its public infrastructure spending programme over the next three years, totalling R872 billion and seen as vital to counteract a deeper recession.
Capital expenditure at state-owned enterprises Eskom, Transnet and the National Roads Agency is expected to make up slightly more than half the total at R441 billion  between 2009 and 2012.
The Treasury said the fight against HIV and Aids is a key priority and treatment uptake will soon exceed more than 300 000 new entrants a year, with an estimated 900 000 people receiving antiretroviral treatment by March 2010.
“Government expenditure on HIV and Aids programmes has increased from R1.1 billion in 2005/06 to R4.4 billion in 2009/10,” the Treasury said.
South Africa has among the world’s heaviest HIV caseloads.
Government has allocated R4.1 billion to support newly settled farmers as part of a rural development programme aimed at raising rural income and increasing food production.
The state also plans an additional allocation for the elite Directorate for Priority Crime Investigation to increase the number of investigators to 2400 by 2012/13 from 350 currently.
However, the Treasury noted that funding some priorities would mean reducing spending elsewhere and tough decisions needed to be taken.
“For example, increasing budgets for labour-intensive public services could mean reducing expenditure elsewhere. Funding a wage subsidy might require higher taxes,” the Treasury said.