enoch godongwana anc minister ramaphosa

Finance Minister Enoch Godongwana delivered the 2022 Budget Speech in February – Image: GCIS/ Flickr

Budget Speech 2022: The unexpected announcements from the address

An indepth look at some of the unexpected announcements from Finance Minister Enoch Godongwana’s 2022 Budget Speech.

enoch godongwana anc minister ramaphosa

Finance Minister Enoch Godongwana delivered the 2022 Budget Speech in February – Image: GCIS/ Flickr

Finance Minister Enoch Godongwana delivered the 2022 Budget Speech in Parliament on Wednesday afternoon. A follow-up to President Cyril Ramaphosa’s State of the Nation Address earlier this month and detailed how the government intends to fund his proposals. 

Budget Speech
Finance Minister Enoch Godongwana delivered the 2022 Budget Speech on Wednesday. Image: GCIS/ Flickr

Changes to social relief grants announced during Budget Speech

Godongwana confirmed during the Budget Speech that the Department of Social Development is set to receive the largest allocation with over R58 billion allocated to it.

“Over the next three years, we allocate R3.33 trillion to the social wage to support vulnerable and low-income households. This is approximately 60 percent of non interest spending.”

Budget Speech

Furthermore, the Minister announced the following changes to grants:

  •  • A new extended child support grant for double orphans. This is to encourage the care of orphans within families rather than foster care
  • • To provide for inflationary increases to permanent social grants. 
  • • For the 2022/23 fiscal year, the old age, war veterans, disability and care dependency grants, will increase by R90 in April and a further R10 in October. The foster care and child support grants will increase by a once off R20 in April; 
  • • Thirdly, R44 billion is allocated for a 12-month extension of the R350 social relief of distress (SRD) grant. 

Eskom to continue receiving state bailouts

Despite Ramaphosa indicating a lack of dependence on Eskom during his address, the Finance Minister revealed during his Budget Speech that the embattled state-owned entity will continue to receive state bailouts.

“To date, Eskom has been provided with R136 billion to pay off its debt with a furtherR88 billion until 2025/26. We acknowledge, however, that Eskom is faced with a large amount of debt that remains a challenge to service without assistance.”

The minister commented Eskom must cut costs, sell assets and implement “operational improvements” to enhance the reliability of electricity supply.

No increase in fuel levy

With fuel prices continuously rising in South Africa, the Minister revealed that the state has opted out of increasing the pressure on citizens.

“In 2021, the inland petrol price breached R20 per litre. The higher prices have put pressure on the cost of transport, food and other goods and services. To provide some relief to households, no increases will be made to the general fuel levy on petrol and diesel for 2022/23. This will provide tax relief of R3.5 billion to South Africans. There will also be no increase in the Road Accident Fund levy.”

Budget Speech

New tax on beer powders announced

In what is certainly an unexpected move, the Minister announced that a new tax is set to be introduced on beer powders.

Furthermore, excise duties on alcohol and tobacco is set to rise:

  • • A 340ml can of beer or cider will cost 11c more;
  • • A 750ml bottle of wine will be 17c more expensive;
  • • A bottle of sparkling wine will cost an additional 76c;
  • • And a bottle of spirits will be R4.83 more expensive;
  • • A packet of cigarettes will cost an additional R1.03;
  • • 25 grams of piped tobacco will cost an extra 37c; and
  • • A 23 gram cigar will be R6.77 more expensive.

“Government also proposes to introduce a new tax on vaping products of at least R2.90 per millilitre from 1 January 2023.”

Budget Speech

In addition to this, an increase on the cost of sugar was announced with the health promotion levy set to increase to 2.31 cents per gram. This comes after three years of no changes.