Digital migration has been allocated R620-million from this year’s budget.
Tabling the budget in Parliament yesterday, Finance Minister Pravin Gordhan said the funds will be surrendered to the National Revenue Fund by Sentech.
Over the medium term, several spending plans and tax measures are aimed at addressing structural economic challenges and promoting the stronger, more inclusive growth envisaged in the National Development Plan (NDP), Gordhan says.
The budget also made allowance for an infrastructure investment of R847-billion that will be spent over the next three years.
Infrastructure spending will see the first unit of the Medupi power station completed towards the end of this year, while a new rolling stock procurement programme from the Passenger Rail Agency of South Africa will get underway.
Spending on social infrastructure – which includes health, education and community facilities – will increase from R30-billion in 2012/13 to R43-billion in 2016/17.
Meanwhile, a programme to rehabilitate 35 dams has been completed, and work is in progress on the country’s five large water transfer schemes. In 2014/15, a total of R40-billion in infrastructure grants will be transferred to local governments for their water, sanitation, energy and environmental functions.
Gordhan says the private sector is also making an increasing contribution to infrastructure investment. Contracts for 47 renewable energy projects were concluded in 2012 and 2013, many of which are already under construction.
These will add 2 460 MW of power capacity, and investment of R70-billion. A further R45 billion in investment will be contracted this year.
Government’s development plans also focus on overcoming the spatial fragmentation of South Africa’s built environment, improved public transport and accelerated investment in human settlements.
An integrated city development grant has been introduced to strengthen long-term city planning and encourage private investment in urban development. It will amount to R814-million over the medium term.
Over the next three years, national government will allocate R105-billion to municipalities for free basic water, sanitation, electricity and refuse removal services.
Gordhan projects growth to increase from 2.7% this year, to 3.5% in 2016. Investment is forecast to increase by about 5% a year and the current account deficit will average 5.8% of GDP over the medium term, while consumer price inflation will return to levels within the target band between 2015 and 2016.
Potential domestic risks to the outlook include further delays to the introduction of new infrastructure, particularly additional electricity capacity, higher inflation due to the weakness of the rand, and protracted labour disputes which could depress consumer and business confidence.
The Minister also highlighted the importance of Africa in the global market.
Investment into Africa has reached R36 billion a year, in a range of industries. South Africa is the second largest developing country investor on the continent. In 2013, 29% of our exports were destined for Africa. In 2012, 12% of our dividends came from Africa, up from just 2% a decade earlier. Increasing these inflows will be crucial for closing the current account deficit. Foreign assets owned by South African firms are an important source of
income, and reduce our vulnerability to future domestic downturns. In addition, 18 large African firms now have debt and equity listings on the JSE.
He announced further steps to simplify trade and investment with Africa. The HoldCo regime for African and offshore operations will be extended to unlisted companies, and the limits for listed companies will be increased. This regime creates a simplified tax and foreign exchange framework for companies that trade with Africa.
Since South Africa is an important centre for financial services such as fund and asset management, Gordhan proposed new “Foreign Member Funds”, which will simplify the foreign exposure rules. These funds will support South Africa as a hub for African fund management and provide a domestically regulated channel for investors to obtain foreign exposure.
