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S. African Finance Minister Unveils $56 Billion Budget - 2004-02-18


The South African finance minister has unveiled a $56 billion election-year budget, heavy on programs to create jobs and combat the HIV/AIDS epidemic.

South Africa's finance minister, Trevor Manuel, unveiled the government's last budget before the general election in less than two months, and it reflects the voters' most pressing concerns.

In presenting the budget to parliament, he said the country has had the longest period of sustained economic expansion in 50 years, has diversified its trade system, and integrated itself into the global economy. But he acknowledged that more work is required. "In reflecting on the challenges that lie ahead, the cabinet has had to confront difficult choices. Our task, honorable members, simply put, is to accelerate the pace of growth and job creation, and extend the scope of development and empowerment," he said.

The 2004 budget includes $2.8 billion for an expanded public works program, which aims to create a million jobs during the next five years. South Africa's unemployment rate has climbed to 31 percent and continues to rise, presenting the government with one of its most serious challenges.

The budget also includes 61 million worth of tax cuts targeting low-income families and the elderly. That came as a surprise to many analysts who had not expected any tax relief in a year in which corporate tax revenues have dropped sharply.

Some of the revenue lost from the income tax cut would be recouped by raising so-called sin taxes on alcohol and tobacco.

The government's budget for next fiscal year also proposes significant increases in spending on HIV and AIDS, largely to pay for the government's program to provide free AIDS medicines to anyone who needs them. "In health, a further 2.1 billion rand [about $320 million] is allocated for the comprehensive response to HIV and AIDS, including the provision for anti-retroviral treatment programs by provinces through a conditional grant," he said.

The anti-retroviral drug plan was announced last year, but its implementation has been delayed by administrative problems.

According to U.N. figures, South Africa has more HIV-positive people than any other country. More than five million of South Africa's 44 million people are infected.

The 2004 budget also reflects South Africa's desire to emphasize its commitment to the rest of the African continent. It includes $169 million to support peacekeeping missions elsewhere in Africa, as well as an incentive to encourage investment in African companies listed on the Johannesburg stock exchange.

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