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Smokers, drinkers are biggest losers

By unknown | Feb 22, 2007 | COMMENTS [ 0 ]

Reports by Waghied Misbach

Reports by Waghied Misbach

Finance Minister Trevor Manuel yesterday delivered a pro-poor budget that included increases in social grants, better pay for teachers and health workers, and more and better paid police officers.

Manuel also announced a social insurance tax, likely to be implemented by 2010, that will ensure lower income earners can provide for retirement, death or disability.

This will not be a replacement for grants, but added on top of it.

Also announced is a new wage subsidy for low-income earners and further tax cuts amounting to R8,4billion for low and middle income earners.

The state old age, disability and care dependency grants will increase by R50 to a maximum of R870 a month. Child support grants will be increased by R10 to R200 a month and foster care grants rise to R620 a month from R590. The grant for war veterans will increase from R838 a month to R890 a month.

Over the next three years a further R8,1billion will be spent to hire more teachers, teaching assistants, support staff in schools and districts and better pay for teachers of the 11million children in school.

A further R700million will be set aside for bursaries for young people who want to study education. This will benefit about 13000 teachers over three years.

Money has also been set aside to implement plans for no-fee schools and for the provision of more classrooms, and for water and sanitation.

A further R850million will be spent on adult basic education; R2,2billion for universities to produce more science, engineering and technology graduates; and a total of R600million for student bursaries in the further education and training sector.

To better the pay of health workers and hire more staff, a total of R5,3billion has been set aside. The number of health workers will be increased by 30000 over the next five years, said Manuel.

For HIV and Aids programmes, a further R17billion has been allocated to reach 250000 Aids-infected people at 272 sites. This target will be reached in the "next few months".

Manuel said spending on HIV and Aids across the health, education and social development departments would increase to more than R5billion by 2009-10.

Manuel announced that a further R2,4billion will be added to the R33billion budget of the police for more staff and to invest in technology and forensic equipment. By 2010 there will be an estimated 190000 police officers on South Africa's streets, up from the current 152000.

Another R1,5billion will be spent over the next three years to improve court capacity, reduce backlogs and modernise the administration of justice.

Manuel said that an important factor in crime was the "relentless pursuit of individual enrichment at the expense of broader development and progress of society.

"We cannot escape the fact that the culture of greed plays a role in driving crime," said Manuel.

"Only a stronger sense of society, of community, of family, a sense of responsibility to each other, can heal the fractures that give rise to crime."

Manuel announced that there would be tax relief of R8,4billion for lower to middle income earners which increases the level below which no income tax is levied for people under the age of 65 to R43 000.

He appealed to taxpayers to use the relief to "first settle their debts or save, rather than for consumption".

Manuel said backed by a growing economy and an unprecedented budget surplus of R5billion for 2006-07 - which meant government had more income than it spent - South Africa was in a better position than ever to save, build better infrastructure and provide better social and health services to citizens

l The biggest losers in yesterday's budget are once again smokers and drinkers who continue to be hit by ever increasing sin taxes.

l Tax on a packet of 20 cigarettes goes up by 60 cents.

l Tax on a 340ml can of beer goes up by 5 cents.

l Tax on a 750ml bottle of wine is up by 10 cents;

l Tax on a 750ml bottle of spirits goes up by R1,88.

These increases amount to R1,5billion in revenue for the South African Revenue Services.


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