1995 - National Treasury

PREFACE
The first Budget of the Government of f lational Unity was presented on 22 June 1994, barely two
months after the first non-racial democratic election in South Africa. Most of the planning and
policy choices, however, were effected under the previous constitutional dispensation. The
1995/96 Budget is the first Budget that has been fully developed under the new dispensation.
Expectations are high about this Budget. Better living conditions are expected by millions of
people for themselves and their children. Domestic and foreign investors are looking for an
attractive and stable policy environment to underpin confidence. More than ever before, there
appears to be an urge for expanded and detailed information on the Budget and the processes
that lead to budgetary and fiscal decisions, as well as an account of the progress which the
Government has made in achieving its goals of reconstruction and development. The Budget
Speech of the Minister of Finance is therefore supplemented with reliable and accessible
information in the form of this Budget Review. The task of preparing this resource was especially
complicated by the huge changes in the institutional and financial structure of government at
national and provincial level during the past year, changes not yet completed. Careful attention
has, therefore, been given to a systematic explanation of all the changes and their effects on the
public finances, as well as the development and presentation of comparable data bases for
purposes of analysis and consistent policy-making.
The changes in the constitutional field and in government finances have brought about major
reforms in financial decision-making and deeper public interest in the fiscal process. The Introduction
to this Review, in particular, has been drafted with a view to contributing to a better
understanding of the role of public finance in the South African economy.
Chapter 1 provides a brief review of the current and expected economic conditions in South
Africa, as a reference point for the discussion of a large variety of fiscal and financial issues
(chapter 2), the assessment of the outcome of the 1994/95 Budget (chapter 3) and as basis for
the presentation of the 1995/96 Budget. The latter covers three chapters. Chapter 4 gives an
exposition of the expenditure that can be afforded and the allocations to the various budgetary
votes, taking account of the fiscal policy goals stated in chapter 2. Chapter 5 contains the
Government's tax proposals, while the loan financing programme for the new financial year is
dealt with in the last chapter. Throughout the Review there are references to the detailed
statistical tables included as annexures. In many respects these contain the most complete and
up to date information on public finance in South Africa.
Many colleagues in the Departments of Finance and State Expenditure, but also in other government
departments and the South African Reserve Bank, spent long hours to complete an
enormous task in a very limited time. I wish to extend my sincere thanks and gratitude to each
of them.
ESTIAN CALITZ \
DIRECTOR GENERAL OF FINANCE
CAPE TOWN
15 MARCH 1995