Poor benefit from SA budget

Post-Apartheid, poverty remains a major social issue

By Jane Standley in Johannesburg

South African Finance Minister Trevor Manuel has announced increased spending on social welfare and crime fighting in the country's budget for the fiscal year 2001-2.

Mr Manuel told parliament that the government would have more money in its coffers - some of it from privatisation schemes - but that this would largely go to reducing the debt burden inherited from the apartheid era.

We can now embrace a more confident and expansionary vision

Trevor Manuel

In his previous budget, Trevor Manuel had to balance the need to keep international investors' confidence up by showing strong fiscal discipline while limiting money spent on addressing poverty.

But this time, more money is to go to the poor. Mr Manuel said this was the sweet fruit of liberty, the reward for the economic pain of their past few years.

He announced tax cuts for low and middle-income earners, while only modestly easing foreign exchange controls.

Aids prevention boost

The money is to be spent on social services, fighting widespread violent crime and on educating South Africans against Aids - the country has the fastest growing infection rate in the world.

South Africa is facing an Aids catastrophe

Nearly 2,000 people become HIV positive every day, and the impact on the economy is projected to be catastrophic.

But in the controversial area of Aids prevention medication, the finance minister only announced funds for two hospitals in each province to be supplied with drugs which reduce mother-to-child transmission of the virus.

More investment

Job creation schemes got more of a boost, as did projects to increase electrification and the road system.

Steps to relax exchange controls were more limited, although the budget did contain other measures designed to encourage foreign direct investment in South Africa, which has fallen dramatically.

But campaigners for the poor are likely to be angered by another announcement - that over $40m is to be spent on a private long-range jet for the South African president, Thabo Mbeki.