Page 41 - Demo

Overview of the Provincial Revenue and Expenditure (OPRE %u2013 2025/26)20Despite strong buoyancy in tax collections, prolonged periods of low economic growth have led to significant underperformances of annual revenue targets. Compared to the 2024 Budget projections, the gross tax revenue outturn for 2024/25 is estimated to be R7.8 billion lower than initially targeted in the 2024 Budget. Over the medium-term government%u2019s fiscal policy and fiscal strategy will remain cautiously expansionary, prioritising fiscal sustainability and macroeconomic stability, supporting economic growth through infrastructure investment and rolling out sector reforms whilst protecting expenditure on vital social programmes in education, health, social protection and community development. Furthermore, National Treasury has set out flexible nominal fiscal targets for the short-to-medium term which entail stabilising gross government debt and budget deficits at 77.4 per cent and 4.8 per cent of GDP in 2025/26, respectively. The envisaged debt-stabilisation will be attained through generating primary surpluses driven in part by marginal increases in general fuel levies and excise duties, expenditure efficiencies and fiscal consolidation measures across government programmes and departments. The national government has proposed R18 billion in additional tax revenue measures for 2025/26 and R20 billion will be proposed in the 2026 Budget.Gross Fixed Capital Formation: Total fixed investment is estimated to have declined by -3.6 per cent in 2024 driven in part by declines in private investments which account for about70 percent of total gross capital formation for the country. The declines in private investmenthave been partially offset by increases in capital outlays by general government andpublic cooperations. Higher capital expenditures by the general government reflected theramping up construction works for water and roads infrastructure, government officebuildings, whilst for public corporations%u2019 capital expenditure for 2024 were mainly directed atupgrading the national road network, ports and rail logistics capacity and ICT equipmentoutlays.Table 1.9: Consolidated fiscal framework 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 R billion/percentage of GDP OutcomeRevisedestimate Medium-term estimatesRevenue 1 754. 1 900. 1 948. 2 040.2 2 200. 2 354. 2 503.27.7% 28.1% 27.5% 27.5% 28.0% 28.2% 28.2% Expenditure 2 047. 2 145. 2 259. 2 397.8 2 578. 2 674. 2 807.32.4% 31.7% 31.9% 32.4% 32.8% 32.0% 31.6% Non-interest expenditure 1 771 3 1 829 7 1 896 0 2 003.6 2 143 8 2 218 3 2 319 928.0% 27.1% 26.7% 27.1% 27.2% 26.6% 26.1% Budget balance -292.6 -244.6 -311.6 -357.6 -377.9 -320.2 -304.3-4.6% -3.6% -4.4% -4.8% -4.8% -3.8% -3.4%Source: National Treasury; data extracted from the updated tables of 2025 Budget Review