The 2006 Budget was presented by the Minister of Finance, Trevor Manuel, to Parliament on 15th February. As always, the budget speech was the nation's main opportunity to learn what the State's detailed plan is for acquiring and using financial and other resources over the next three years, but more specifically for the 2006/07 financial year. As far as the government's priorities for this period are concerned, the 2006 Budget did not bring any real surprises. Once again, there was substantial tax-relief for middle- and high-income earners and a modest increase in social spending for the poor. Mr Manuel said that this budget spreads to benefit everyone; it has a higher public spending aspect as it aims at giving life and meaning to the 'Age of Hope' that President Thabo Mbeki mentioned in his State of the Nation speech. According to the Minister, the 2006 budget prioritises the needs of the poor.
This briefing paper summarises the main points of the 2006 Budget and tries to see it through the eyes of the poor and the marginalised, such as Mr Nxumalo of Khayelitsha. Mr Nxumalo1 is 50 years old, unemployed and poor. Furthermore, he is taking care of two orphans who are 15 and 17 years old. Mr Nxumalo's family clearly heard the Minister of Finance saying in their mother tongue "Umnotho wakuleli ukhulile, ngakhoke asivuneni, inala ifikile!" ("This is the year of plenty, when all South Africans will reap the fruits of economic growth"). The truth of that statement is the ultimate test of the Budget.
'Mr Nxumalo' represents anyone who is poor, unemployed and marginalised, and who may gain or lose depending on government's revenue and expenditure policies.