Finance Minister Pravin Gordhan's proposed 2012/13 Budget exceeds R1-trillion - R1.06-trillion - for the first time ever, with the bulk of spending, R615.7-billion, earmarked for social services.

"We remain steadfast in addressing the challenges of creating jobs, reducing poverty, building infrastructure and expanding our economy," he told MPs in the National Assembly on Wednesday.

South Africa's finances were in good health. A budget deficit of 4.6 percent of GDP was projected in 2012/13.

It was planned to reduce the deficit to three percent of GDP in 2014/15, and public debt would stabilise at about 38 percent of GDP, he said.

An expansion in infrastructure investment was one of the central priorities of the 2012 budget.

Special emphasis was given to improving competitiveness in industry, investment in technology, encouragement of enterprise development, and support for agriculture.

Total spending would reach R1.1-trillion next year, representing some 32 percent of GDP.

Education, health and social assistance would remain the largest categories of spending, sustaining and expanding the social wage over the MTEF period ahead.

"Investment in people is at the centre of our growth and development strategy," Gordhan said.

The budget continued to support job creation, with a particular focus on unemployed youth.

It also provided for personal income tax relief of R9.5-billion, with further measures to increase tax compliance.

Measures were also proposed to invigorate household savings.

"We will strengthen financial management in the public sector, pursue value for money with the greatest possible vigour, and ensure that taxpayers' money is well used," he said.

Fraud and corruption would be combated through changes to procurement policies and practices, and tough enforcement of the law.

In terms of the new budget, the biggest slice of the social services cake goes to education (R207.3-billion), followed by social protection (R157.9-billion), health (R121.9-billion), and housing and community amenities (R120.1-billion).

For the rest, economic affairs is allocated R145-billion; general public services R141.4-billion, which includes state debt costs of R89.4-billion; defence gets R41.6-billion; and, public order and safety R98-billion.

Revenue is expected to be about R904.8-billion.

Gordhan forecast economic growth will slow to 2.7 percent in the new financial year - from 3.1 percent in 2011 - but increase to 4.2 percent in 2014.

National government's net loan debt was set to reach R1.5-trillion in 2014/15.

Gordhan's other tax proposals for 2012/13 include a tax incentive to encourage savings, tax relief for micro and small businesses, a 28 cents a litre increase in the general fuel levies, and the usual "sin tax" increases on cigarettes and alcohol.

A packet of 20 cigarettes will cost 58 cents more, a litre of wine 18 cents, a can of beer 9 cents, and a bottle of spirits R6 more.

The electricity levy increases by one cent a kWh.

The monthly state old age pension and the disability and care dependency grants will rise, by R60 a month, to R1200, and R1220 for pensioners over 70.

Foster care grants will go up by R30, to R770, and the child support grant will increase to R280.

These would be reassessed if inflation continued to rise.

Consumer price inflation is expected to average 6.2 percent in 2012/12, dropping to 5.1 in 2014.

Additional spending plans over the next three years include R9.5-billion for the economic competitiveness and support package, including R2.3-billion for dedicated special economic zones.

Some R6.2-billion goes to job creation, R3-billion more for equalisation of subsidies to no-fee schools and expansion of access to grade R, R1-billion for national health insurance pilot projects, and R1.4-billion more for early childhood development.

Around R4-billion more goes for passenger rail coaches, R1-billion for rail signalling and depot infrastructure, R4.7-billion for solar water geysers, R1.8-billion for municipal water infrastructure, and R3.9-billion more for upgrading informal settlements.