L Brown: Western Cape Budget 2006/07

17 February 2006

Speaker,
Premier,
Members and
Distinguished guests

We have come a long way since 1994, the advent of our democracy. We have
reshaped our economy, the face of our country, our relations with the rest of
the world, established new links within our continent and made many
improvements in the lives of ordinary people. Most of these were covered by the
President in his State of the Nation Address and further elaborated on my
Minister Manuel on Wednesday. Few would disagree that we are increasingly
getting to grips with the fine-tuning and testing of our policies, living as we
do in the fish tank called Africa, where our every move is scrutinised and
analysed, all the more so in South Africa.

But even the most cynical analysts would concede that over the last decade
we are getting better at what we do. The numbers also speak for themselves. We
have started well and astounded our critics, domestically and abroad. Therefore
we can identify with the Ghanaian Kofi Awoonor, when he writes:
In our beginnings lies our journey's end.

So we are ready to engage the future and turn it to our advantage. As the
Western Cape Government, we have done the research and formulated our shared
growth and development plans, called iKapa Elihlumayo, in full recognition of
similar national initiatives and municipal Integrated Development Planning
(IDP). There is an old Ashanti proverb that says: “Only when you have crossed
the river can you say that the crocodile has a lump on his snout”.

After 12 years, we are on the other side of the river, with Budget 2006/07
as a manifestation and consolidation of all the intense work that precedes it,
starting with the Premier's "burning old grass" 2003 Budget Speech. Although we
have not as yet reached our end point, the Budget is tabled today in an
environment alive with the promise of 'accelerated shared economic growth', an
idea highlighted in the President's State of the Nation Address and developed
under the leadership of the Deputy President as the Accelerated and Shared
Growth Initiative for South Africa (Asgisa).

The road ahead is not going to be easy. As Sophocles tells us, “there is no
success without hardship”. Possibly the really difficult part of our
transformation - that of changing our economic and spatial landscape - is only
starting now in all earnest. Last Friday the Premier laid out his eight-point
battle plan to achieve shared growth here in the Western Cape. My task today is
to set forth the economic framework and resource allocation decisions which
provide the ammunition for that battle plan.

Accelerated and Shared Economic Growth

We know that higher levels of economic growth are critical to reducing
unemployment and poverty and to encouraging investment in South Africa's
economy. But up to now, growth has largely tended to benefit those already
well-off or well-positioned, while the poor did not share in the same benefits.
Government is now recognising that we cannot chase after higher growth alone,
or focus exclusively on pro-poor growth.

Nevertheless we need to take steps to make sure that the gains from higher
economic growth reach the poor and make concrete improvements in their daily
lives on an increasing scale. Shared growth is about a more prosperous and more
equal society. These ideas are at the core of the Western Cape's Budget
2006/07.

The Western Cape has certainly shared in the historic upswing phase of the
South African economy, with real gross domestic product (GDP) growth in the
region estimated at 5,3% for 2004/05. In the same fiscal year, total output in
the Western Cape reached nearly R186,3 billion or 16,0% of South Africa's
GDP.

Economic growth is set to maintain its high pace of 5,3% in 2005/06 and then
drop slightly to 4,7% in 2006/07. All in all, it would appear that our growth
upswing has taken both Eskom and our fuel suppliers by surprise. Perhaps this
is a belated indicator for the rest of our private sector colleagues to not
also run the risk of under investing. The Western Cape also compares positively
to the rest of the country in terms of the overall poverty rate. But this
aggregate view masks worrying trends in poverty pockets.

Unemployment further persists at unacceptably high levels, making job
creation and skills development fundamental themes which tie into all of the
iKapa Elihlumayo strategies. Furthermore, the gains and pains of economic
trends are not felt equally among us. The strengthening of the Rand exchange
rate has had a disproportionate impact on the region's industrial and
agricultural base. In line with national experience, manufacturing exports in
the region declined, whilst import competition (particularly from China and
India) picked up strongly.

The fact that the Western Cape economy was able to achieve the estimated
5,3% growth rate in 2004/05 in the face of these headwinds is testimony to the
strong economic performances of: the Construction; Retail and Wholesale;
Financial and Business services and Transport and Communication sectors.
Overall, the short-term outlook for the Western Cape economy remains upbeat.
This is despite external risks, particularly in relation to the exchange rate
volatility and crude oil price pressures.

Internally, we face socio economic challenges which may constrain our
regional growth if not properly addressed. These include: skewed income
distribution; lack of skills to support the regional economy; high school drop
out rate; housing and infrastructure requirements; burden of disease;
in-migration; increasing road fatalities and drug-related crime rate. Therefore
it is these challenges which the iKapa Elihlumayo strategies are specifically
designed to tackle head-on.

iKapa Elihlumayo Development Strategy

Since the launch of iKapa Elihlumayo three years ago, we have done our
homework, so that today we have a better grip on the problems facing the
Province. Led by the Department of the Premier, by the end of this year, all
the various strategies, together with the key elements of municipal IDPs, will
be welded together into a single battle plan, the Provincial Growth and
Development Strategy (PGDS). The PGDS would exist as a living document, as our
environment and challenges are not static. The English poet Lord Alfred
Tennyson wrote:

Come, my friends,
'Tis not too late to seek a newer world?
for our purpose holds
To sail beyond the sunset?
Though much is taken, much abides and though
We are not now that strength which in old days
Moved earth and heaven; that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield. “

As we embark upon the implementation of these development strategies in the
upcoming year, we do so having looked at these problems seriously,
knowledgeable of the obstacles before us and the environment around us. We
understand that 'that which we are, we are' and armed with a comprehensive
strategy for change captured in iKapa Elihlumayo , we have crafted an equal
temper of heroic hearts.

At the same time that it reflects our regional needs and aims, the Budget
incorporates the new slants and priorities that have emerged from our national
processes. The fundamental goals of iKapa Elihlumayo , economic growth, social
capital formation and human resource development are therefore threads which
run all through this Budget.

Speaker, this is the year when implementation of these strategies moves
forward full-force. This is the year that the lead strategies are to take off,
where we set sail, to strive, to seek, to find, and not to yield . Our
best-laid plans may go awry. Our success with the iKapa Elihlumayo strategies
may be uneven; we may need to redirect our resources and our plans mid-stream.
Similarly, as we learn new information along this journey and begin to get
feedback on the results of our efforts, we need to be brave enough to look at
that information, to listen and to redirect where necessary. The province-wide
service delivery monitoring and evaluation system, being developed under the
leadership of the Department of the Premier, is critical to this.

This year's Budget is also exciting because it marks the first time that
provincial departments have publicly summarised specific departmental
objectives that they commit to realise in the upcoming year. More detail can be
found in the Budget Review and the Estimates of Provincial Expenditure. These
key deliverables will form the reference point for the Province's nascent
monitoring and evaluation system. In that way, the people of the Western Cape
can hold the Provincial Government accountable for our commitments to shared
growth and development.

In his State of the Nation Address, the President gave evidence of the
optimistic and positive outlook of South Africans towards the future of the
country, as reflected in national survey results. In 2005 the Provincial
Treasury commissioned its own survey to look at how our people felt about
service delivery in the Province. A random sample of 4 000 citizens
participated in the province-wide survey, to tell us about their needs and
concerns; what they thought of government's track record of service delivery;
and where they thought government should be focusing its energy and
resources.

Those results will be launched officially in April 2006, help to tell us
what people care most about and how they view government progress thus far.
Approximately half of the respondents expected economic conditions in the
Western Cape to be better or much better in 12 months' time. Respondents felt
government needed to do more to narrow the gap between rich and poor.

The preliminary findings of the survey are conveying a strong mandate for
the priority areas identified in the iKapa Elihlumayo strategies. The
respondents identified crime, job creation, and housing as the most urgent
problems for government to focus on. This year's Budget aims to address these
concerns, by increasing budget allocations to key sectors and by specifically
earmarking funds for particular priorities, thus ensuring efficacy in
expenditure.

Main elements of Budget 2006

The detail of the Budget can be found in the documents I am tabling today
but this morning I will only speak about its four main themes.

* First, education and the drive to develop skills of our youth so that they
can access the job market.
* Second, the importance of creating jobs and the economic infrastructure -
roads and public transport, that helps our economy to grow.
* Third, I will speak about how this Budget strengthens our focus on families
and communities and allocates resources to fight the forces that are
undermining social capital.
* Finally, I want to speak about what we are doing to not just construct
houses, but to build liveable sustainable neighbourhoods.

Education and skills development to access the job market

In March, Minister Dugmore will launch the Human Capital Development
Strategy, which is the province's overall plan for better education and skills
development. Overall the Department of Education receives 38% of the total
provincial Budget, which is R7 billion or R728 million more compared to Budget
2005. Within the framework of the Strategy, the entire orientation for the
Department will be upon ensuring all our learners have access to good quality
education and are equipped with the necessary knowledge and skills to
productively enter the job market.

Part of the process includes an update of an agreement between myself and my
colleague Minister Dugmore at Education to cover a range of steps to improve
the quality and outcomes of our education system. The most basic means to
improve access is to eliminate the fees for very poor learners who are deterred
from education and opportunity due to poverty. In order to put this policy into
action, the Department of Education receives R29,3 million in 2006/07,
increasing each year to reach R404,4 million in total over the Medium Term
Expenditure Framework (MTEF). The Department will also provide increased
support to disadvantaged schools by setting a higher revised benchmark norms
and standards subsidy of R527 per learner.

However the battle to ensure greater access, equity and better cognitive
abilities starts before our learners even enter schools. Therefore we have
boosted Education's total allocation for Grade R by 49% from 2005/06 to
R107,4 million in 2006/07. Over the MTEF, an amount of R534,3 million will be
spent to ensure that an increasing number of our learners have access to
quality Grade R programmes.

A conducive physical environment for our learners is essential if we expect
the investments in curriculum and teacher development to bear fruit. Safety in
schools, the provision of decent infrastructure and the elimination of
overcrowding are basic elements which protect the dignity of our learners,
teachers, principals and school staff. Over the MTEF, we will spend R228,1
million additionally for quality and upliftment programmes that will address
equipment backlogs and rundown school equipment in disadvantaged schools. On
the infrastructure side we added an earmarked allocation of R40 million to
speed up school delivery.

Our schools must be places of safety in order to be effective places of
learning. This is an issue for both Community Safety and Education who have
joined forces to create a safer environment at schools. The Department of
Community Safety will have an extra R6,7 million this year to deploy 500
volunteers to schools most at risk. The focus will be on enhancing security at
the same time harnessing community energy and promoting participation and
social networks.

Our Service Delivery Survey suggests that when parents become closely
involved in supporting their schools and participating in decisions around
their children's education, then communities become stronger and schools and
learners thrive. In 2006, the Education Department will establish a provincial
Representative Council of Learners to facilitate the interaction of school
youth in education policy as well as their participation in leadership
development initiatives. The Department will also promote the establishment of
a provincial school governing body (SGB).

An additional amount of R68,8 million is allocated in 2006/07 for the
implementation of the national curriculum statement, ensuring that learners at
schools are taught a modernised curriculum in line with the needs of a modern
economy. We need to do our best to ensure our children achieve Grade 12 and are
adequately prepared for the world of work, whether through academic studies at
school, or learning at Further Education Training (FET) colleges. A key factor
hindering economic growth and employment within the Province is the shortage of
specific skills both at the intermediate and higher level. This represents a
clear bottleneck which we have the ability and the will to tackle head-on.

The number of Focus and Dinaledi Schools will be expanded in order to
promote participation rates in mathematics, physical science and technology.
This will enable the Province to increase the number of learners, particularly
black learners, achieving pass marks high enough to enter tertiary education.
All six FET colleges in the province are to be re-capitalised, using funds from
a new conditional grant for this purpose which totals R70 million in 2006/07
and R227 million over the MTEF. This results in a total of R259,9 million
available in 2006/07 for FET, representing an increase of 63% over the 2005/06
budget. The funds will be used to support increased student enrolment, upgrade
the college sites (including physical infrastructure and equipment) and
introduce new and modern programmes.

We also plan to spend more money on bursaries for financially needy and
academically deserving learners, especially in those skill areas most in demand
by the provincial economy right now.

* In order to promote access and equity at FET Colleges, R25 million is
provided in 2006/07 for the iKapa Elihlumayo Financial Aid Plan aimed at FET
college learners. It is anticipated that 1 500 learners will benefit
during 2006/07.
* Additional funds allow the Department of Transport and Public Works to
provide R15 million over the MTEF for bursaries for engineering and
construction students as part of the Masakh'iSizwe Project - Let Us Build the
Nation. These are joined by the Department of Agriculture who plans to award a
number of bursaries to farm workers, as well as to historically disadvantaged
individuals in the fields of agriculture, engineering and veterinary
science.

Our Expanded Public Works Programme (EPWP) and its extension into the social
sector is another critical feature of this Budget. Training for Early Childhood
Development (ECD) practitioners aims at upgrading the skills of our existing
practitioners but also providing a career opportunity for new entrants. This
initiative is of critical importance as it forms part of an integrated ECD
strategy. By providing a safe, secure and stimulating environment for our
children, we also create the necessary space for women to partly free
themselves of the unequally shared responsibility of childcare and to access
the labour market.

We have added R53 million in 2006/07 and R369 million over the MTEF for ECD,
community home based care workers and community health workers. In the first
year of implementation we have set a target to train 900 ECD practitioners and
233 ECD assistants, as well as 300 HIV and AIDS home and community-based care
workers; 1 430 community-based ancillary health workers and 220
community-based antiretroviral (ARV) and voluntary counselling and testing
(VCT) workers. Overall our EPWP will give more unemployed people a chance to
earn an income and at the same time gain some concrete skills which will stand
them in good stead over the medium term.

A successful EPWP project - whether it be in construction or social
services - will have to strike the right balance between three concerns:
short term poverty relief and social inclusion; medium term goals to develop
skills for the job market and benefit from social service programmes and long
term aims to achieve positive economic outcomes from the creation of solid
infrastructure. This is what we are aiming for.

Growing the economy and creating jobs
The second overall theme of this Budget is job creation and growing the
economy. We will focus on providing better information to connect entrepreneurs
to business development services and to inform citizens about job
opportunities. To achieve this, the Department of Economic Development and
Tourism receives a boost in this year's budget. The Department's
R188,4 million budget for 2006, R43 million more than was allocated
in 2005, will be used to proactively support particular economic sectors which
have good potential to create jobs and foster Broad Based Black Economic
Empowerment (BBBEE). The five sectors identified in the Premier's battle plan
will be targeted. In addition, support will be provided to: Clothing and
Textiles; the Craft sectors; and the Film industry.

For 2006/07, R47,9 million is earmarked for implementation of sector
initiatives developed as part of the Microeconomic Development Strategy (MEDS),
the Province's Micro economic Development Strategy and R3,9 million set aside
to promote Business Process Outsourcing and Call Centres in particular. The
pursuit of accelerated and shared growth also calls us to provide increased
support to small and emerging entrepreneurs. Our Service Delivery Survey
indicated that people are not asking for financial handouts from government.
They say they need better information about what business development services
the government can offer. Government will spend R49,6 million in 2006/07
to increase economic participation, up 46% from last year's budget. This will
be used to further refine the services offered at the Real Enterprise
Development (RED) Door offices, to increase the number of RED Door Offices and
to launch the mobile Red Door.

To give further support to local economies, a 'Die Plek Plan' office will be
established in every municipal district. These district offices will be
responsible for identifying viable business opportunities in local areas, as
well as assisting local municipalities to further articulate their economic
development strategies and implementation plans. This initiative also includes
a specific focus on investigating viable business opportunities in rural areas.
Agriculture is a key sector in the Western Cape, as a sector its products
directly or indirectly constitute over 40% of total exports from the
province.

Through its support to the land reform programme, provision of extension and
support services to emerging farmers and its human capital development
interventions aimed at farm workers and farmers, the Department is building the
basis on which groups previously marginalised can share in this prosperity. In
total the Department of Agriculture receives R254 million in 2006/07,
which is R15,8 million more than what was budgeted in 2005/06.

The Farm Worker Development Programme will focus on improving farm worker
productivity, thus assisting farm workers to increase their income. An
additional allocation of R30,2 million over the MTEF will be used to support
initiatives which include: technical training programmes for farm workers;
programmes to recognise prior learning; and financial support for children of
farm workers to study at Elsenburg College.

Water availability is a critical constraint to the development of the
agricultural sector. Therefore the Department is exploring ways to carefully
supplement existing agriculture water sources with new sources, in order to
open up new areas in the Province for emerging farmers. One such area is the
middle to upper reaches of the Olifants River Valley. The Department is also
working to increase the efficiency of irrigation systems. Together these water
projects will receive at total of R7,8 million over the MTEF funded
specifically for this purpose from additional allocations.

Infrastructure investment is a key mechanism for increasing the productivity
of economies, and thus boosting economic growth. Physical investment opens up
economic opportunities and reduces costs for businesses in the Western Cape.
The Premier described infrastructure as the nervous system of our economy.
Total infrastructure spending, across all departments, is budgeted to reach R2
billion in 2006/07, 21,6% higher than in the 2005/06 budget. Together Health
and Education infrastructure spending is budgeted to make up just over 30 per
cent of the infrastructure budget in 2006/07.

The roads network is also critical to the success of the Western Cape
economy. It allows agricultural produce to be timeously and affordably
marketed, public transport to operate effectively and tourists to access unique
amenities, thus contributing to local economies. Public transport builds us as
a province because it connects people to jobs and to each other; it shortens
distances between communities, and allows us to take advantage of the public
spaces and opportunities in our beautiful province.

In recognition of this, the province has prioritised expenditure on roads
and protected that priority through earmarked allocations which amount to R3,5
billion over the MTEF. For the first time, this year the budgeted annual
expenditure on roads rises above the R1 billion mark to R1,2 billion.
Continuing a trend begun last year, the roads programme is set to increase by
13,1% on average each year over the MTEF. Key highway infrastructure in the
City will be rehabilitated, including the N1 and the N2 and an interchange at
Potsdam on the N7 will be completed. In anticipation of the 2010 FIFA Soccer
World Cup, the dedicated bus and taxi lane along N2 will be extended.

During 2006/07 the Department of Transport and Public Works , in partnership
with the City of Cape Town, will enter the construction phase of the
Klipfontein Corridor Project. The Department's total contribution to the
infrastructure aspects of the project is budgeted at R190 million over
MTEF.

The Department will continue its work on improving public transport in large
towns, for instance George and Mossel Bay, and relatively densely populated
networks of towns outside of Cape Town. To address the poor safety record which
mars public transport, the Department will launch a comprehensive safety and
enforcement programme. As a whole, Transport and Public Works is budgeted to
receive R2,1 billion in 2006/07, a 20,6% increase compared to what was
originally allocated to the Department for 2005/06.

Supporting families and communities
Speaker, our various efforts to support families and communities all tie back
into our lead iKapa Elihlumayo strategy: Social Capital Formation (SCFS),
launched in October 2005 by Minister Mqulwana. In alignment with national
priorities, it aims to strengthen social cohesion by creating safer and
healthier communities, strengthening networks and increasing access to
government services and information. Implementation is already underway; but in
2006/07 we will see acceleration and expansion of these and other new
programmes to arrest and reverse the decline in social capital in the
Province.

The SCFS adopts an emphasis on youth, reflected in youth protection and
development programmes related to safety in schools, drug abuse, and sports in
schools. Alcohol and drug use are the biggest contributors to high levels of
crime in our Province. Research has shown that substance abuse, especially the
abuse of 'Tik Tik' amongst our youth under the age of 20 years, has
increased by 50% since 2003.

Under the leadership of the departments of Social Development and Community
Safety, the Social Cluster in the past year began the rollout of anti-drug
campaigns in 10 hotspot areas in the Cape Flats. To further strengthen these
initiatives, the Department of Social Development (our new proposed name) has
increased its substance abuse budget by 40 per cent to a total of
R32 million in 2006/07. Approximately 1 000 community-based
fieldworkers will be recruited to support substance abusers after their first
phase of rehabilitation, to assist them to avoid relapse. On their part, the
Department of Health has set aside R1,6 million for the upgrade and
expansion of detoxification facilities at Stikland Hospital.

Women and children remain the most vulnerable groups in our communities,
with high levels of alcohol and drug abuse too often resulting in violence
against our children and women, and leading to risky sexual behaviour, rape,
murder and violence. The Department of Social Development continues to work
with non-governmental organisations (NGOs) to equip women to participate in
economic activities and opportunities, while the Department of Health plans to
increase support of rape survivors and expand the reach of services for women
to undergo screening for cervical cancer.

As soon as the Bills are passed, the Department of Social Development will
begin work in 2006 to implement the Children's Bill and the Child Justice Bill,
as well as the Older Person's Bill. Additional amounts of R4,8 million
have been given in 2006/07, R34,6 million in 2007/08 and R72 million
in 2008/09, for the progressive realisation of these three bills to protect our
children and the aged.

Speaker, too many people continue to die on our roads. In Cape Town
transport injuries were the second leading apparent manner of non-natural
deaths after violent deaths, accounting for 25% of all deaths. According to the
Road Traffic Management Report of November 2005, road fatalities in the Western
Cape increased by 11,5% relative to the corresponding period in 2004, with 130
fatal crashes (mostly cars) on average per month, at an economic cost of
R110 million each month.

This fatality and injury rate remains unacceptably high and what is worrying
is the rate of increase year on year, in spite of many efforts. As experience
in other countries has shown, this is largely preventable. In this next year,
the Department of Community Safety in liaison with municipalities and the
Departments of Transport and Public Works and Health, have undertaken to
implement its researched Motor Vehicle Accident Intervention strategy to create
a safer road system in the Province.

Overall the Department of Community Safety receives a total budget of
R181,3 million in 2006/07 - R7,5 million more than was allocated last
year.
The Department of Cultural Affairs and Sport is focusing its energy on reviving
school sport to keep our youth away from drugs and violence by providing them
with positive alternatives. In the coming year the Department receives
R2 million to begin the process of establishing a sport school at the Old
Education College in Kuils River. The total allocation made available for the
establishment of the School Sport over the MTEF period is
R10,4 million.

Additional funds amounting to R14,5 million have been allocated to
Cultural Affairs and Sport over the next three years to prepare the Province
for the Western Cape leg of the 2010 FIFA World Cup. The Department will
use these funds to capacitate a high-powered unit to co-ordinate preparations
for the Western Cape leg of this event.

The key priority for the Department of Health in the 2006/07 financial year
is the finalisation and implementation of the service plan which will give
effect to Health Care 2010. In 2006/07 the Department receives 34% of the total
Provincial Budget, amounting to R6,3 billion and totalling R20,4 billion
over the MTEF. That is R2 billion more than the previous MTEF.

Primary Health Care (PHC) services are provided with an additional
R27,9 million, with the total amount allocated to PHC in 2006/07 standing
at R1,4 billion. Over the MTEF an additional R211,6 million has been
made available for PHC. In 2006/07 the Health Department expects to conclude
the shifting of full responsibility to it for the provisioning of Primary
Health Care services that were previously the domain of the non-metro
municipalities. The advantage of this shift is that health care service
delivery will be unified, thus simplifying the experience for the beneficiary
and improving efficiency and the quality of overall health care. Primary health
care will further benefit from additional staff, longer opening hours at
community health centres and the computerisation of PHC services.

New resources have also been made available for the modernisation of
tertiary services. Over the MTEF, an additional R94,8 million will be
spent to replace medical equipment in specialist hospitals, strengthening
cancer oncology services and increasing the number of medical specialists,
while R382 million will be used to revitalise provincial hospitals.

Emergency medical services benefits from an injection of R62,5 million over
the MTEF, allowing implementation of a new expanded and improved national
ambulance model, cutting response times and improving care and patient survival
rates. In the past few years the Department of Health witnessed an exodus of
qualified staff especially nurses to seek greener pastures elsewhere. Funds
have been provided to boost numbers of health professionals, totalling
R20 million in 2006/07 and R127 million over the MTEF.

The HIV and AIDS epidemic is a standing concern which requires our continued
effort, vigilance and attention. HIV and AIDS and TB are twin dangers which
together create a more serious epidemic. It is reported that 30% of TB patients
in the province are co-infected with HIV, resulting in high morbidity and
mortality rates in this group.

The Department of Health has set aside R12,5 million to strengthen the
tuberculosis programmes. With support from conditional grant and grant funds
from the Global Fund, the Department seeks to strengthen and expand programmes
to effectively manage the dual epidemic cause by Tuberculosis (TB) and HIV.
Four hospitals will be upgraded to care for the more acutely ill patients.

As part of the response in addressing these issues, the Department of Health
plans to recruit, train and deploy 4 876 HIV and AIDS new peer
educators, working with NGOs in communities and classrooms, in order to guide
and counsel young people on the prevention of disease and the adoption of
healthy lifestyles.

Building on initiatives already started in 2005, the Department of Health
together with the four institutions of higher learning will proceed with
research to get a better grip on the burden of disease and its informants in
the Western Cape. That in turn will allow us to direct and shape our health
services more appropriately.

More Housing and basic services
Speaker, the fourth theme of this Budget is sustainable human settlements. The
Province has to make sure its investment into housing is used to the maximum
effect and that it has the greatest economic spin-offs. The Provincial Spatial
Development Framework (PSDF) is the policy framework for achieving
sustainability in our settlements. During the coming year, Minister Essop and
her department will continue to roll out the PSDF, launched in December 2005,
and to fine-tune the mechanism for its implementation. The Department of
Environmental Affairs and Development Planning has received additional
resources of R2 million in 2006/07 to facilitate the implementation of the
PSDF.

One of the critical factors confounding development in the Western Cape is
the time taken to get a decision on a development application. Much innovative
thinking has occurred under the auspices of the Integrated Law Programme about
how that decision-making time can be dramatically cut down, while maintaining
and even improving the quality of decisions. Environmental Affairs will
continue guiding its draft legislation and building awareness and municipal
understanding and capacity to implement the provisions during the course of
this year. The draft Bill is due for release very soon.

Environmental Affairs is also spearheading the development of a
comprehensive response to climate change in the Western Cape. Climate change
impacts negatively on water, a resource which already severely constrains
growth in the Western Cape. The Department will work with Cape Nature and the
Department of Agriculture to continue to develop and finalise a climate change
strategy which also improves the management of water quality and demand. The
Department of Environmental Affairs and Development Planning receives a total
budget of R175,5 million or R16,8 million more than in 2005/06, to
carry out its responsibilities in 2006/07.

The Department of Local Government and Housing has been thinking hard about
how, together with municipalities, it can increase the number of subsidised
housing units that are delivered, the quality of the housing, the coverage of
basic municipal services and the overall governance of neighbourhoods and
settlements in which they fall.

To realise the potential contribution that housing units can make to
increase the asset portfolio of the poor, housing has to be well-located in
relation to economic opportunity and the units and their associated services
well-maintained. As part of the PSDF, the Department is developing a
"Sustainability Framework" to allow it to screen out housing subsidy
applications from municipalities for projects that are not located in the areas
of economic potential. The Housing Programme receives R2,4 billion over the
MTEF and R663 million in 2006/07, which is R135 million or 26% more
than was allocated for 2005/06.

2005/06 saw the establishment of a provincial Disaster Management Centre in
partnership with the Departments of Health and Community Safety. By pooling
resources, the Centre will allow for better response times to emergencies in
the metropolitan area and across the province more generally (due to improved
inter-district dispatching). The Department aims to establish a network of
similar emergency management centres at district-level in collaboration with
municipalities.

The Department will also spend R14,5 million over the MTEF on a new
capacity building programme for local government. Although considerable
resources have been pumped into improving the capacity of municipalities over
the last 10 years, many of the responses have failed to recognise and
build on the capacity that already exists within municipalities.

The Local Government and Housing programme will create measures to retain
and expand existing capacity from within local government itself and to
encourage municipalities to take ownership of the process, balancing this with
the use of external experts that has often dominated programmes of the past.
Overall the Department of Local Government and Housing receives
R777 million in 2006/07 and R2,7 billion over the MTEF, which is up
23% on what the Department was originally allocated in 2005/06.

Fiscal Framework

Speaker, the Budget I table this morning totals R18,4 billion in
expenditure for 2006/07, rising to R21,6 billion in 2008/09. This
represents a nominal increase of 12% from 2005/06.

Provincial payments exceed provincial receipts in 2006/07 by
R604,0 million. This amount will be financed by R622,7 million from
the Asset Financing Reserve, plus a small amount of R3,3 million from
Compulsory Savings. Total Provincial receipts are projected to increase at an
average annual real rate of 8,5 % over the MTEF, from R17,8 billion
in 2005/06 to R21,5 billion in 2008/09. This rise is fuelled mainly by
increasing transfers from national government. Receipts sourced internally
through own receipts and financing are projected to decrease from
R2,1 billion in 2005/06 to R1,8 billion in 2008/09. The numbers above
discount the shift of social assistance grants to South African Social Security
Agency (SASSA) from 1 April 2006. However, the Province will continue to
render an agency service for the interim.

Conclusion

In conclusion, we recollect how three years ago, we set forward on a path of
change articulated in the iKapa Elihlumayo strategies. With Budget 2006/07, we
now step forward with the implementation of these strategies, inside the
framework of accelerated and shared growth.

Ellen Sirleaf Johnson, the new Liberian President who took office
17 January as the first elected female leader in Africa, stated in her
inaugural address: We pledge to live up to your expectations of creating a
government that is attentive and responsive to your needs, concerns and the
development and progress of our country.

We make a similar commitment here today, recognising that we cannot do this
alone. Apart from co-operation between ourselves and the national and municipal
spheres, we also need the assistance of the private sector and civil society,
to each bring to the equation its own unique skills and resources.

Together we commit ourselves to push forward to pursuing economic growth
which benefits all our people and which extends opportunities to all. This is
our newer world, of which Tennyson spoke:

“Come, my friends,
'Tis not too late to seek a newer world?
for our purpose holds
To sail beyond the sunset?
To strive, to seek, to find, and not to yield”

I would like to thank Minister Manuel who is always ready with advice.
Secondly, the Heads of the Departments, many of their staff, municipal managers
and their staff who collectively gave Budget 2006 its inclusive flavour and who
provided much of the substance that went into shaping this year's budget.

The Provincial Treasury team who led the process, consolidating all the
inputs into what I believe is a budget that will go a long way in getting us to
the not-so-unattainable shared growth rate of 6%.

To all my special guests, family and friends here today, thanks for your
contributions in so many fields. The Premier and my colleagues in Cabinet,
thank for your support and guidance in shaping this budget.

To you, Speaker and Members of this House, accept my sincere appreciation
for your own inputs over the last year on many occasions. Lastly, this Budget
was assembled by us together, but the trick lies in its implementation. If we
can be as good with the implementation as we were in its design, then we will
be successful in achieving our goals of shared and sustainable growth and
development. Remember, the old DRC proverb “A single bracelet does not
jingle”.
I thank you.

Issued by: Department of Finance and Tourism, Western Cape Provincial
Government
17 February 2006
Source: Western Cape Provincial Government (http://www.capegateway.gov.za/)