Paul Mashatile
26 February 2007
Comrade Speaker and Deputy Speaker,
Comrade Premier, Mbhazima Shilowa,
Colleagues in the Executive Council,
Honourable Members of the Provincial Legislature,
Ministers and Members of Parliament present here today,
Mayors and Speakers from various municipalities,
Heads of Department, Government officials and leaders of our Agencies,
Leaders of various political parties,
Leaders of the business community,
Leaders of civil society organisations,
Learners from various schools in Gauteng present here today,
Distinguished guests,
Comrades and friends,
The people of Gauteng,
We are tabling the 2007/08 provincial budget, a few months after reaching
the half way mark of our current term of governance. This means that we have
now entered the last mile of the journey we began in 2004.
It is during this mile that we must and will continue to intensify efforts
aimed at honouring the pledge we made to our people back in the 2004 general
election and implementing our vision for 2014.
During this last mile, we must elevate our gains to a higher level. This we
must do in order for us to say at the end of the journey in 2009 that: ours was
indeed a journey of success.
Since 2004, and even before that, we have tabled to this House successive
budgets that have progressively extended the resource envelope devoted towards
meeting the goals we have set for ourselves.
The budget we are tabling today is no different. It seeks to sustain the
momentum we have built in accelerating the shared growth of the provincial
economy, creating new opportunities for employment, fighting poverty, promoting
skills development, building healthy and safe communities, deepening democracy
and building an effective and caring government.
The achievement of these objectives is at the core of our approach to meet
the genuine expectations of our people, clearly articulated in the mandate they
gave us in 2004.
Years of prudent economic policy choices both at national and provincial
levels, once again give us the opportunity to channel more resources to address
the socio-economic needs of our most vulnerable citizens.
Through this year's budget we will strengthen our ability to improve access
to quality services, address vulnerability and inequality; increase investment
in communities to ensure sustainable livelihoods; and develop the skills needed
by the economy through enhanced education and training.
Also of significance is that we have once again managed to strike a balance
between capital and social expenditure.
Furthermore, through this year's budget, we will consolidate our quest to
enhance our global competitiveness as outlined in the Gauteng City Region (GCR)
Perspective.
In this regard, we have allocated resources to strengthen integrated
governance to ensure collective planning, co-ordination and implementation
across departments and in co-operation with local government.
This budget seeks to accelerate and optimise the role of the different
departments in driving sustainable economic growth and development and reducing
disparities between the first and second economies.
Comrade Speaker, allow me to take this opportunity to emphasise that: in
line with the GCR perspective and working together with local government, we
will continue to allocate adequate resources towards ensuring that Gauteng will
be ready to host the 2010 FIFA World Cup.
Economic outlook
Global economic prospects
We are tabling the 2007/08 Budget against the background of a global economy
whose growth remained buoyant between 2004 and 2006. The forecast for global
growth has been revised upwards to 5,1% in 2006 and slightly coming down to
4,9% in 2007.
This solid performance in the global economy was achieved despite record
high prices of crude oil and other commodities, military conflict in some parts
of the world and various natural disasters. It also defied the adoption of
tighter monetary policies in many parts of the world.
In the United States real output growth moderated somewhat in 2005. It
rebounded strongly in the first quarter of 2006 but slowed again in the second
quarter. Growth in the US is expected to slow from 3,4 % in 2006 to 2,9 % in
2007, as a result of a cooling housing market.
Economic growth in the Euro area decelerated slightly in 2005 only to regain
some momentum in the first half of 2006.
Real output growth remained strong in most Latin American and Asian emerging
market countries, especially in China and India which are experiencing a growth
rate of more than 10% and 8%, respectively.
In our continent, we registered real growth of around 5,4% in 2005. A slight
further acceleration in real growth is expected for the whole of the African
continent in 2006 and 2007, supported by strong growth in oil-exporting
countries and robust global demand for non-oil commodity exports.
Prospects for the South African economy
Our country recorded a real growth rate of almost 5,1% in 2005. Of
significance is that the economic expansion of 2005 forms part of a sustained
and robust upswing, which to date has been the longest in the history of the
South African business cycle.
This, Comrade Speaker, is a direct result of the sound economic policy
choices, the African National Congress government made after our liberation in
1994. In the first half of 2006, real growth rebounded from a slump experienced
in the second half of 2005, supported by a recovery in manufacturing activity.
The construction and the tertiary sector also contributed to growth during this
period.
Real disposable income of households continues to maintain a robust rate of
increase, spurred on by rising employment and wage levels, higher transfers
from government to households in support of the poor as part of our effort to
strengthen the quality of social development and expand the reach of the social
security net.
Foreign direct investment activity continues to show a positive increase and
last year included some large transactions indicating growing confidence and
increased appetite by major international investors in our economy.
In 2005, the improvement in the performance and resilience of our national
economy was recognised by no less than two credit-rating agencies, Standard and
Poor's and Fitch Ratings both of whom upgraded our country's sovereign debt
rating from BBB to BBB+.'
This points to the impressive progress we have made in turning our economy
around from a position of stagnation prior to 1994 to that of sustained
growth.
The provincial economy
Comrade Speaker, the structure of the provincial economy has changed
considerably from its traditional reliance on the primary sector, which for
many years has been its backbone. In recent times, the services sector has
expanded its importance to the provincial economy.
The importance and concentration of the service sector, especially finance
and business services, which could be harnessed to promote more industrial
development and investment in other parts of our country, further highlights
Gauteng's critical role in the development of the South African economy, and
the economies of the southern African region and the African continent.
Like the economies of many City Regions across the world, the Gauteng
economy is poised to continue to be a major contributor to the national and
regional economic product.
We have fully embraced the changes taking place in the world economy, where
technology has helped to annihilate the barriers of space by bringing all parts
of the world into ever closer contact with one another.
Our efforts to organise and manage the Gauteng economic, political and
geographic space in a manner that encourages strong integration and promotes
synergies continue to gather momentum.
In all material respects, urban Gauteng has become an integrated
multi-centred urban network, offering many opportunities for specialisation. We
have in our province clearly defined economic clusters, which are
interdependent and form a key component of building a successful and globally
competitive economy.
It is these developments, Comrade Speaker, that further indicate to us that
our vision to position Gauteng as a Global City Region is taking shape.
We are also encouraged that in line with the trend nationally, the
provincial economy continues to show strong growth. According to Statistics
South Africa, the provincial economy grew at a rate of 5,4% in 2005.
Pointing to the improvement in the quality of life of the citizens of
Gauteng is the fact that disposable income has shown a significant increase
from 4% of total income in 2004 to well over 12% in 2005.
Business confidence in Gauteng remains at impressive levels. This can be
seen by the increased investment the private sector is making in the provincial
economy. According to the Gauteng Business Barometer, in 2005 business activity
in Gauteng increased by 10,7% compared to the year 2004.
Between 2000 and 2005, net capital investment grew by 17,2 %. Capital
investment in all major sectors of our economy such as finance and business
services, construction and manufacturing continues to show a positive
increase.
We are beginning to make a dent on unemployment. As the Premier indicated
during the State of the Province Address, 426 000 new employment opportunities
were created in Gauteng between March 2002 and March 2006.
The creation of new job opportunities is a crucial factor in making Gauteng
a more competitive global city region. This is because global investment tends
to favour destinations where a significant portion of the population is in
gainful employment.
It is therefore vital that we continue to increase our employment figures so
as to enhance our prospects of attracting investors.
Despite a slowdown in economic activity in the fourth quarter of 2006 as a
result of higher inflation and increased interest rates, we are optimistic that
the provincial economy will continue to be resilient in 2007.
With interest rates likely to moderate in 2007, we anticipate a growth rate
of around 6% by the end of this year.
This indicates to us that we are firmly on course towards reaching our
objective of growing the provincial economy at a rate of 8% by 2014. It further
indicates that we have embarked on a journey of success.
Our journey of successes
Comrade Speaker, the Premier in his State of the Province Address eloquently
articulated the progress we have made in honouring the pledge we made to our
people in 2004.
Our mid-term report also indicates clearly that we have made significant
progress in meeting the priorities we identified in our Five Year Strategic
Plan.
We are on course towards meeting our strategic objective of enabling faster
economic growth and job creation. Through the implementation of the provincial
Growth and Development Strategy (GDS) we have made significant progress in
stimulating economic activity in sectors such as the information and
communication technology (ICT), automotive, knowledge intensive, agriculture,
competitive sport, film and creative industries.
The implementation of the Broad Based Black Economic Empowerment (BBBEE)
Strategy and the support we are offering to Small Medium and Micro Enterprises
(SMMEs) through the Gauteng Enterprise Propeller (GEP) form part of our ongoing
endeavour to expand participation in the economic mainstream and boost shared
economic growth.
From 2004 to 2006, more than 2 700 black owned businesses benefited from our
procurement spending. Of these more than 1 400 were women owned, 73 were owned
by people with disabilities and 17 were owned by the youth.
We expect these numbers to improve significantly as we accelerate the
implementation of our BBBEE Strategy. Our target is to ensure that by 2009, 70%
of government procurement benefits BBBEE companies.
Since its inception in 2005, GEP has assisted more than 400 SMMEs in
strategic areas such as productivity enhancement, quality assurance and
marketing. A further 1 000 aspiring and existing entrepreneurs have also been
trained. More than 2 000 SMMEs are registered on the GEP portal. We are
confident that our target to support 30 000 SMMEs by 2014 is within reach.
As part of implementing the GDS, we are supporting the development of
creative industries. This we are doing because creative industries the world
over have proven themselves to be important elements in the building of a
successful city region and contribute to social and economic development.
We continue to increase our investment in infrastructure in an effort to
stimulate economic growth, create new employment opportunities, contribute to
the economic regeneration of targeted areas and create new nodes of economic
activity.
As we have said in the 2006/07 Medium Term Budget Policy Statement, together
with local government we will spend more than R50 billion over the next three
years to improve infrastructure across the province.
We are delighted that we have reached financial close with our private
sector partners in the implementation of the Gautrain Rapid Rail Link project.
As we know, Gautrain is currently the second largest private public partnership
rail project in the world, with the public sector committing close to R 22
billion towards the project. The private sector's commitment to the project
will total over R 3 billion.
I must thank both Standard Bank and Rand Merchant Bank for the confidence
they have shown in our economy by contribution to these resources. Likewise we
thank the Industrial Development Corporation (IDC) and the Development Bank of
Southern Africa (DBSA) for making funding available in support of the BBBEE
partners in the project, committing a combined amount of R400 million.
We believe that this major infrastructure project will radically change the
face of our province, contribute to accelerated economic growth and job
creation and will no doubt take us closer to our vision of becoming a globally
competitive city region.
The implementation of a comprehensive provincial Agricultural Development
Strategy which includes bio-technology and agro processing will go a long way
in addressing some of the challenges faced by the agricultural sector in our
province.
Most importantly, it will contribute to our overall objective of fighting
poverty and building safe, secure and sustainable communities.
In pursuance of this objective we have since 2004 made significant progress
in uplifting poor communities, improving access to basic services and in
expanding the social security net, including through the Bana Pele programme
which provides free services to poor children in our province.
Furthermore, through the Expanded Public Works Programme, we are succeeding
in alleviating poverty among our people while simultaneously providing them
with work experience and skills. Since 2004 a total of 3 973 new job
opportunities have been created as part of the Extended Public Works
Programme.
Our comprehensive urban renewal programme to upgrade social and economic
infrastructure in 20 priority townships across Gauteng is one of the key
interventions that will take us closer to the objective of fighting poverty and
building safe, secure and sustainable communities.
This programme is also a major intervention aimed at promoting even
development in our province.
As an integral part of building Gauteng as a Globally Competitive City
Region, local government is also engaged in a number of infrastructure projects
aimed at fighting poverty and building safe, secure and sustainable
communities.
We are making progress in developing healthy, skilled and productive people
by ensuring access to quality healthcare, education and training. Last year we
launched the Human Resources Development Strategy which provides a framework to
advance skills development in line with the needs of the provincial
economy.
We have intensified our learnerships and internships programmes with a view
to providing our young people with relevant skills that will enable them to
secure gainful employment. We are also paying attention to early childhood
development.
As part of our quest to deepen democracy and ensure the realisation of the
constitutional rights of our people, we continue to pay attention to the
emancipation of women, the youth and people with disabilities.
Through our programme of Izimbizo, we are interacting with our people,
offering them an opportunity to influence government policies and
programmes.
The deployment of skilled professionals such as engineers and accountants to
municipalities is underway. The provincial Treasury is also working with
municipalities to assist them in strengthening financial management
capacity.
The results of these interventions are starting to bear fruit and place us
firmly on track towards our objective of building an effective and caring
government.
Comrade Speaker, as we enter the last mile of the journey we began in 2004,
we look back with pride on what we have achieved. Going forward, we will act
with even more determination to ensure that the progress we have made is not
only sustained but also elevated to a higher level.
To sustain the momentum we have built, we will this year strengthen efforts
aimed at further growing the provincial economy, broaden participation in the
economic mainstream and creating more opportunities for employment.
This we will do by intensifying the implementation of the provincial GDS,
the BBBEE Strategy and strengthening support to SMMEs. Our capacity to monitor
and evaluate the impact of our programmes will be strengthened.
We will also pay attention to the development of skills required by our
economy. The programme to recruit and retain highly-skilled professionals will
also be intensified.
We will achieve further advances in our fight against poverty and
underdevelopment by intensifying the implementation of the Expanded Public
Works Programme and the Gauteng Social Development Strategy.
Efforts aimed at building safe, secure and sustainable communities will also
be prioritised through the provision of quality policing services including in
poor and marginalised communities.
Investment in infrastructure will be stepped up. We will strengthen efforts
to improve inter-governmental planning, co-ordination and implementation so as
to maximise the impact of our collective interventions.
Our focus will also shift to the implementation of programmes that will
deliver maximum impact towards the attainment of our goals.
Guided by the GCR perspective, we will continue our endeavours to strengthen
the capacity and organisation of the state. Towards this end, we will this year
identify critical skills, knowledge base and technical expertise that are
essential to manage a successful city region.
One of the challenges we face in our endeavour to become a smart province,
is to ensure expanded access to information and communication technology across
the province. The Blue Umbrella initiative, for ICT infrastructure roll-out,
will enable us to respond to this challenge in a comprehensive manner. This
initiative will also improve access to government services by all the citizens
of Gauteng.
Comrade Speaker, strategies to sustain the momentum we have built and to
deal with the challenges we face are already in place. Our task will be to
vigorously implement them. The budget we are tabling today will go a long way
in facilitating the implementation of these strategies.
Estimates of Revenue and Expenditure
I will now to proceed to the allocations for this year's Medium Term
Expenditure Framework Budget.
Correctly so, this year's budget is reflective of the political priorities
of our province. It builds on the progress we have made towards the goals we
have set for ourselves in our Five Year Strategic Plan and is in line with the
Medium Term Budget Policy Statement we tabled before this House in November
last year.
It takes into account that this is the last mile of the journey we began in
2004, and therefore positions us to make new and further advances in responding
to the aspirations of our people.
Estimated revenue for the 2007/08 financial year is R40 billion increasing
to R45 billion in the 2008/09 financial year and rising further to R49 billion
in 2009/10.
Estimated Revenue for 2007/08 comprises of the equitable share of R 28,2
billion, conditional grants from national government of R 9,6 billion and
provincial own revenue of R2,8 billion.
Honourable Members; this brings the total estimated revenue available during
the current Medium Term Expenditure Framework (MTEF) period to R134
billion.
Total estimated expenditure is also expected to increase significantly over
the next three years. For 2007/08 we are allocating R40,3 billion, rising to
R44 billion in 2008/09 and R47 billion in 2009/10. This brings total
expenditure over the next three years to R131 billion.
We anticipate that the allocated budget estimates for 2007/08 will fall
short of revenue thereby realising a deficit of R336 million. This will be
financed from the surplus in the Provincial Revenue Fund.
We are however encouraged that in the 2008/09 financial year we will record
a surplus of R643 million and again in the 2009/10 financial year we will
record a surplus of R1 billion, amounting to a total of R1,6 billion available
for spending in the last two years of the MTEF.
This will allow the Executive Council to increase spending on programmes
aimed at boosting economic growth and thus contribute to job creation.
Social versus economic cluster allocations
Comrade Speaker, this year, the social sector which includes health,
education and social development receives a combined allocation of about 70% of
the total budget. This allocation is maintained in the two outer years of the
MTEF. Likewise allocations to the economic cluster are maintained at around 30%
of the total budget over the MTEF period. This represents a major boost for
capital spending which rises significantly over the MTEF.
Education receives 36% of the 2007/08 budget to provide for quality public
education and contribute to skills development. Health receives about 30% of
the total budget to provide responsive and quality health services to the
citizens of Gauteng. Social Development receives the remaining 4% of the total
budget to provide social welfare services and promote social cohesion.
The largest share of the remaining 30% goes to the Departments of Housing,
Public Transport, Roads and Works and Economic Development.
We wish to reiterate that we will continue to find the right balance between
expenditure on social services and on programmes that will serve as catalysts
for job creation, economic growth and development.
I will now focus on how this year's budget will be allocated to individual
departments.
Department of Education
Comrade Speaker, we remain acutely aware that central to our effort to
overcome poverty, create jobs and grow the economy is the need to enhance the
human potential of our people through education and skills development.
The development of skills is also critical to ensuring that the Gauteng City
Region becomes globally competitive.
The Department of Education will this year focus on, among others, the
following priority areas:
* funding the intake of teachers in areas where there are shortages
* improve the quality of teaching in public schools
* providing for the no fee school policy to identified schools
* increasing access to Further Education and Training (FET) Colleges in order
to develop the skills required by our economy
* providing adequate school infrastructure
* funding for Adult Basic Education and Training institutions to reduce the
levels of illiteracy in our province
* cover expenditure on new areas as a result of demarcation.
The total budget allocated to the Department of Education for 2007/08 is R
14,5 billion, rising to R15,9 billion in the 2008/09 financial year and rising
further to R17,1 billion in 2009/10.
This large increase in the budget of the Department of Education is to
ensure that we can adequately cater for the needs of learners in the
re-demarcated areas and also strengthen the quality of teaching in all public
schools.
Department of Health
To advance further our objective of creating healthy, skilled and productive
people, the Department of Health receives additional resources to cater for,
amongst others, the following:
* the provincialisation of tuberculosis (TB) beds and primary healthcare
services
* providing for critical care beds including intensive care unit and high care
beds
* the control of communicable diseases
* additional resources for the pre-pack unit at the medical supply depot
* revitalisation and building of hospitals and other health facilities
* review and appointment of additional health professionals
* introduction of smart cards for all patients using our hospital
services
* strengthening the Emergency Medical Services in preparation for 2010 FIFA
World Cup.
To further strengthen our response to the challenge of HIV and AIDS, we are
allocating R577 million to the Department of Health for the 2007/08 financial
year to fund our comprehensive HIV and AIDS plan. This amount will increase to
R645,7 million in 2008/09, rising further to R854,9 million in 2009/10.
In order to ensure that all our people have access to quality healthcare, we
are allocating R1,6 billion over the MTEF for the revitalisation and building
of hospitals. Further funding will be made available over the MTEF from the
equitable share to ensure that all these facilities are completed by 2009.
Comrade Speaker, the total budget allocated to the Department of Health for
the year 2007/8 is R12 billion, rising to R12,7 billion in 2008/09 and to R14,2
billion in 2009/10.
Department of Social Development
In line with our commitment to expand the social security net and deepen the
quality of social development as part of our comprehensive response to the
challenge of poverty, the Department of Social Development receives an
additional allocation to focus on the following priorities:
* the development of Early Childhood Development Centres in the 20 priority
townships
* the establishment of an electronic data management system to manage social
programmes rendered by non-governmental organisations on behalf of the
department
* the implementation of the provincial Social Development Strategy
* the improvement of incentives for social workers and recruitment of social
auxiliary workers
* intensify the implementation of Bana Pele to ensure that we continue to
provide, among others, school uniforms to learners from poor households.
The Department of Social Development will continue to play a critical role
in enhancing social cohesion in our province.
Comrade Speaker, for the 2007/08 financial year, the total budget for the
Department of Social Development is R1,4 billion. It increases further to R1,6
billion and R1,7 billion respectively in the two outer years of the MTEF.
Department of Housing
The provision of affordable housing on well located land forms a critical
part of our overall effort to build sustainable communities. Furthermore,
housing has an important influence on overall economic performance and the
quality of life in our communities.
The Department of Housing this year receives additional allocations to
accelerate programmes to formalise informal settlements, provide social housing
and ensure adequate funding for urban renewal programmes in Alexandra,
Bekkersdal and Evaton.
We are allocating R750 million over the MTEF to intensify our programme of
urban renewal in Alexandra, Bekkersdal and Evaton.
As indicated by the Premier in the State of the Province Address to the
Legislature, the Department of Housing will begin a process to do a feasibility
study and conclude a business plan for the regeneration of Winterveld.
Comrade Speaker the total budget for the Department of Housing is R2,6
billion. In the two outer years of the MTEF it increases to R3 billion and R3,4
billion respectively.
Department of Local Government
Working with the provincial Treasury, the Department of Local Government
continues to support municipalities in the management of their finances. These
interventions, which form a critical part of our overall commitment to make
local government work better, are starting to bear fruit as more and more
municipalities show an improvement in the management of their finances.
This year, we are allocating additional resources to the Department of Local
Government to enable it to:
* provide resources for traditional leaders
* strengthening Municipal support programmes
* develop sound and modern disaster management facilities.
The total budget for the Department of Local Government in 2007/08 is R228,4
million. For the 2008/009 financial year, this Department receives R184,5
million, rising to R190 million in 2009/10.
These amounts will be adjusted once detailed business plans for support
programmes for municipalities are considered by the provincial Treasury.
Department of Public Transport, Roads and Works
Improved mobility and physical connectivity will play a vital role in the
competitiveness of the Gauteng City Region. The Gauteng City Region needs to
effectively connect people with places of work, places of recreation and
entertainment as well as other community facilities whilst managing the growth
in car travel and encouraging greater use of public transport and other
sustainable modes.
The Department of Public Transport, Roads and Works has a critical role to
play in this regard. The Department will do this through the integration of the
bus and taxi industries, the implementation of the Gautrain Rapid Rail Link and
public transport legacy projects for the 2010 FIFA World Cup and the
implementation of the Intelligent Transport System.
This department receives additional resources to cater for improvements in
road infrastructure across the province, including R40 million for the
rehabilitation of the R21 road to improve connectivity between Tshwane and the
OR Tambo International Airport. Resources are also set aside to strengthen the
implementation of the Expanded Public Works Programme.
For the 2007/08 financial year, the total budget for the Department of
Public Transport, Roads and Works is R6,5 billion. Of this amount R4,5 billion
goes towards the implementation of the Gautrain project.
We are setting aside a total of R14 billion over the next three years for
the implementation of the Gautrain project. An additional amount of R5 billion
will be raised through borrowing.
The Department of Public Transport, Roads and Works will receive R7 billion
in 2008/09 and once again another R7 billion in 2009/10.
Department of Community Safety
Comrade Speaker, ensuring effective public safety remains one of our key
priorities. In this regard, we will continue to work in a systematic, focused
and determined way to ensure that our people can enjoy both the freedom and
security that they deserve.
As indicated by the Premier we will continue to intensify efforts aimed at
reclaiming our streets from criminals.
As we have said before; what is required to reduce crime effectively, is a
comprehensive integrated strategy that includes a focus on improving the
quality of policing, community mobilisation and partnerships, better
co-ordination of law-enforcement operations by the South African Police Service
and the Metropolitan Police Departments and increased involvement of local
authorities. Towards this objective, we have launched the Gauteng Safety
Strategy.
In its drive to build safer communities, the Department of Community Safety,
will pay attention to the strengthening of Community Policing Forums, the
implementation of the Gauteng Safety Strategy and the establishment of a social
movement against crime.
We have also made provision for this department to cater for policing and
traffic management functions inherited as a result of new demarcations.
To enable the department to carry out its important work and as an
indication of our unwavering commitment to deal effectively with crime in our
province, the Premier in the State of the Province Address indicated that a
world class police emergency response centre to the value of R600 million will
be established by July this year.
We are also this year increasing the budget for the Department of Community
Safety from R222,3 million to R335,4 million. This, Comrade Speaker, represents
an increase of more than 50% in the budget of this Department!
Over the next three years the Department of Community Safety will receive a
total allocation of R948 million.
Department of Agriculture, Conservation and Environment
Part of our responsibilities as a Global City Region is to protect our local
and global environment. This we must do as part of our efforts to improve the
quality of life of our people. In pursuit of this objective the Department of
Agriculture, Conservation and Environment will pay attention to waste and air
quality management.
The Department will also focus on the implementation of the provincial
Agricultural Strategy with particular emphasis on assisting and developing
emerging black farmers.
The total Budget for this Department in the 2007/08 financial year is R294,6
million. It increases to R315,5 million in 2008/09 and to R366,4 million in
2009/10.
Office of the Premier
Comrade Speaker, we are this year allocating additional resources to the
Office of the Premier to continue playing a leading role in co-ordinating the
implementation of the Global City Region initiative, facilitating public
participation in the development of policies and legislation through Izimbizo
and co-ordinating the overall functioning of the provincial government.
The total budget for the Office of the Premier is R121,7 million, rising to
R128,2 million in 2008/9 and to R134,3 million in 2009/10.
Gauteng Legislature
We have allocated additional resources to the Legislature to provide for
spending pressures on overseas travel and visits as well as funding of
political parties. The funding of political parties will allow all political
parties, represented within the Legislature, to engage effectively with their
constituencies. This we believe will deepen democratic participation and
enhance our democratic systems.
The total budget for the Legislature is R164,8 million. In 2008/09 it
increases to R165,4 million and rises further to R173,6 million in 2009/10.
These amounts include R20 million provided for the funding of political
parties for each respective year of the MTEF. These amounts are subject to
change once the House has finalised the funding needs of political parties. The
changes will be effected when we do the adjustment budget later in the
year.
Department of Economic Development
The identification of programmes and interventions that will further
stimulate shared economic growth and job creation is one of the key factors
that contribute towards the development of a successful Global City Region.
Through its agencies, the Department of Economic Development plays a critical
role in achieving this objective.
Indeed the bulk of the funding for this Department will constitute transfers
to provincial agencies namely the Blue IQ, the Gauteng Economic Development
Agencies, Gauteng Tourism Authority, the Gauteng Film Commission and the
Gauteng Enterprise Propeller.
Resources are also set aside to fund the Dinokeng and Cradle of Humankind
World Heritage Site projects. Funding has also been allocated for the
implementation of the Gauteng Provincial Government Precinct.
These agencies and projects form the core of our efforts to make targeted
interventions with a view to accelerate further the shared growth of the
provincial economy.
The Department of Economic Development will also pay attention to
co-ordinating the implementation of the provincial Growth and Development
Strategy, the Broad Based Black Economic Empowerment Strategy and the
provincial Spatial Development Perspective.
To further strengthen the support we are offering to Small, Medium and Micro
Enterprises (SMMEs) we are allocating R231 million to GEP over the next three
years.
The total budget for the Department of Economic Development for the 2007/08
financial is R627,3 million rising to R763,6 million in 2008/09, and rising
further to R843,5 million in 2009/10.
We have not increased funding for the Department of Economic Development in
the 2007/08 financial year. This is because the department together with the
provincial Treasury is currently finalising plans to fund all infrastructure
projects through partnerships with the private sector.
Business Plans for the Blue Umbrella Project, which is a Public, Private,
Partnership project, will be completed by April this year. The setting up of an
Infrastructure Development Fund is expected to be finalised by June this year.
The public sector contribution to these initiatives will be dealt with in the
adjustment budget later this year.
Gauteng Shared Service Centre (GSSC)
The GSSC plays an important role in the creation of an effective government.
And through its progressive procurement policies, it continues to impact
positively on the advancement of Broad Based Black Economic Empowerment and the
development of Small, Medium and Micro-enterprises.
Additional resources are made available to the GSSC for the management and
implementation of the Gauteng online project and the Bana Pele programme as
part of our integrated e-governance approach. Resources are also set aside to
enhance performance audits.
In the 2007/08 financial year, an amount of R200 million is set aside for
the implementation of the Gauteng online project. This project will receive a
total of R600 million over the MTEF period.
The total allocation for the GSSC in the 2007/08 financial year is R1
billion. Over the next three years the GSSC will receive a total of R3
billion.
Gauteng Treasury
Comrade Speaker, we are this year allocating additional resources to the
provincial Treasury to cater for the recruitment of staff. This we are doing
with a view to build and strengthen the capacity of our Treasury to effectively
carry out its mandate of improving financial management and accountability both
at provincial and local government level.
Treasury will work hard to ensure that by 2009, all provincial departments
receive unqualified audit opinions. In the long term our goal is to ensure that
departments receive clean audits.
The budget for the Gauteng Treasury is R104,2 million. For the 2008/09
financial year, the allocation for Treasury will increase to R124,6 million,
rising further to R130,8 million in 2009/10.
As part of our efforts to develop relevant skills that meet the needs of the
provincial economy, the provincial Treasury will this year announce a bursary
scheme to support deserving learners from disadvantaged communities in
furthering their studies at institutions of higher learning.
We are honoured that among us today we have learners from various schools in
Gauteng. We wish to thank them sincerely for gracing this occasion. We are
confident that some of them will benefit from the bursary scheme that the
provincial Treasury will be announcing this year.
Department of Sports, Arts, Culture and Recreation
Additional resources are allocated to this department for hosting Soccerex.
This event, which will bring to our province some of the best known names in
the soccer fraternity, gives us an opportunity to showcase our competitive
advantages on the international stage.
It will strengthen our efforts to accelerate shared economic growth by
attracting investment, tourism, sporting and other major events. In addition,
it will contribute towards building Gauteng as a globally competitive city
region.
Resources are provided for this department to upgrade sporting facilities
not only as part of preparations for the 2010 FIFA World Cup but also as part
of our efforts to make Gauteng the Home of Competitive Sport.
Additional resources also made available to this department to improve
library services across the province and to promote sports and recreation,
particularly among young people.
An amount of R103 million over the MTEF is made available to the department
to fund community library services. This will strengthen infrastructure and
stock of books and also encourage a culture of reading among our young
people.
Comrade Speaker, the Gauteng Youth Commission is now in place. For the
2007/08 financial year, we are setting aside R8 million to enable the Youth
Commission to strengthen its operations and continue to develop and implement
programmes that support youth empowerment.
Once detailed plans are completed and submitted to the provincial Treasury
additional funding will be made available to the Youth Commission. This will be
dealt with during the adjustment budget later in the year.
The total Budget for the Department of Sports, Arts, Culture and Recreation
for the 2007/08 financial year is R296,6 million. In the next three years this
department will receive a total allocation of R934,2 million.
Changes in provincial boundaries
The realignment of provincial boundaries has changed the population profile
of our province. It has resulted in us having to take over the provision of
services that were previously rendered by provinces such as the North West and
Mpumalanga.
To address this challenge an amount of R1,5 billion has been allocated to
cater for existing services and priorities that were transferred to Gauteng.
This will increase to R1,6 billion in 2008/09 and R1,7 billion in 2009/10,
bringing the total allocation to cater for changes in provincial boundaries to
R5 billion.
We wish to reiterate that the provision of services in these areas will not
be disrupted. We wish to emphasise that plans from departments must take into
account backlogs that may exist in the areas we are inheriting.
Improving provincial own revenue
As part of efforts to boost provincial own revenue, motor vehicle licences
will increase by an average of between 5 and 15% in the coming financial year.
This will generate additional revenue of R1,2 billion after direct charges.
We will this year raise an additional R499 million from taxes on casinos and
horse racing. We will also improve our collection efficiency, including for
patient fees, as part of our efforts to boost provincial own revenue.
In addition, we are exploring other mechanisms to further ease the burden on
the fiscus and respond to the pressures placed on our resources by among others
in-migration into Gauteng.
The measures we are investigating include increasing the use of Public,
Private Partnerships and the establishment of an Infrastructure Development
Fund. The Fund will also cater for strategic investment needs of municipalities
in Gauteng.
Conclusion
Comrade Speaker, as we enter the last mile of our journey, we do so
cognisant of the immense challenges that still lie ahead. We are cognisant of
the fact that, two years from now, we will have to return to our people and
report back on how we managed to put together the building blocks that will
continue to bring about a better life for all.
When we began this journey in 2004, we said we are entering into a contract
with our people to create jobs and fight poverty. As we continue to walk this
road we will always be guided by these objectives. We will use the resources at
our disposal prudently and diligently in order to improve the quality of life
of ordinary people, and change their lives for the better.
Honourable Members, all the policies are in place, all strategies are in
place, all business plans are in place and the resources have been made
available to allow us to complete our journey. We must succeed because we do
not have the luxury to fail. We are building a wining nation.
Let us walk this road, together with our people, and make sure that in 2009
we can look back and say: "This was indeed a journey of success!"
Acknowledgements
Comrade Speaker, let me thank Premier Mbhazima Shilowa for his stewardship.
The Premier continues to be the driving force in our ongoing efforts to respond
to the aspirations of the people of Gauteng.
I wish also to thank my colleagues, Members of the Executive Council for the
collective effort they made in the past year as we worked on this budget.
The Director General, Heads of Departments and the Chief Financial Officers
continue to be pillars of strength in our budgetary process � for that we thank
you dearly.
My Head of Department (HOD) for Gauteng Treasury, Ms Nomfundo Tshabalala,
whose past Sundays have been messed up because she had to come to my house to
work on the budget speech, I commend you for your tireless leadership in
steering the Treasury boat.
Let me also thank Jeff Mashele who worked tirelessly with us to ensure that
all the analysis we needed to put together this speech is available. My
gratitude also goes to Dr Julian Naidoo and his team, who made sure that all
relevant documents needed today were done, printed on time and ready to be
presented to the Honourable Members of the House.
Let me also commend Percy Mthimkhulu, my speech writer, for the long hours
he put in working on draft after draft until I was satisfied that it is a final
draft. Dumisani Hlophe, from the Office of the Premier, has always been with us
even on weekends making critical inputs into the budget speech. To him we say;
we appreciate your support.
Our appreciation also goes to the Chairperson of the Finance Committee,
Honourable Bheki Nkosi, for the constructive manner in which you continued to
engage me and my team. We appreciate the support of all members of the Finance
Committee. Your wisdom has brought considerable strength to our budgetary
process.
To Honourable Members of this House we say thank you for the oversight work
you are doing on the budget.
My appreciation also goes to my wife Manzi for her tireless support
especially when our house was turned into a budget office on weekends. Let me
also thank family and friends for their support and encouragement.
Once again lets us make sure that this indeed will truly become a journey of
success.
I now present to the Speaker the following documents for consideration by
the House:
* The Appropriation Bill for 2007
* The Explanatory Memorandum to the Bill
* Budget Statements 1,2 and 3
* The Explanatory Memorandum to the Budget Statements
* The Budget Booklet
* A copy of my speech.
Ke a leboga.
Issued by: Department of Economic Development, Gauteng Provincial
Government
26 February 2007
