S Cachalia: Limpopo Prov Budget 2007/08

8 March 2007

Honourable Speaker
Honourable Premier
Distinguished colleagues in the Legislature
Stalwarts and veterans of our struggle
Speakers, mayors, councillors and managers of municipalities
Esteemed traditional leaders here present
Leaders of the African National Congress (ANC) and MDM structures
Leaders of the trade union movement
Leaders of religious organisations and churches
Leaders of opposition parties
The Director-General (DG) and senior officials in our provincial
administration
Leaders of chapter nine and ten institutions
Youth, women, business and community leaders in our midst
Representatives of the media
Distinguished guests
Comrades
The people of Limpopo

Forty six years ago, on December 11, 1961 when Chief Albert Luthuli
delivered the Nobel Lecture at the Oslo University he said:

"In economic matters we will be satisfied with nothing less than equality of
opportunity in every single sphere and the enjoyment by all of those heritages
which form the resources of the country which up to now have been appropriated
on a racial 'whites only' basis. In culture we will be satisfied with nothing
less than the opening of all doors of learning to non-segregatory institutions
on the sole criterion of ability. In the social sphere we will be satisfied
with nothing less than the abolition of all racial bars."

He continued by saying, "We do not demand these things for people of African
descent alone. We demand them for all South Africans, white and black. On these
principles we are uncompromising."

Honourable Speaker

We are where we are today, because our people never gave up on this vision
nor did they compromise on those principles even under the most difficult
conditions. They internalised this vision as their guiding light. They had an
undying spirit of defiance.

We, the people of South Africa and Limpopo, have a long tradition of
struggle for our national rights. Our history is one of active and relentless
opposition to domination of protest and refusal to submit to tyranny and we
never ever doubted that the day would come when we will be the masters and
architects of our own destiny. We may not have known the date and the hour, but
as the late O R Tambo stated in 1987 at the LA Trobe University in Australia
where he motivated for the implementation of sanctions against the apartheid
regime:

"We have never doubted that in South Africa justice will triumph. This
conviction sustains us, keeps us on the move. It enables us to defy
difficulties, to defy suffering and misery, to defy pain, to defy death but now
we can identify the light at the end of this dark tunnel. We accept that before
we reach the point where this light shines, we are going to have to go through
gruelling darkness guided only by the vision which we can now delineate of a
non-racial, democratic, united South Africa of South Africans living together
as one people under one government in one un-fragmented country."

This, honourable Speaker, was the intensity and character of the resolve of
the people who fought for the freedom we enjoy today. Our gathering in this
fashion, as free people who can determine their own destiny, is only possible
because the people of this country and province, our heroes and veterans, some
of whom we are still fortunate to have with us in this House today never
betrayed the revolution. Let us not forget that comrade Bra Ike stared death in
the face when he was sentenced to death by hanging by the illegitimate regime
of Ian Smith in the former Rhodesia. Against seemingly overwhelming odds they
sought the goal of a fuller life and liberty, striving with incredible
determination and fortitude for the right to live as free men and women. They
refused to be silenced!

How do we protect this precious gift of freedom? How do we ensure that each
step we take forward and every achievement we chalk up is not cancelled out by
complacency and self interest? How do we ensure that in "economic matters we
ensure equality of opportunity and enjoyment by all black and white of the
resources of the country"?

Last year, our Minister of Finance, Trevor Manuel, commenced the delivery of
his 2006 budget speech by quoting the profound words of Ben Okri, who
wrote:

"There are no joys without mountains having been climbed. There are no joys
without the nightmares that precede them and spring them into light."

In tabling that budget proposal, he also placed before the nation an account
of the mountains we have climbed as well as the frontiers that still remain
unchallenged. He demonstrated how our budgets are closely bound with our
journey to freedom, with our concept of democracy, with the progressive
realisation of social and economic freedoms to which we aspire, with our
understanding of the service delivery obligations of government alongside the
development impetus of active citizenship.

Two weeks ago when he tabled the 2007 budget speech the Minister chose as
his theme the important idea which is fundamental to our vision of building a
people centred society contained in the words "human life has equal worth".

In this context he quoted the British writer, Will Hutton, who wrote, "The
foundation of human association is the idea that human life has equal worth and
human beings are equally entitled to political, economic and social rights
which allow them to choose a life they have reason to live motho ke motho ga
ana bosehlana (a human being is a human being, there is no lesser human
being)."

The Minister stated that, "The idea that human life has equal worth and that
this is the core value that unites us, invites us to ask whether we have done
enough to give practical effect in South Africa today to our shared humanity.
Have we acted in a manner that shows that human life has equal worth? Or do we
still live in a society where the shadow of history dominates over the
opportunities of an open society."

This is not inconsistent with what President Mbeki said in his State of the
Nation Address (SONA), "None of the great social problems we have to solve is
capable of resolution outside the context of the creation of jobs and the
alleviation and eradication of poverty and therefore the struggle to eradicate
poverty has been and will continue to be a central part of the national effort
to build the new South Africa. The central task of the National Democratic
Revolution (NDR) is to construct a people centred society that will in practice
demonstrate that it values every human being on an equal basis determined that
each should enjoy a life of dignity, regardless of race, colour, gender, age or
belief."

Honourable Speaker

We, therefore, have to work tirelessly as a province to push back the
frontiers of poverty, recognising that no people can be truly free until and
unless they have cast aside the shackles of poverty and underdevelopment. We
must as the Premier mentioned in the State of the Province Address (SOPA),
"Build up momentum to deliver on the objectives of the Provincial Growth and
Development Strategy (PGDS)."

This we must do with greater determination and focus to realise the
potential of our economy to meet the needs of the poor, particularly those
living in the rural areas. We need to act in unity and in a people's contract
to ensure that this progress is not only sustained but elevated to a higher
level during the coming financial year and the Medium Term Expenditure
Framework (MTEF).

In order to achieve this we may have to, among other things, assess and
endeavour to change the role and contribution we may be making towards the
creation of what has become known as market fundamentalism reducing complex
social, economic and political problems to the dictates of the market where
everything has to be viewed by whether or not it has a market value.

In the fourth annual Nelson Mandela Lecture President Thabo Mbeki noted
among numerous other things that, "Greed has gripped the South African society,
the practice of pursuing accumulation above all else and at all cost is driving
a section of the population to accumulate ever increasing assets."

The President asserted that, "The ascendancy of greed, smothered social
cohesion and blocks mutually beneficial human solidarity. Human relations are
reduced to market relations. Values of the entire society suffer untold harm in
an environment in which greed has been allowed to take a pole position."

The President's assertion is consistent with what George Soros wrote in an
article entitled "The Capitalist Threat", way back in 1997:

"Unsure of what they stand for, people increasingly rely on money as the
criterion for value. What is more expensive is considered better. The value of
work of art can be judged by the prices it fetches. People deserve respect and
admiration because they are rich. What used to be a medium of exchange has
taken the place of fundamental values, reversing the relationship postulated by
economic theory. What used to be professions have turned into businesses. The
cult of success has replaced a belief in principles. Society has lost its
anchor."

Where in this type of society do we locate the notion of human life has
equal worth?

Honourable Speaker, we cannot allow anything to undermine the strides we
have made towards the total liberation of all our people. All of us must work
even harder to further transform our province and country, fundamentally. The
accomplishment of this task needs us to be made in the metal of true organic
revolutionaries. It requires of us to be of the same character and quality as
the stalwarts and veterans we spoke about earlier. The spirit of defiance and
the refusal to submit to tyranny must therefore continue!

In the end, what we are about is a revolutionary act for the creation of a
new society. Those of us who have no choice or have chosen to be agents of
change will indeed at all times have to ask ourselves what more can we do, what
more can we contribute to bring about the change we want to see?

When we talk about change, we speak as we must do about the number of jobs
created, about the number of houses built, about the provision of water,
sanitation and electricity, about the lives we sustain through the social
security net, about the lives we sustain and save through the free access to
antiretroviral treatment, we speak about improving the quality of public
schools and about the rate of economic growth.

Honourable Speaker

The change we speak about must mean that all of us will do more to rewrite
the figures contained in the latest provincial profile released by Statistics
South Africa (Stats SA) which indicate that:
* in Limpopo approximately 49% of households use pit latrine toilets without
ventilation
* of the working age population in Limpopo about 28,2% were employed in 2004
compared to 39,7% nationally
* our matric pass rate is in the lower ranks
* Limpopo has the second lowest literacy rate of all provinces
* only 2,2% of households have access to a computer.

These statistics are alarming but this should not serve to scare us nor
should it be construed to deny the obvious fact that our government has
achieved a lot over a short period. The fact of the matter is that there are
encouraging signs that suggest that even greater things can be achieved if we
continue to work together. Our attention must therefore be clearly focused on
changing the lives of our people for the better. Nothing short of this will be
adequate.

We table this year's budget satisfied that we have registered significant
gains in our ongoing effort to deliver on the vision of a better life for all
and the pledge we made to our people in 2004. Through this budget, we seek to
expand on our gains and underscore our commitment to create a government that
truly and deeply cares for its people.

Achievements for the current financial year

Honourable Speaker

Before we table the budget allocations for the next financial year, I would
like to briefly touch on a few of our achievements towards improving the
quality of our people's lives during the current financial year, 2006/07:

* 282 965 households received free basic electricity which is more than
double the number (120 424) that received this benefit in 2005/06.

* 1 020 905 households have now been electrified.

* 977 223 households enjoy free water supply and 534 548 have access to
sanitation.

* 35 548 houses were completed over the MTEF period.

* 70 schools for children studying under trees and storm damaged schools
have been completed.

* The revitalisation of the Lebowakgomo, Jane Furse, Nkhensani and Dilokong
hospitals has been completed.

* 2 500 schools in quintile one and two have been declared no fee schools
and they receive a per-learner allocation of R319 excluding learner support
material per annum.

* The Department of Education absorbed 8 651 temporary teachers into
permanent positions and trained 7 000 teachers on the national curriculum
statement.

* 1,14 million learners benefit from the national school nutrition programme
in the province.

* The provincial crime rates have reduced from 118 479 cases to 103 880
cases between the 2003/04 and 2005/06 financial years.

* The Department of Health purchased 100 ambulances, 12 paramedic response
vehicles, 20 scene management and 10 rescue vehicles as well as six multiple
patient carriers. The Department also appointed 914 emergency care
practitioners.

* The number of people who got access to HIV and AIDS treatment increased
more than six times over the MTEF period from 1453 in 2004 to 8 907 in
2006.

This is why I said the figures released by Stats SA which we quoted above
should not scare us. After all we only quoted the negative aspects of that
report intended solely to remind us of the areas that still require our
attention.

The 2007/08 budget framework

Honourable Speaker, our budget framework is as follows:

The equitable share for the province prior to the new provincial demarcation
for the MTEF period was R22 992 613 000 for 2007/08, R25 725 665 000 for
2008/09 and R27 655 090 000 for 2009/10.

The amounts were adjusted downwards as a result of the demarcation process
by R1 075 702 000 to R21 916 911 000 in 2007/08, R1 272 162 000 to R24 453 563
000 in 2008/09 and R1 367 574 000 to R26 287 516 000 in 2009/10 before any
additional allocations to provinces were considered.

When the provincial fiscal framework was finalised, the provincial
allocations were adjusted upwards by R422 627 000 in 2007/08, R783 805 000 in
2008/09 and R1 861 345 000 in 2009/10.

The total estimated receipts for the province consist of:

Equitable share: R22,339 billion
Conditional grants: R2,504 billion
Own revenue: R0,468 billion
Total: R25,312 billion

Honourable Speaker, the provincial budget will increase by 16,9% in the
2007/08 financial year. Based on the MTEF baselines the provincial revenue will
pick up by 18,3% in 2007/08. However, our revenue is still unacceptably low.
The Provincial Treasury must play a leading role in finding strategic
mechanisms to maximise our revenue collection and identify new sources of
revenue as a matter of extreme urgency. We need to review our tariffs all
round, e.g. liquor licences, motor vehicle licences, traffic fines and hunting
licences.

The equitable share comprises the bulk of the provincial allocation at
88,3%, the conditional grants 9,8% whilst own revenue accounts for 1,8% of the
total budget.

Expenses by economic classification

Honourable Speaker and honourable members of the House

As indicated the Bill before this House seeks to appropriate R25,312 billion
for the 2007/08 financial year. The MTEF estimates for allocation reflect
R25,312 billion for the 2007/08 financial year, as well as R28,648 billion for
2008/09 and R31,755 billion for 2009/10.

The current expenditure accounts form the largest year on year allocation.
It accounts for R20,266 billion, which is about 80% of the total expenses
proposed for the 2007/08 financial year. In this proposed budget allocation,
compensation of employees receives an allocation of R15,852 billion that is
62,62% of the total provincial budget.

Transfers and subsidies receive an allocation of R3,336 billion which is
equal to 13,17% of the budget.

For the 2007/08 MTEF, R12,670 billion has been allocated for infrastructure
development, R3,586 billion for 2007/08, R4 304 billion for 2008/09 and R4,780
billion for 2009/10. This represents an infrastructure allocation increase of
31% as compared to the 2006/07 financial year.

The most critical challenge in this area is the serious concern of under
spending. As the Premier mentioned in his SOPA, "Our medium term review
identified weaknesses in planning and capacity to spend. This has led to delays
in the implementation of many important infrastructural projects."

A province's ability to spend is a key determining factor in as far as
motivation for future allocations is concerned. Under spending carries serious
consequences. In the 2005/06 financial year, R318 9 million meant for the
provincial infrastructure grant was suspended from the province due to under
spending only R218,9 million of that amount was released in the 2006/07
financial year. So we effectively lost R100 million which is unacceptable for a
province as poor as ours. The poor of our province cannot wait for delivery
while we sit on money like a hen on eggs.

It is obvious that there are gaps within the system our planning processes
and abilities are weak. Undertaking project planning, design and procurement in
the same year leaves departments' infrastructure delivery programmes vulnerable
in cases of contractor underperformance, heavy rains, short term shortage of
building material, etc.

There is, therefore, a need to change the current system and build in a
degree of flexibility to ensure that these shortcomings are addressed. It is
encouraging to note that capacity building within departments is being given
priority. Technical expertise are being sought to boost infrastructure delivery
in departments. For example, the Department of Education has engaged the
services of a team of two technical experts on a short-term contract to support
infrastructure delivery in the Department while they work on filling their
vacancies. The Department of Local Government and Housing has set up a Project
Management Unit (PMU) to drive infrastructure delivery in the Department.

As a province, we face serious backlogs in terms of infrastructure. We need
good infrastructure in order to be competitive. It must be remembered that,
notwithstanding the fact that we are one country, we face serious competition
from other provinces with respect to attracting investors to our province
particularly from those provinces with a similar economic profile as ours
investors will not come here if our infrastructure is inadequate because this
will raise the cost of doing business in the province.

However, we are informed that there are presently investments worth no less
than R61 billion that have been made through various private sector interests
in our province. This gives a welcome impetus to the objectives of our PGDS.
Our commitment to provide the necessary infrastructure such as roads, improving
and expanding our rail network and the provision of water will therefore also
assist and compliment the private sector investment agenda.

If our capacity to spend on capital projects does not improve, we stand to
lose funding as was the case in 2005/06. Looking at it positively, if we
improve our performance in this area, we have an opportunity to position our
province as a beneficiary of the funds that will be redirected from other
provinces that cannot spend.

Provincial Treasury will play a leading role in ensuring that departments
are geared to deliver on their infrastructure delivery mandate. Section 14 of
the 2007 Division of Revenue Bill, requires the compulsory participation of
relevant departments (health, education, roads and public works) in the
Infrastructure Delivery Improvement programme (IDIP). These departments can
only be exempted from participation in the IDIP by the National Treasury.

IDIP is a programme aimed at improving the delivery of infrastructure and is
sponsored by national Treasury, national Department of Public Works,
Construction Industry Development Board (CIDB) and the Development Bank of
Southern Africa (DBSA).

It is our intention to ensure that IDIP best practices are adopted across
the provincial government. We have already set up an IDIP Steering Committee at
MEC level to drive the implementation of the programme, this will be supported
by a programme management committee at technical level.

Honourable members may remember that the national Cabinet has approved the
'alignment model for the infrastructure delivery cycle and the budget cycle'.
This model is aimed at ensuring that government departments deliver on their
projects according to their plans and that the growing phenomenon of roll overs
is gradually discontinued. It may be useful to share with members, in part, the
statement of the Cabinet meeting of 21 February 2007 on infrastructure:

Cabinet approved a framework to align infrastructure delivery cycles with
the MTEF budget cycle in order to improve planning, implementation and better
cash flow management that would among other things deal with the fourth quarter
expenditure spike. This framework accommodates the long lead time before
infrastructure projects reach the construction stage.

The infrastructure delivery cycle will be amended to include an
Infrastructure Programme Management Plan (IPMP) and an Infrastructure Programme
Implementation Plan (IPIP) which will be mandatory for all departments. Best
practice approaches will be adopted to include budget cycles that commit funds
for the duration of the project without leading to the so-called roll overs.
This framework will require the appointment of appropriately skilled built
environment professionals across all relevant departments, provinces and local
government.

The Provincial Treasury is committed to this new approach and to this end
will be enforcing Section 40 of the 2007 Division of Revenue Bill, which
requires that:
* by 31 July 2007, departments must submit infrastructure plans to Provincial
Treasury in the required formats
* departments must budget for newly created or upgraded infrastructure.

The planning horizons of departments will therefore be extended meaning that
instead of planning, tendering and implementing projects in the same financial
year, these project phases will be spread over three years to ensure that no
project gets delayed prior to its commencement due to tenders being awarded
late, plans and designs not being finalised on time, etc.

Importantly according to Section 14(3)(a)(ii) of the aforementioned Bill, a
province in allocating the infrastructure grant to departments may, where a
receiving provincial department lacks capacity designate an amount not
exceeding four percent of the allocation for acquiring such capacity to
facilitate delivery.

However, Section 14(3)(b) places an obligation on departments by demanding
that the percentage referred to in subsection (3)(a)(ii) must be informed by a
capacity plan prepared by the receiving provincial department and approved by
the provincial treasury.

Therefore, the lack of capacity can also no longer be accepted as a valid
reason for under spending. Departments must invest time and effort into proper
planning and effective management.

Skills shortage has been identified as one of the major constraints to the
acceleration of development in our country and Limpopo is no exception. The
issue of skills shortages is a recurring theme in all major discussions that
centre on the PDGS. The low level of skills serves to perpetuate the high
levels of unemployment and poverty. It is for that reason that the Accelerated
and Shared Growth Initiative of South Africa (AsgiSA) has prioritised skills
development.

The national budget has also proposed generous allocations to the Department
of Education budget vote. For this reason, in this budget Further Education
Training (FET) colleges in Limpopo shall be made to respond positively to the
requirement of skills in the job market provided by the growing economic
sectors in the province. Government is, therefore, poised and it is hoped that
the relevant private stakeholders will equally take up the challenge.

The province has in the past few years experienced relatively high levels of
economic growth with only slight improvement in income levels. However, the
levels of unemployment have remained unacceptably high at 35%. Though the
economy is still dominated by the primary industry namely the mining sector,
growth levels in the secondary industry, wholesale and retail trade, hotels and
the leisure and tourism trade are beginning to register impressive growth
levels since 2004. These sectors will no doubt improve the job creation
capacity of the economy in line with the PGDS.

Expenses allocation per sector

Social sector

The social sector accounts for R17,284 billion, which is 75,8% of the
R22,339 billion equitable share. Of the R17,284, education accounts for R11,351
billion, health R5,456 billion, social development R439 million and safety,
security and liaison R37,7 million.

Department of Education

Department of Education's share of the provincial equitable share is 49,8%
or R11,351 billion in 2007/08 and it grows to R12,918 billion and R14,373
billion in the 2008/09 and 2009/10 financial years, respectively. This
allocation is almost two percent higher than what education received last year.
We hope that this allocation will deal with the challenges facing the province
with respect to the quality of education in order to reverse the declining
matric results in the province and continue to produce high quality
matriculants with university entrance particularly in maths, science and
technology.

The budget is mainly to cater for the scaling up of the remuneration
packages of school managers (principals), general salary increases, provision
of clerical staff for schools and district offices, improving remuneration
levels for teachers, teacher assistance especially in the foundation phase and
the provision of targeted incentives for teachers in critical subjects.

The additional personnel budget to fund the above and other personnel
pressures in education is R170,871 million in 2007/08, R334,450 million in
2008/09 and R671,520 million in 2009/10. The budget further provides for 2 526
no fee schools. R355,5 million has been set aside for this purpose in 2007/08,
R591,1 million in 2008/09 and R683,2 million in 2009/10. In addition, R819,313
million has been set aside for learner teacher support material over the MTEF
period which excludes the allocation to no fees schools.

Further, the Department will use the budget to intensify training on all
aspects of the national curriculum statement and introduce compulsory winter
and Saturday schools for learners at schools that obtained less than 70% in
last years senior certificate examinations.

An amount of R43 million will be spent this year and R225 million over the
MTEF period to construct laboratories, workshops and resource centres that will
enable learners in FET colleges to gain practical exposure to the subjects that
have been prioritised by the PGDS and AsgiSA.

Department of Health

Department of Health gets an allocation of R5,456 billion or 23,9% of the
provincial equitable share in 2007/08. The budget for health is mainly to
provide for the review of health professionals' remuneration. The remuneration
review targets professional nurses in the first year of the MTEF, doctors,
dentists and pharmacists in the second year and various other professional
groups such as physiotherapists and occupational therapists in the third year.
We have provided R144,1 million in 2007/08, R189,9 million in 2008/09 and R282
million in 2009/10 for these remuneration reviews.

A further R273,8 million has been set aside over the MTEF for the
recruitment of critically needed health professionals.

The Department's non-personnel priorities include the extension of air
medical services and the expansion of the emergency medical services. These
will partly contribute towards the province's 2010 FIFA World Cup
readiness.

We are also aiming to intensify the implementation of the comprehensive
response to HIV and AIDS following the launch of the framework for the
strategic plan on World AIDS Day last year.

To this end we will be allocating conditional grants totalling R689,970
million for HIV and AIDS programmes in the MTEF. The social cluster must ensure
that the departments of education and health, as the recipients of HIV and AIDS
allocations, co-ordinate their programmes and interventions in a way that will
maximise the impact and avoid duplications.

Department of Social Development

Department of Social Development receives R439 million or 1,9% of the
provincial equitable share in 2007/08 and it grows to R754,9 million or 2,6% of
the provincial budget in 2009/10.

The budget provides for the recruitment of social workers and social
auxiliary workers. The non-personnel budget is mainly to cater for the delivery
of social welfare services and to increase support for children's homes as well
as the implementation of the Social Development Bill, the Child Justice Bill,
the Children Bill and the Older Persons' Bill. The challenges of substance
abuse will also receive the needed attention.

Department of Safety, Security and Liaison

Department of Safety, Security and Liaison receives an equitable share
allocation of R37,7 million in the 2007/08 financial year which is a 23%
increase from last year's R29 million. The Department gets a further R78,8
million for the second and third years of the MTEF. This we have done despite
the fact that our province is one of the safest provinces and the annual number
of reported cases is on the decline.

The budget is mainly to fund the provincial crime prevention strategy,
improve the organisational structure, and establish fully-fledged and
functional victim empowerment programmes.

Community mobilisation against crime is key to the successful implementation
of the Department's crime prevention strategy (PCPS). Together with other
departments and role players the Department must ensure that, among others, our
schools and farms are safe. The resolutions of the recent Ritual Murder Summit
will also form an integral part of the PCPS.

We must emphasise though that the police alone will never succeed in the
total eradication of crime without the assistance of the community. Let us,
therefore, play our part and make our contribution towards keeping Limpopo
among the safest provinces in the country.

Economic sector

The economic sector accounts for R4,296 billion or 18,8% of the equitable
share. Of this amount economic development, environment and tourism accounts
for R759,6 million, roads and transport accounts for R1,870 billion,
agriculture accounts for R966,5 million, public works accounts for R601,6
million and sport, arts and culture accounts for R98,3 million.

The higher allocation to this sector remains the provincial goal to grow the
economy and create sustainable jobs. We are proud that Limpopo recorded an
average annual economic growth rate of four percent between 1995 and 2005. This
makes us the second fastest growing economy in the country and places us above
the national average of 3,7%.

Department of Economic Development, Environment and Tourism

Department of Economic Development is allocated R759,6 million in 2007/08,
mainly, to provide for the planning of the International Convention Centre
commercialisation of nature reserves, bolstering of provincial tourism and
Small, Medium and Micro Enterprise (SMME) development.

Our efforts at SMME and Black Economic Empowerment (BEE) development and
small business growth must be geared towards lifting our historically
disadvantaged individuals (HDIs) out of a cycle in which they are only involved
in providing, catering, security, printing and cleaning services. Through the
procurement and our supply chain management module we need, as government, to
work out ways in which our public entities can contribute to the upliftment of
SMMEs and move them into the higher levels of our economy. Our various chambers
of business can also play a meaningful role in this regard.

The Department will avail R25 million towards the establishment of a
provincial BEE fund. Absa made a commitment to contribute R25 million towards
this fund, provided that the provincial government matches its commitment. This
R50 million fund will certainly go a long way towards assisting HDIs who find
it difficult to access funding for their business ventures from the banks.

The Department will also spearhead the challenge of enhancing international
economic relations by developing and implementing an export programme on how
best the province can access international markets. To this end, the province
will be participating at the Africa and international pavilions to showcase the
province's products and to promote investment opportunities.

The Department will also enhance integration and implementation of cross
border projects including the establishment of cross border tourism marketing
routes.

Further, we are revisiting our financing strategies to ensure that our
people have greater access to funding. However, the Department and the relevant
agency must ensure that mechanisms are put in place to recover the money spent
on funding qualifying business ventures so that we can broaden the impact of
our funding initiatives by assisting many more needy business people.

Department of Roads and Transport

Department of Roads and Transport's share of the provincial equitable share
is R1,870 billion or 8,2% of the provincial equitable share in 2007/08. The
budget is mainly to provide for tarring of economic roads, rehabilitation and
maintenance of roads and the construction of new roads. The budget further
caters for traffic and car licence enforcement, subsidies to bus operators and
the extended public works programme.

Department of Public Works

Department of Public Work's share of the provincial equitable share is
R601,5 million or 7,58% in 2007/08. The budget is mainly to cater for the
provision of infrastructure to client departments and the expanded public works
programme. The Department will also provide for poverty alleviation skills
transfer and job creation, particularly to the youth.

Consistent with the provisions of the Expanded Public Works Programme
(EPWP), public works will have to employ labour intensive practices in the
development and maintenance of the infrastructure programmes of government.

Department of Agriculture

Department of Agriculture's share of the provincial equitable share is
R966,5 million to cater for the funding of smallholder/irrigation schemes and
the provision of supporting infrastructure to make irrigation schemes
functional.

The Department will be developing an aquaculture strategy in the next
financial year with a view to introduce commercial aquaculture production
amongst emerging farmers. Plans are also underway to establish an Agribusiness
Development Agency focusing on farmer training, market information management
and institutional development in the next financial year.

The budget further provides for land care and farmer support during drought.
Some farmers have already started to shout for assistance as a result of the
acute drought that is gripping the province. This money will therefore come in
handy to assist the affected farmers as far as possible.

Many residents of Polokwane have already experienced the difficulty of
making it through the day without a drop of water from their taps. The review
of 27 February carried a front-page article on the water shortages in
Polokwane. In the article a resident of Ster Park was quoted as saying,
"Finding a place to take a bath has been the weekend's top priority on her to
do list." She and her family were apparently not able to do their washing or
clean the dishes, and they used water from the swimming pool to flush the
toilets. This situation may get even worse unless the municipality finds ways
to manage the shortages and all of us work together to save the little water we
have available. Unfortunately, we cannot budget for rain. If this was possible
we would have made provision for it in our MTEF allocations.

Department of Sport, Arts and Culture

Honourable Speaker

Department of Sport, Arts and Culture is allocated R98,3 million which will
grow to R105,7 million and R115,3 million in the second and third year of the
MTEF. The budget is mainly to cater for major national and provincial cultural
events such as Freedom Day, Heritage Day, Africa Day, Day of Reconciliation and
the Mapungubwe Arts Festival.

In response to the Premier's directive during the SOPA, the Department will
begin the process of erecting the heroes' acre that will be home to the
departed stalwarts of the liberation struggle. The Department will also
intensify its programme of documenting the role played by our people in the
fight against colonialism.

The Department is also committed to ensure that the annual Mapungubwe Arts
Festival is greatly improved administratively for it to meet its intended
objectives. Treasury is ready to assist the Department to ensure that the
shortcomings of the past are overcome. We have to tighten our efforts around
the procurement process, project management, sponsorships, proper branding and
positioning of the festival as the main arts and culture event of the
province.

The budget will further cater for library services, that is, the provision
of books and materials to regional and local libraries amounting to R124,9
million over the MTEF. We must use this allocation to promote readership amidst
the ever diminishing culture of reading within our communities. It will also
provide for mass sport and recreation participation programmes like club
development, school sport and Siyadlala amounting to R111,5 million over the
MTEF.

Governance and administration sector

The governance and administration sector accounts for 5,4% of the budget
which is R1,228 billion. From this amount the Office of the Premier receives
R448,4 million, the Legislature gets R100,2 million and Provincial Treasury
receives R393 million. The allocation to the sector increases in real terms
over the MTEF to deal with the challenges facing the institutional efficiency
of government, more especially the new Traditional Leadership Act and
provincial audit performance.

Office of the Premier

The Office of the Premier's allocation is R448,4 million for 2007/08 to
cater for the Premier's special programmes including youth, gender, disability,
etc, running of the traditional affairs, community development workers and
improving the co-ordination of the Executive Council (ExCo) and the
clusters.

Legislature

The Legislature's share in respect of the provincial equitable share is
R100,2 million for 2007/08. The budget will be utilised for the running of the
Provincial Legislature, strengthening public participation and the oversight
functions.

Department of Local Government and Housing

Department of Local Government and Housing's share of the provincial
equitable share is R393 million or 1,7% for 2007/08. The Department receives a
conditional grant of R1,1 billion over the MTEF to complete the incomplete
housing block projects in the province. For this year the department will get
R325,817 million towards this objective. We certainly hope that this will bring
relief to the many people who have been waiting for a long time to move into
their houses. However, we must state that we have to ensure that we get it
right this time. It will be a serious indictment on all of us if we were to
find ourselves in a similar situation in future.

The Department's budget will mainly focus on the comprehensive plan for the
creation of sustainable human settlements. The Department is implementing a
turn around strategy to fast track housing delivery in the province. The
strategy entails the following elements:
* forward planning
* unblocking blocked projects
* fast-tracking and eradication of informal settlements
* partnering Public Private Partnerships (PPP)
* contracting strategies mix of highly capacitated and emerging
contractors
* development of integrated sustainable communities
* settlement upgrading in line with the millennium development goals.

A crucial element of the strategy is the interaction between the Department
and the beneficiaries, which is why it is so important for all affected parties
to direct all housing related queries to the toll free number of the housing
consumer call centre.

The Department must also move with speed towards the eradication of the
bucket system in formal settlements and the fast tracking of the provincial
sanitation programme.

An amount of R46,5 million has been earmarked for sanitation, water and
electricity projects in Moutse West. The procurement processes has already
started in respect of some of these projects.

The processes of Integrated Development Planning (IDP) Local Economic
Developments (LEDs) and budgets of municipalities must be closely scrutinised
and monitored as they are an important and necessary component of our PGDS. We
must ensure that, as provincial departments, we provide the various levels of
capacity within the municipalities to develop sustainable strategies and
realistic implementation plans. The LEDs must be closely linked and aligned to
both our national and provincial strategies. Municipalities must be able to
discharge their economic responsibilities.

Local government's share of revenue raised nationally in respect of the
financial year 2007/08 is R20 675 620 billion. The municipalities in the
Limpopo Province receive R1 820 529 billion of the total national revenue
raised or 8,8 in percentage terms. The share to the province is further broken
down by district municipality as follows:
* Greater Sekhukhune: R325 703 million
* Mopani: R396 389 million
* Vhembe: R395 753 million
* Capricorn: R449 430 million
* Waterberg: R253 254 million

Provincial Treasury

Provincial Treasury's share of the provincial equitable share is 4,2% in
2007/08, 4,1% in 2008/09 and 4% in 2009/10. The budget for the Treasury will be
utilised for the implementation of the Public Finance Management Act (PFMA) and
Municipal Finance Management Act (MFMA) and to offer support to departments and
municipalities in terms of planning, monitoring, capacity building and
financial reporting. The Department must also provide financial system support
to the province and monitor the management of provincial assets and supply
chain management.

Honourable Speaker

With these allocations we have to bring about tangible changes to the lives
of our people. We have to focus our attention on planning better and pursuing
our plans vigorously. Treasury and the Legislative committees must find synergy
in their monitoring and oversight roles and work together towards improving
service delivery whilst reducing the unacceptably high incidences of financial
irregularities and negligence. As members of the Legislature, we must also be
seen to actively assist departments to do more, better. We must all work
together and towards the same objective in the interest of our province. The
high number of qualified financial reports and the increasing number of
suspended officials for misusing public funds must be relegated to the past
very urgently. We must not allow greed and avarice to deprive our people of the
services they so desperately need and depend on.

The increase in the budget is a clear indication of larger and stronger
spending on the part of provincial government. Minister Manuel has indicated
that over the next three years government expenditure nationally will be over
R2 trillion. Limpopo Provincial Government's share of that will be
approximately R80 billion for the next three years.

The provincial government, therefore, will continue to be an important
player in our economy as employer and as a purchaser of goods and services and
a client to the many interests that do business in Limpopo. We therefore have
to assert our significance in the economic activity of the province by
conducting our affairs with the necessary honesty and integrity. We have to
uproot corruption at every level both in government and in the private sector
and display the framework within which prudent fiscal governance must
operate.

To achieve the 6% growth in the national economy by 2010, to half the
poverty figure and unemployment by 2014 as stated in the AsgiSA document, to
fight poverty and create jobs we need to play our part in reducing the many
constraints that stand in our way as provincial government.

We have to, as indicated earlier on, continuously build and increase
capacity and skills within all sectors of government at both provincial and
municipal level. If it is true that motho ke motho ga ana bosehlana and if
human life indeed has equal worth, then we must ensure that the money we spend
on every school we build, the money we spend on every clinic and hospital we
construct, the money we spend on feeding each and every deserving learner is
worth every cent. Every cent must therefore have equal and corresponding worth!
The R1 000 I spend as a private citizen on an item cannot become R10 000 just
because I am government. Every cent must have equal worth.

Government, individuals, communities and business must join the struggle and
continue to contribute meaningfully and tirelessly towards the eradication of
poverty and unemployment.

We must also not allow ourselves to become like those who, in the words of
the Minister of Defence during the debate on the State of the Nation Address,
"…have contributed nothing or very little to the struggle to end the very long
years of oppression, who will stride down the sidewalk as we march along the
long and difficult highway to the better life to which we are committed,
forever mocking, forever throwing our inevitable temporary failures at our
faces, forever triumphant when we falter, forever finding fault even with the
way we walk, always predicting that nothing but despair will be our reward
whenever we come to the end of our long journey to that new South Africa that
will be free of everything that is ugly and repulsive in human society."

We must speak together of freedom and act in partnership to realise the
happiness for all that should come with liberty. Let the joy and happiness of
those who strike, extract and benefit from the mineral wealth from the depths
of mother earth's Limpopo be shared by the young boy and girl child who stand
above her oblivious to the wealth under their feet. We must work together to
build a province defined by a common dream.

You may have noticed how unfamiliar and probably nervous I looked from this
podium today. I am only in Treasury for a mere three months. This has been my
first budget speech. I am sure that all the mistakes you picked up today will
improve as time goes. Allow me therefore to thank my party, the African
National Congress (ANC) and the honourable Premier for deploying me into this
very challenging position. I am deeply grateful for the opportunity I have,
within the leadership collective, to make my minimal contribution towards the
advancement of our province and its beautiful and humble people. With all the
support I am getting, I have no doubt that we will succeed.

May I also use this opportunity to thank the honourable Joyce Mashamba and
comrade Thaba Mufamadi for the foundation they laid in the Department. Their
council and guidance really assisted me tremendously. The former head of
Department, Mr Mphahlele, who is an official in the project management unit
(PMU) for the information provided on certain matters on the budget.

This budget was made possible by the hard work and inputs from a number of
stakeholders and role players. I would like to extend my sincerest gratitude to
my colleagues in the Legislature and the ExCo, members of the various
committees in our Legislature, in particular Treasury and Standing Committee on
Public Accounts (SCOPA) for their contributions.

We also want to declare our appreciation for the support we enjoy from the
various stakeholders who are gathered both here and in the districts. Thank you
very much to everyone who attended and participated in our budget road shows.
Your inputs and questions have assisted us to ensure that this budget is alive
to the needs and aspirations of our people.

I would like to thank the management and staff of the Provincial Treasury
under the leadership of the acting Head of Department (HOD), Mr Mpho Mofokeng,
for their sterling and tireless contribution towards the success of this
budget. At the same time I would like to officially welcome into the Department
and congratulate our new HOD, the former honourable member of this House, Mr
Rob Tooley. He is tasked with the daunting task of steering the Department
through his management team, towards meeting its strategic objectives and
mandate. I wish him well in his new responsibility and trust that he will be
equal to the task.

Many thanks to the Provincial Public Service Commissioner, Mr Mahoai for his
guidance and assistance on the organisational structure of the Department.

To the media, we say thank you for the cordial relationship that exists
between us and for assisting us to convey our government's programmes to the
people we serve.

Special thanks to Minister Trevor Manuel, Director-General of National
Treasury, our own son of the province, Lesetja Kganyago, Lungisa Fazile, Jan
Hattingh and all the staff of National Treasury who have guided us through our
own budget process.

All our makgosi, religious leaders, mayors, councillors, speakers and
municipal managers, community leaders, financial institutions and business at
large we thank you for your support. We look forward to a long lasting and
fruitful relationship with you. Thank you for being here today!

Honourable Speaker, the Premier has once again laid down afresh the line of
march we need to pursue. We have now added to it the money that we have been
given to appropriate. The budget is our investment to ensure that our profits
are maximised. These profits can only be measured in terms of the number of
houses we build, the number of pupils that we remove from studying under trees
and place into proper classrooms, the electricity, water and sanitation we
deliver to our people and the lives we save. Our dividends are reducing
poverty, creating jobs and creating a better life for all.

We have defined the character of the society we strive to achieve. Let us
march forward by getting down to work. There is an east African saying which
says, "If the goat roars and the lion bleats, take out your spears." Let us
therefore not act out of character for the people will most certainly reach for
their spears.

Honourable Speaker

It is my honour to table before this House, the citizen guide to the
provincial budget and the provincial budget speech for 2007/08.

Baie dankie, inkomu ndza khensa, ndo livhuwa nga maanda, ke a leboga, I
thank you!

Issued by: Provincial Treasury, Limpopo Provincial Government
8 March 2007