Mashatile at the tabling of the Medium Term Budget Policy Statement and the
Provincial Adjustment Appropriation Bill
27 November 2007
'Completing the five year mandate: laying the foundations for vision
2014'
Comrade Speaker
Honourable Premier, Mbhazima Shilowa
Honourable Members of the Executive Council
Honourable Members of the House
Comrades and friends
Ladies and gentlemen
Introduction
In less than two years from now we, as the public representatives of the
people of Gauteng, will have to return to our people and report back on the
steps we have taken to honour the pledge we made during the 2004 general
elections.
As we report back to our people we will also be required to indicate how far
we have gone in laying the foundation for the realisation of our vision for
2014.
As we have said before, it is our intention to ensure that when we report
back to our people, at the end of our term of governance, we are able to say
boldly and without fear of contradiction that: ours was a journey of
success.
We must be able to report that: acting together with our people, we have
succeeded in putting together the building blocks that will continue to bring
about a better life for all.
The Medium Term Budget Policy Statement (MTBPS) and the Provincial
Adjustment Appropriation Bill, we are tabling today, seek to ensure that we
successfully complete our 2004 elections mandate and that we lay a substantial
foundation for the realisation of vision 2014.
Our progress thus far
As we table these documents, we are mindful of the success and challenges we
face in delivering on the pledge we made to our people and advancing towards
the goals of vision 2014.
The Provincial Mid Term Report and the recent Community Survey released by
Statistics South Africa indicate that we are making important strides in our
ongoing effort to build a better life for all.
We continue to make significant progress in enabling faster economic growth
and job creation, fighting poverty, building safe, secure and sustainable
communities, developing a healthy skilled and productive people, building an
effective and caring government, and deepening democracy and promoting
constitutional rights of our people.
Pointing to the success we are making in enabling faster economic growth is
that the provincial economy continues to show strong growth and since 2000 the
average provincial economic growth rate has been stronger than that of the
national economy.
Also encouraging is that the outlook for the provincial economy remains
positive.
The strong performance and outlook for the provincial economy is further
confirmed by the Gauteng Business Barometer which indicates that, despite a
decline in business activity from December 2006 and June 2007, as a result of
higher levels of inflation and interest rates, business confidence remains high
and that the provincial economy is on target towards achieving its projected
growth.
As indicated by the Premier during the State of the Province Address earlier
this year, we are beginning to make a dent on unemployment. Statistics at our
disposal indicate that: 426 000 new employment opportunities were created in
Gauteng between March 2002 and March 2006.
In March 2007, unemployment in Gauteng stood at 22,6%, significantly down
from a high of 28,8% in 2001.
We wish to caution however that a lot more still needs to be done to
accelerate job creation.
In this regard, we will continue to pay attention towards targeting and
supporting job creating sectors in the provincial economy.
These include, value added manufacturing, Information and Communications
Technologies, tourism, the creative industries and the competitive sport
sectors.
To further accelerate job creation, we will also intensify the
implementation of the Expanded Public Works Programme (EPWP) by ensuring that
it is implemented in all four sectors and that delivery of major infrastructure
projects is done through EPWP.
Furthermore, the implementation of the Gauteng City Region perspective will
go a long way towards enabling faster and shared economic growth.
Through initiatives such as Bana Pele and ongoing efforts to support the
vulnerable, including children, we are succeeding in expanding access to the
social security net.
We expect that these initiatives as well as our efforts to fight poverty
will be further strengthened as we accelerate the implementation of the
provincial Social Development Strategy.
Also as part of efforts to fight poverty and build safe secure and
sustainable communities we continue to work with local government to develop
policy guidelines that target and support poor households across the
province.
We continue to register important gains in our quest to improve access to
quality health care and education.
In particular, significant progress has been made in supporting early
childhood development, improving the quality of education in public schools,
providing hands on support to underperforming schools and improving the quality
of education of the African child.
The implementation of the provincial Human Resource Development Strategy is
expected to strengthen efforts to build skilled and productive people.
The strategy will among others ensure that we develop skills that match the
needs of the provincial economy, thus unlock the growth potential of the
provincial economy.
We continue to encourage and support popular participation in structures
such as ward committees, school governing bodies and community policing
forums.
Through our programme of Izimbizo we continue to create a platform for the
people of Gauteng to engage with their public representatives and influence
government's policy and decision making.
We are doing all of this in order to deepen democracy and nation building
and to make the constitutional rights of all people a reality.
The deployment of skilled professionals such as engineers and accountants to
municipalities is underway.
The provincial Treasury in collaboration with the Department of Local
Government is also working with municipalities to assist them in strengthening
financial management capacity.
Gauteng Provincial Government (GPG) departments also receive continued
support from the provincial Treasury to strengthen their financial
management.
The results of these interventions are starting to bear fruit. They can be
seen from the fact that for the 2006/07 financial year, 13 departments received
unqualified audit opinions.
To us this is a significant achievement. It indicates that we are firmly on
course towards our objective of building an effective and caring
government.
Furthermore, we are expanding the use of ICT in the provision of government
services. This we believe will strengthen efforts aimed at improving access to
quality services.
Comrade Speaker, the massive progress we are making in delivering on our
strategic objectives indicates to us that ours is indeed a journey of
successes.
It also indicates that in 2009, when we report back to the people of
Gauteng, we will be able to say boldly and without fear of contradiction that;
we have successfully completed our five year mandate and that a firm basis has
been laid towards the achievement of the goals of vision 2014.
The medium term budget policy statement
Comrade Speaker, it is now the third year that we are tabling the Medium
Term Budget Policy Statement (MTBPS) to this house. To us this indicates the
massive progress we are making in aligning our budgeting processes to best
practices and to encourage open, transparent and co-operative policy
making.
The MTBPS outlines our strategic priorities and the total revenue that we
will use to fund these priorities over the next three years.
The theme for this year's MTBPS is: Completing the five year mandate: Laying
the foundations for vision 2014.
We have chosen this theme as it aptly illustrates what this year's MTBPS
seeks to do, which is to ensure that GPG successfully completes its 2004
mandate and that it lays a substantial foundation for the implementation of
vision 2014.
In this regard we will, over the next three years, focus our attention on
three key priority areas namely: Building Gauteng as a global city region,
implementing the Gauteng Social Development Strategy and building the capacity
and the organisation of the state.
The allocation of resources for the 2008/09 Medium Term Expenditure
Framework (MTEF) period will be made in a manner that seeks to ensure the
effective implementation of these priorities.
Attention will also be paid towards achieving optimal resource allocation
and deriving value for money.
The Provincial Adjustment Appropriation Bill of 2007
Comrade Speaker, having outlined our priorities going forward allows me now
present the Provincial Adjustment Appropriation Bill of 2007. This Bill will
revise the Appropriation Act of 2007 that was approved by the House in February
this year.
For the 2007/08 financial year we anticipate that we will realise a net
surplus amounting to R276,9 million.
This represents an improvement from a budget deficit of R336,2 million that
we tabled to this house at the beginning of the financial year.
Revenue for the 2007/08 financial year is adjusted from R39,9 billion to
R40,5 billion while expenditure for the 2007/08 financial year is also adjusted
from R40,3 billion to R41,2 billion.
The adjustment in revenue has been necessitated by upward adjustments to
both national and provincial funding. National funding in the form of equitable
share and conditional grants has increased by a total of R320,5 million.
Provincial funding in the form of own revenue and financing from the surplus
has also increased by R156,3 million and R789,8 million respectively.
The increase in expenditure takes into account additional allocations from
national government of R246,8 million, unforeseen and unavoidable expenditure
allocations of R231,8 million, roll-overs totalling R229,1 million and other
adjustments of R173,8 million.
We wish to reiterate that the Gauteng Provincial Government continues to
maintain a stable fiscal position which allows for the building up of reserves
to cushion future economic uncertainties.
I will now move to allocations for individual departments.
Department of Health
The Department of Health receives additional funding from national transfers
totalling R246,8 million. This additional funding will be allocated for
financing budget pressures in the compensation of employees and for financing
the plan to strengthen programmes targeted at dealing with the outbreak of XDR
and MDR TB.
This department also receives roll-over funding of R72,4 million to be used
for hospital revitalisation and forensic pathology services.
An additional R52,2 million is allocated to the Department of Health for the
Revenue Incentive Scheme, in terms of which the department will be entitled to
receive a revenue incentive if it has exceeded its revenue collection
target.
This department also receives R350 000 to offset the impact of the new
demarcations in respect of the Odi and Jubilee district hospitals that were
inherited from the North West province.
Additional resources are also allocated to the Department of Health for the
revision of the existing baseline and other services, including the training of
200 additional student nurses.
Comrade Speaker, the 2007/08 budget for the Department of Health is adjusted
by an additional R393,3 million, raising its total allocation from R12 billion
to R12,4 billion.
Department of Education
The Department of Education receives roll-overs totalling R102,5 million.
This amount is approved to pay for services rendered in the previous fiscal
year.
These include payment to fund pressures related to the implementation of the
no fee schools policy, payment for Gauteng-on line and the provision of learner
and teacher support material to schools inherited from the North West province
as a result of new demarcations.
The 2007/08 budget for the Department of Education is adjusted from R 14.5
billion to R14,6 billion.
Department of Housing
The Department of Housing receives roll-overs to the amount of R22 million.
This amount will be allocated to provide additional funding for the Alexandra
Renewal Project and the 20 Priority Townships Programme.
The 2007/08 budget for the Department of Housing is adjusted from R2,63
billion to R2,66 billion.
Department of Social Development
An amount of R984 000 is suspended from the Department of Social Development
to the Gauteng Shared Services Centre for the GPG Contact Centre.
The department also surrenders back to the Provincial Revenue Fund an amount
of R33,5 million initially earmarked for early childhood development but could
not be spent by the implementing agency.
Comrade Speaker, the 2007/08 budget for the Department of Social Development
is adjusted from R1,4 billion to R1,3 billion.
Department of Public Transport, Roads and Works
The Department of Public Transport, Roads and Works receives a total of
R138,2 million to cater for the payment of subsidies for commuter and scholar
transportation in areas of Themba, Garankuwa and Mabopane which previously fell
under the North West province.
This allocation will also cater for funding the Kopanong Government Precinct
project, aimed at proving accommodation for line departments within the
Government Precinct.
An amount of R44,4 million will be transferred from the Department of
Economic Development to the Department of Public Transport, Roads and Works for
the continued implementation of the Gauteng Precinct project subsequent to the
shifting of this project to the Department of Public Transport, Roads and
Works.
Furthermore, this department receives roll-overs totalling R18,1 million to
pay for machinery and equipment related to the Gautrain Project.
An additional amount of R9,4 million will be suspended from the Gauteng
Shared Services Centre (CSSC) for the services of the Project Management Unit
in the Department of Public Transport, Roads and Works.
The total budget for this department for the 2007/08 financial year is
adjusted from R6,5 billion to R6,7 billion.
Department of Economic Development
The Department of Economic Development receives R58,5 million to cater for,
among others, the implementation of the Sedibeng Sewer Project. This project
will unlock numerous opportunities for tourism and leisure developments along
the Vaal River.
An amount of R5,4 million is transferred from the Department of Economic
Development to the Department of Sport, Arts, Culture and Recreation in respect
of services rendered by the Gauteng Youth Commission.
The Department of Economic Development will also suspend R2,4 million to the
GSSC for the Gauteng Contact Centre services.
An amount of R69,7 million is approved as retention of accumulated surpluses
for the 2006/07 financial year for the Gauteng Enterprise Propeller and the
Gauteng Tourism Authority.
The total budget for this department for the 2007/08 financial year is
adjusted from R627,3 million to R635,8 million
Gauteng Shared Service Centre (GSSC)
The GSSC receives R30 million to cater for the enhancement of information
security within GPG. These security measures were taken subsequent to an
unexpected virus attack that hit the GPG information technology environment
during August this year.
An amount of R15,3 million from various departments was approved in favour
of the GSSC for the Gauteng Contact Centre Services.
The 2007/08 budget for the GSSC is adjusted from R1,04 billion to R1,07
billion.
Gauteng Treasury
In line with our strategic priority to improve financial management capacity
within GPG, an amount of R4,7 million will be suspended from the Gauteng
Treasury and directed towards capacitating the offices of the Chief Financial
officers in various departments across GPG.
An additional amount of R5,8 million will be suspended from the Gauteng
Treasury to the Department of Local Government to be utilised for revenue
enhancement projects in municipalities.
An amount of R26 million will be allocated to the Gauteng Treasury for the
establishment of the Gauteng Fund. The purpose of the Fund is to finance, in
partnership with the private sector, commercially viable strategic
infrastructure projects across the province.
Comrade Speaker, the 2007/08 budget for the Gauteng Treasury is adjusted
from R 104,3 million to R119,5 million.
Department of Agriculture, Conservation and Environment
The Department of Agriculture, Conservation and Environment receives roll
over funding to the amount R6,7 million. This amount relates to funding for the
Land Care Programme awareness campaigns and capacity building workshops.
Additional funding is also approved for payment of information technology
equipment purchased by the department.
The department will also receive an additional allocation of R7,8 million to
be used for increasing staff capacity of its environment related compliance and
enforcement branch.
An amount of R1 million will be suspended from this department to the
Department of Education to accommodate the payment for prizes to wining schools
in respect of the Bontle ke Botho competition.
The 2007/08 budget for this department is adjusted from R294,6 million to
R308,4 million.
Department of Sport, Recreation, Arts and Culture
This department receives an additional allocation of R46,9 million to fund,
among others, the Gauteng Youth Commission and programmes by the department to
bid and host major events in line with our approach to position Gauteng as a
home of champions and a home of competitive sports.
This allocation will also be used to fund the implementation of legacy
projects in preparation for the 2010 Fifa World Cup.
An additional amount of R4,7 million is allocated to the department to cater
for the maintenance of facilities transferred from the North West province and
for the payment of staff inherited from the North West province.
Comrade Speaker, the 2007/08 budget for the Department of Sport, Recreation,
Arts and Culture is adjusted from R296,7 million to R358,2 million.
Department of Local Government
An amount of R5,8 million is suspended from the Gauteng Treasury to the
Department of Local Government for the revenue enhancement projects in
municipalities.
An additional R15 million is allocated to the Department of Local Government
for the purpose of supporting municipalities with regard to revenue collection,
basic service and infrastructure delivery.
This allocation gives practical meaning to our ongoing commitment to make
local government work better.
The total budget for the Department of Local Government for the 2007/08
financial year is adjusted from R228,4 million to R249,2 million.
Department of Community Safety
The Department of Community Safety will surrender an amount of R15 million
appropriated for the Integrated Information Management System.
A further R1,8 million is suspended by this department to the GSSC for the
Contact Centre Services.
Comrade Speaker, the 2007/08 budget for the Department of Community Safety
is adjusted from R335,4 million to R318,5 million.
The Provincial Legislature
The Legislature receives an additional R50,7 million for the payment and
improvement of compensation of employees and the acquisition of ICT related
equipment.
The 2007/08 budget for the Provincial Legislature is adjusted from R164,8
million to R215,6 million.
Office of the Premier
Rollovers to the amount of R3,6 million have been approved for the Office of
the Premier.
The Office of the Premier will also surrender R1,2 million to the Provincial
Revenue Fund.
The 2007/08 budget for the Office of the Premier is adjusted from R121,7
million to R120,3 million.
Conclusion
Comrade Speaker, we have allocated the additional resources at our disposal
in a manner that will ensure that when we go back to our people in 2009, to
account on the progress we have made in honouring the pledge we made to them,
we are able to do so confident that ours was indeed a journey of successes.
We have also outlined in the Medium Term Budget Policy Statement clear areas
that will receive priority funding over the MTEF, so that we can successfully
complete our 2004 elections mandate and lay a substantial basis for the
achievement of the goals of vision 2014.
Going forward, our immediate task is to ensure that these funds are spent
efficiently and that we derive value for money. We must continue to be
intolerant to both over and under-expenditure.
Furthermore, we must continue to strengthen our capacity to sustain the
momentum we have build and accelerate the delivery of our programmes.
I wish to take this opportunity to thank the Premier and my colleagues in
the Executive Council for their political support and insights.
A word of gratitude also goes to Heads of Department and administrative
staff from my and other departments for their technical support and advice in
developing the Adjustment Bill and the Medium Term Budget Policy Statement.
I now table the following documents for consideration by this House:
* the Provincial Adjustment Appropriation Bill of 2007,
* the Explanatory Memorandum to the Bill,
* the Medium Term Budget Policy Statement of 2007,
* a copy of my speech.
Ke a leboga
Issued by: Department of Finance and Economic Affairs, Gauteng Provincial
Government
27 November 2007
