Summary
1. The third quarter year to date provincial budget statement of receipts and payments, published by the National Treasury in terms of Section 32 of the Public Finance Management Act, 1999 (PFMA) on 29 January 2010, covers spending for the first nine months of the 2009/10 financial year, which ended 31 December 2009. It is available on the treasury website at http://www.treasury.gov.za.
2. The information is sourced from the Section 40(4) PFMA reports signed by each head of provincial department to their provincial treasury and submitted to the National Treasury by 22 January 2010. Queries on spending or budget numbers should therefore, in the first instance, be referred to the relevant head official of the provincial department and in the second instance to the head official of the provincial treasury. Queries on conditional grants may also be referred to the relevant head official of the administering national department.
3. The budgeted expenditure figures in the third quarter publication take account of revisions effected in the provincial adjustment budgets, which were presented to their provincial legislatures during November 2009. It includes R10.8 billion allocated to provinces (R9 billion to the provincial equitable share and R1.8 billion to conditional grants) through the 2009 Adjusted Estimates of National Expenditure.
4. The approved additional adjustments to provinces were gazetted on 10 December 2009 and these additional transfers were taken up in the provincial adjusted budgets in terms of Section 31(2) of the PFMA and Section 24(2) of the Division of Revenue Act, 2009.
5. Some of the additional transfers to provinces appropriated by national government are:
* The wage agreement (Resolution 5 of 2009 of the Public Service Coordinating Bargaining Council (PSCBC) is five percent higher than what provinces planned for when they tabled their 2009 budgets. R4.5 billion is approved to cover for this shortfall
* The Occupation Specific Dispensation (OSD) for educators concluded in 2009 (ELRC collective agreement 4 of 2009) is also placing additional funding responsibilities on provinces. R3.8 billion is approved to cover for this shortfall
* The agreement reached in the Public Health and Social Development Sectoral Bargaining Council (PHSDSBC) on 7 August 2009 gave effect to the introduction of an OSD for medical doctors, dentists, medical and dental specialists, pharmacists, pharmacy assistants and emergency medical services personnel (paramedics). R646 million is approved to cover for these shortfalls
* An amount of R353.2 million is set aside to cover the shortfall in property rates in selected provinces
* An additional R900 million is approved to scale up both preventative and treatment components on the Comprehensive HIV and AIDS programme.
* An additional R144 million is approved for the Gautrain Rapid Rail Link conditional grant to protect the real value of spending on this programme
* An additional R213.8 million is approved to fund selected provinces for unforeseeable and unavoidable expenses
* An additional R30 million is approved to fund the final FIFA 2010 World Cup preparation strategies that are to be implemented by the health sector
* R197.6 million of provincial conditional grants not transferred by national departments were approved to be rolled over.
6. In addition to the national adjustments, provinces increased their main budgets by R3.3 billion. The provincial adjustments consist mainly of unspent conditional grants not surrendered to the national revenue fund and other funds surrendered to the respective provincial revenue funds during 2008/09.
7. In light of the above, in aggregate, provinces increased their main budgets (expenditure side) by R14.1 billion with the bulk to education (R6.5 billion), health (R4.2 billion) and public works, roads and transport (R2.6 billion).
Overall expenditure trends
8. In aggregate, provinces have spent 74.7 percent or R226.9 billion of their adjusted budgets of R303.8 billion for the period ended 31 December 2009. This represents a spending increase year-on-year of 13.8 percent or R27.6 billion higher than for the same period last year when provinces had spent R199.3 billion.
9. Education expenditure totalled R94.7 billion or 75.9 percent of the R124.8 billion combined education adjusted budgets and remains the largest item on provincial budgets (41.1 percent). The spending pattern reflects a 15.9 percent or R13 billion increase over the same period last year.
10. Health expenditure totalled R65.5 billion or 76 percent of the R86.2 billion combined health adjusted budgets and is the second largest item (after education) on provincial budgets (28.4 percent). The spending pattern reflects a 14.7 percent or R8.4 billion increase compared with the same period in 2008/09.
11. Social development spending for the first nine months of the 2009/10 financial year is recorded at 70.5 percent or R6.5 billion of the R9.3 billion social development adjusted budgets.
12. Personnel expenditure, in aggregate, is at 74.9 percent or R125.9 billion of the R168 billion personnel adjusted budgets.
13. In aggregate, provinces spent 67.4 percent or R16.2 billion of their R24 billion combined capital adjusted budgets. This is 2.8 percent higher when compared to the same period in 2008/09.
14. Provincial education departments spent 84 percent or R4.5 billion of their R5.4 billion education capital adjusted budgets. This is significantly higher by 36.4 percent or R1.2 billion more than spending over the same period of the previous financial year.
15. Provincial health departments also improved on capital spending. They have spent 59.7 percent or R5.2 billion against their R8.6 billion health capital adjusted budgets, which is 7.9 percent or R379 million more than the same period for 2008/09.
16. The second highest share of provincial capital adjusted budgets, after health, is for public works, roads and transport departments at 32.2 percent. The sector spent 68.2 percent or R5.3 billion against its combined capital adjusted budgets of R7.7 billion.
17. Provincial own revenue collected thus far is at 74.8 percent or R7 billion of the total own revenue adjusted budget of R9.3 billion. National government has transferred R179.1 billion of the equitable share and R40.2 billion in conditional grants to provinces, during the first nine months of the 2009/10 financial year.
18. A more detail analysis of the expenditure outcome as at 31 December 2009 is set out in annexure A (http://www.info.gov.za/speeches/docs/provbudget_q3_2010.pdf), which also includes a comparative spending analysis for the same period over the 2008/09 financial year.
Media enquiries:
Kershia Singh
Tel: 012 315 5819
Fax: 012 315 5126
Issued by: National Treasury
10 March 2010
