Summary
1. Published by the National Treasury in terms of Section 32 of the Public Finance Management Act, 1999 (PFMA) on 29 October 2010, the provincial budget statement of receipts and payments covers spending for the first six months (April-September 2010) of the 2010/11 financial year. The statement is available on the treasury website at www.treasury.gov.za.
2. The information is sourced from the Section 40(4) PFMA reports submitted by the heads of provincial departments to provincial treasuries, who, in turn, had to submit the information to the National Treasury by 22 October 2010. Queries on spending or budget numbers should therefore, in the first instance, be referred to the head of the relevant provincial department, and in the second instance, to the head of the relevant provincial treasury. Queries on conditional grants may be referred to the head of the administering national department.
3. Expenditures not foreseen at the time of tabling the 2010 provincial main budgets are:
a. Higher than budgeted for personnel remuneration increases, including the increased housing allowance.
b. Occupation Specific Dispensation payments for the provincial health sector.
c. Expenditure for the Devolution of Property Rate Funds grant in provinces.
d. Expenditure for the Comprehensive HIV and Aids programme to meet the increased demand for male circumcision.
e. Expenses relating to disasters and other emergencies in KwaZulu-Natal and the Western Cape.
4. To cover the shortfalls mentioned above, the 2010 Adjusted Estimates of National Expenditure and the 2010 Medium Term Budget Policy Statement tabled on 27 October 2010, proposed additional adjustments to the allocations made to provinces in the 2010 Budget. These documents are available on the treasury website at www.treasury.gov.za.
5. The additional adjustments will be concluded after the provinces table their 2010 adjusted estimates during November 2010.
Overall expenditure trends
6. In aggregate, provinces spent R152.6 billion, or 46.3 per cent, of their main budgets of R329.8 billion for the first half of the 2010/11 financial year. This represents a spending increase of 4.9 per cent or R7.1 billion compared to the same period last year when provinces had spent R145.5 billion.
7.Education expenditure totalled R65.5 billion, or 47.6 percent, of the R137.4 billion combined education budgets, and remains the largest item on provincial budgets (41.7 percent). This is an increase of 11.1 percent, or R6.5 billion, on the same period last year.
8. Health expenditure totalled R46.3 billion, or 47.1 per cent, of the R98.4 billion combined health budgets and is the second largest item on provincial budgets (29.8 per cent). This is an increase of 9.1 per cent or R3.9 billion on the same period last year.
9. Social development spending is recorded at R4.3 billion, or 42.3 per cent, of the R10.2 billion social development budgets.
10. Personnel expenditure, in aggregate, is at R91.6 billion, or 49.3 per cent, of the budgeted R185.7 billion.
11. In aggregate, provinces spent R8.4 billion, or 33.1 per cent, of their R25.4 billion combined capital budgets. This is a decline of 23.5 per cent when compared to the same period in 2009/10.
12. Provincial education departments spent R2.1 billion, or 29.4 per cent, of the budgeted R7.2 billion for capital expenditure. This is 33.3 per cent or R1 billion less than what was spent the previous financial year.
13. Provincial health departments spent R3 billion, or 33.6 per cent, of thebudgeted R8.8 billion for capital expenditure, which is R253.1 million, or 7.9 per cent, less than the same period for 2009/10.
14. The second biggest share (29 percent) of provincial capital budgets after health, is for public works, roads and transport departments which spent R2.8 billion, or 37.9 per cent, of the total capital budget of R7.4 billion.
15.Provincial own revenue collected thus far is at R4.8 billion, or 50.3 per cent, of the budgeted own revenue of R9.5 billion. At the half-year mark, national government had transferred to provinces R130.5 billion of the equitable share and R31.3 billion of conditional grants to provinces.
16. A detailed analysis of the expenditure outcome as at 30 September 2010 is set out in Annexure A, which also includes a comparative analysis of spending for the same period over the 2009/10 financial year.
