Summary
1. Published by the National Treasury in terms of Section 32 of the Public Finance Management Act (PFMA), this provincial budget statement of receipts and payments covers spending for the first six months (April to September 2012) of the 2012/13 financial year. The statement is available on the treasury website at www.treasury.gov.za.
2. The information in the statement comes from the Section 40(4) PFMA reports submitted by heads of provincial departments to provincial treasuries, who, in turn, submitted the information to the National Treasury. 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 national department that administers the grant.
3. The budgeted figures in the publication take account of the 2012 Estimates of Provincial Revenue and Expenditure, which were presented to the provincial legislatures during March 2012.
4. Expenditures not foreseen at the time of tabling the 2012 Estimates of Provincial Revenue and Expenditure are:
a. Increases in personnel remuneration that are higher than what was budgeted for.
b. Additional funding to provinces through a new once-off conditional grant for the provision of health and medical services during the Africa Cup of Nations 2013 (AFCON) tournament scheduled for 19 January to 10 February 2013, and all related official events.
c. Adjustments for the Health Infrastructure and Hospital Revitalisation conditional grants to provide for unforeseen and unavoidable expenditure.
5. To cover the shortfalls mentioned above, the 2012 Adjusted Estimates of National Expenditure and the 2012 Medium Term Budget Policy Statement tabled on 25 October 2012, proposed additional adjustments to the allocations made to provinces in the 2012 Budget. Detailed information on the additional adjustments is set out in the 2012 Division of Revenue Amendment Bill. These documents are available on the treasury website at www.treasury.gov.za.
6. Provinces will have concluded their 2012 adjusted estimates by the end of November 2012.
Overall expenditure trends
7. In aggregate, provinces spent R189.2 billion, or 48.7 per cent, of their combined budgets of R388.4 billion for the first half of the 2012/13 financial year, an increase of 6.9 per cent or R12.2 billion on the R177 billion spent last year.
8. Education expenditure, which at 42 per cent is the largest item on provincial budgets, was R82.4 billion or 50.4 per cent of the R163.7 billion combined education budgets, an increase of 6 per cent or R4.7 billion on the previous financial year.
9. Health expenditure, which at 30 per cent is the second largest item on provincial budgets, totalled R60 billion, or 50.9 per cent of the R117.8 billion combined health budgets. The expenditure represents an increase of 11.9 per cent or R6.4 billion on the same period for the 2011/12 financial year.
10. Social development expenditure for the half-year was R5.6 billion or 46.4 per cent of the R12.2 billion combined social development budgets.
11. Personnel expenditure (compensation of employees) was R115.8 billion or 49.9 per cent of the budgeted (main) R231.9 billion. National government made available R4 billion through the 2012 Adjusted Estimates of National Expenditure in October to provide for higher than budgeted for wage agreements.
12. In aggregate, provinces spent R12.5 billion or 46 per cent of their R27.2 billion combined capital (payments for capital assets) budgets, an increase of 12.5 per cent on the expenditure for the same period of the 2011/12 financial year.
13. Provincial education departments spent R3.9 billion or 49.7 per cent of the budgeted R7.8 billion for capital expenditure, which is R518 million or 15.4 per cent more than the expenditure for the previous financial year.
14. Provincial health departments spent R3.7 billion or 44.5 per cent of the budgeted R8.2 billion for capital expenditure, which is R242 million or 7.1 per cent more than the same period for 2011/12.
15. The biggest share (33.6 per cent) of provincial capital budgets is for the public works, roads and transport departments, which spent R4.1 billion or 45.2 per cent of the combined capital budget of R9.1 billion.
16. Provinces collected of R6.3 billion, or 54.9 per cent of the budgeted own revenue of R11.4 billion. By 30 September 2012, national government had transferred to provinces R154.5 billion of the equitable share and R39.4 billion of conditional grants.
17. A more detailed analysis on the outcome of provincial finances as at 30 September 2012 is set out in Annexure A.
