tabling the Northern Cape Appropriation Bill of 2006 by MEC Pakes
Dikgetsi
17 February 2006
Madame Speaker,
Honourable Premier Mme Dipuo Peters,
Members of the Executive Council,
Honourable Members of the provincial legislature,
Mayors and councillors,
Ladies and gentlemen,
Comrades and friends,
âI dare say: Yesterday is a foreign country, tomorrow belongs to us.â These
are the words used by the honourable Premier when she presented the State of
the Province Address. These words describe the prevailing positive mode as we
enter the second decade of democracy in South Africa.
Madame Speaker, this year we celebrate the 10 year anniversary of the
Constitution of the Republic, which was adopted in 1996. Through this supreme
law of our country hailed by many in the world as the most progressive
constitution, the people of South Africa pledged the following and I
quote:
âWe, the people of South Africa, recognise the injustices of our past; honour
those who suffered for justice and freedom in our land; respect those who have
worked to build and develop our country and believe that South Africa belongs
to all who live in it, united in our diversity. We therefore, through our
freely elected representatives, adopt this constitution as the supreme law of
the Republic.â
It is this commitment that compels us to go out in our millions and vote in
the 1 March local government elections. As our people converge at polling
stations to make a choice of appropriate candidates and political parties to
represent them in the local municipality, we bear in mind the need to double
our efforts aimed at ensuring quality service delivery.
To this end we are inspired by the fact that our government has recorded
considerable progress in service delivery since the advent of democracy. In
particular we take note of the fact that today more people than ever before
have access to clean water and have electricity in their homes, more South
Africans have gained access to housing, land and education and services in
clinics. In todayâs South Africa more people have opportunities to become
educated and acquire skills and to help build a better South Africa our
government promotes the interests of children, persons with disability, youth,
women and older people better than before. More importantly the economy is
growing and is creating more jobs, enabling us to reduce poverty.
It is under this context that the President observed during the State of the
Nation address that âindeed I believe that for many of us our countryâs
evolution away from its apartheid past seems to have moved at such a hectic
pace that even some of the seminal moments marking the birth of our democracy
that are less than two decades old, present themselves in the subconscious mind
as being mere chapters in an aging historical record of a distant past.â
The observation of the President speaks to the heart of the progress and
advancement that our country has made in making the object of the 10 year-old
constitution of our country a reality. It demonstrates the profound evolution
recorded in our quest to create a truly democratic, non-racial, non-sexist,
united and prosperous country.
With the budget we table today we are confident and hopeful that our
government is in a good financial position to address the prevailing
socio-economic challenges as well as give expression to the commitment, spirit
and letter of our 10-year old Constitution. Our quest to ensure improved and
quality service delivery hinges upon amongst other things concerted monitoring
and assistance to some of our struggling local municipalities through project
consolidate. During the occasion of the State of the Province Address, the
honourable Premier announced a number of interventions aimed at developing
requisite skills to further contribute to advancement of service delivery as
well our broad development plan. These interventions reflect the commitment and
the plan of our government to further improve the quality of life of our
people.
Economic overview
Madame Speaker, at this point it is opportune to take this opportunity to
reflect on the economic context under which we table this budget. Nationally
the performance of the economy in recent times has been solid and consistent.
In fact the business cycle has been in an upward phase for 72 months since
September 1999 making this the longest upswing in the economic history of South
Africa. The real gross domestic product registered 24 quarters of uninterrupted
increase signifying an appreciable increase in real production per capita. Over
the last three years our national economy grew at three percent in 2003, 4.5
percent in 2004 and it was forecast to grow at five percent by the Bureau of
Economic /First National Bank at the end of 2005.
The growth momentum over the past year and a half was sustained by domestic
expenditure alongside the stronger world economy and generally favourable terms
of trade buoyed by the strong demand for our commodity exports. Our national
economy continues to be underpinned by sound macro economic fundamentals:
inflation is very benign at 4.3 percent in 2004; forecasted to average 3.7
percent in 2005, 4.1 percent in 2006 and five percent in 2007, the budget
deficit is well below three percent of gross domestic product and the prime
lending rate is 10.5 percent; all these comprise a very favourable economic
phenomena in the history of the South African economy.
Provincial economy
Our provincial economy continues to benefit from the buoyant performance of
the national economy as well as our collective and concerted effort to grow,
transform and diversify the provincial economy. Many of you will recall that
between 1996 and 2004 the Northern Cape provincial economy recorded an average
annual growth of 2.2 percent an indication of an upward economic growth trend.
Most encouraging is the fact that in 2004 the provincial economy grew at three
percent.
The three percent economic growth rate in the province was derived from the
following sub sectors: mining and quarrying contributing 0.83 percent while
output in agriculture and fishing decreased (-0.26 percent), manufacturing 0.24
percent, construction 0.17 percent, electricity and water 0.11 percent,
finance, real estate and business services 1.04 percent, transport,
communication and storage 0.35 percent, government 0.23 percent, personal
services 0.11 percent with wholesale, retail trade, hotels & restaurants
sector contributing -0.2 percent to the economic growth rate in the province.
The remaining 0.4 percent contribution was derived from the taxes less
subsidies sector.
The manufacturing sector in the last two years has generated strong growth
to the national economy mainly because of significant growth in consumer demand
for semi durable and durable goods by emerging and burgeoning middle class. In
Northern Cape, however, the manufacturing sector has grown at an annual average
of three percent driven by the demand for basic manufactured products.
Finance, real estate and business services has been another area of growth
mainly driven by the housing / property boom, the growing demand for business
services fuelled by demand for primary products and services. Transport,
storage and communications - another sector with further potential has grown
between eight â nine percent year on year. The personal services sector grew
seven percent year on year while government services grew 12 percent.
Sustainable and higher economic growth rates in the Northern Cape province
hinge on broadening economic activity across sectors already identified in the
Provincial Growth and Development Strategy (PGDS), such as agro processing,
manufacturing, procurement within the province, tourism and small, medium and
micro enterprise (SMME) development as well as spreading activities on a
spatial front. Our provincial economy poses a serious challenge of stabilising
economic growth as a pivot to achieving the six percent target by 2014. The
most critical challenge is to develop strategic interventions that will halt
the flow of leakages out of the provincial economy.
Madame Speaker, anyone can state without fear or contradiction that
unemployment is the most pressing challenge in the contemporary South Africa.
Many research reports reveal that our South Africans, including people of the
Northern Cape are of the view that unemployment is the number issue that
government needs to address. To this end the fact that unemployment in the
province declined from 26.4 percent in September 2003 to 24.7 percent in
September 2005, demonstrates the fact that the interventions of our government
as enshrined in the peopleâs contract to fight poverty and create work are
bearing fruits. It is important to note that unemployment rate in the province
is well below the national unemployment rate of 26.7 percent during the period
under discussion.
The honourable members will also recall that during the State of the Nation
Address the President spoke at length about the Accelerated and Shared Growth
Initiative of South Africa better known as AsgiSA. The name of this initiative
is indicative of the fact that it aims to ensure that our economy achieves
higher growth rates and therefore produces larger volumes of the wealth that we
need to confront the challenges of growth and development. One of the important
questions that need to be answered is how our province contributes to the
objects of AsgiSA?
Many of us are aware of the fact that although the Northern Cape and
Kimberley in particular led the industrial revolution and remains the capital
for diamonds in South Africa but there is very little for the city to show off.
In fact today the economy of the province faces tremendous challenges as a
result of closure of mines. The more concerning aspect is the fact that
diamonds produced in South Africa have only served to benefit and enrich the
rich Western countries. Our government saw a need to ensure that this situation
is reversed.
To this end it is befitting that the Northern Cape has been identified as
the hub for mining beneficiation in South Africa. In particular the diamond
cutting and polishing factory will be established in Kimberley and possibly
small operations in Springbok. Furthermore we are working towards establishing
a manganese smelter to ensure beneficiation on the mining of manganese in the
Kathu/Postmasburg area. These developments will ensure acceleration of local
economy and position our province to contribute to six percent national
economic growth target. In addition through beneficiation the people of the
Northern Cape will be in a better position to share in the wealth that is being
generated locally.
It must be noted that government alone cannot effectively stimulate economic
growth. To this end it is important to reemphasise the spirit and letter of the
PGDS that government, civil society, private sector and labour collective
determine plan for growth and development as well as work together to ensure
realisation of its objectives. As government we are committed to ensuring that
the Northern Cape Provincial Growth and Development Strategy (NCPGDS) remains a
living document and that continued stakeholder consultation is the
hallmark.
Furthermore in order to give effect to objects of AsgiSA the Northern Cape
provincial economy has created a platform for implementing this initiative
based on a series of initiatives which includes but not limited to:
* drawing the poor of the poorest into meaningful economic activity through the
South African Micro-finance Apex Fund (SAMAF), which was launched by the
honourable Premier last year in the province and will be harnessed to mobilise
savings through co-operatives so as to provide access to financial support
required to enable the very low income households to participate in the
mainstream economic activity.
* MicroâAgricultural Finance Schemes of South Africa (MAFISA) will likewise
be used to mobilise financial resources to support meaningful economic
participation in the agricultural sector.
* Growth Development Fund (GDF) formerly known as the Innovation Fund will be
used to unlock opportunities for entrepreneurs with innovative initiatives with
potential to contribute to economic growth.
Our province has also developed a Social Accounting Matrix (SAM) to use in
guiding and evaluating economic policy such as household income distribution,
growth sectors as well as studying and understanding the macro-economic impact
of high impact and anchor projects in the province. The SAM will be used
amongst other things to identify growth opportunities in the manufacturing
sector and concurrent sub sectors to accelerate economic growth.
Using the SAM our province will restructure its economic base through the
identification of other economic sectors that have strong linkages and
multipliers. This will accelerate economic growth: spread benefits of growth
spatially to all participants in the economy.
In addition, the province is identifying the sources of import leakages in
the provincial economy which has the potential to reinforce the base of the
envisaged manufacturing sector in the province. The Economic Steering Committee
(ESC) already established in the province has the potential to mobilise
resources spatially as well as expedite growth in all the regions of the
province particularly by ensuring the integration of National Spatial
Development Perspective (NSDP), Provincial Growth and Development Strategy
(PGDS), Integrated Development Plans (IDPs) and thus result in improve and
better living conditions for our people.
However, for AsgiSA to succeed in the province quick and decisive actions
need to be undertaken to address skills scarcity, create incentives and an
attractive investor regulatory environment in our district municipalities and
local municipalities as soon as possible. The development of human resource
development strategy initiative to address skills shortage in the province must
be expedited.
Fiscal discipline
Madame Speaker, sound financial management and fiscal discipline continue to
serve as dominant themes in our growth and development endeavours. Members will
recall that during last yearâs budget speech we announced that measures and
interventions including saving mechanisms to control expenditure and to ensure
more efficient utilisation of state resources were yielding positive results.
We further indicated that overspending patterns in some quarters had been
arrested and that projections derived from the in year monitoring and reporting
systems indicated that we were more than likely to break even for the 2004/05
financial year. Despite these positive results we expressed the collective
commitment of the Executive Council (EXCO) to continue implementing measures
aimed at promoting fiscal discipline and sound financial management.
To this end it gives us pleasure to announce that the finances of the
province are healthy, the debt redemption strategy is working, expenditure
management has improved and fiscal discipline is maintained. It is also
appropriate to report that all departments came within the appropriated
budgets. The rigorous mechanism we instituted including stringent fiscal
discipline and saving mechanisms to control expenditure has yielded the
required results. Nonetheless, we will continue with our efforts to ensure that
unauthorised, irregular and fruitless and wasteful expenditure is not
tolerated. The unintended consequences of our fiscal discipline was that some
departments did not spend their capital budgets, conditional grants and other
funds to such an extend that the funds had to be rolled over.
Madam Speaker, the debt redemption strategy is on track, we will table
before the end of the current financial a finance bill that will see the
accumulated unauthorised expenditure of the previous years being reduced by 69
percent within two financial years.
Furthermore we are delighted and satisfied by the significant improvement on
the departments that received unqualified audit opinion from 33 percent in
2003/04 financial year to 82 percent for the 2004/05 financial year. This is
yet another milestone recorded under the strong guidance of the honourable
Premier, Mme Dipuo Peters. We must also applaud all MECs for their collective
efforts and commitment to ensure sound financial management and fiscal
discipline. Nonetheless, the matters raised by the Auditor-General under the
matters of emphases must still be attended to. It is our aim to ensure that no
department receives a qualified audit opinion. The process of building the
requisite skills in financial management which is one of the factors that
contributed to challenges in financial management in the past is gradually
taking shape. The process involves the acquisition of skills at an operational
level that will enable financial managers to perform better.
Strategic plans
Madame Speaker, the effectiveness of our budget to achieve the desired
results is dependent on the ability of our spending agencies to align their
strategic plans with the objectives of government as enshrined in the PGDS. The
National Treasury recently conducted a study aimed at assessing the quality and
impact of 2005 strategic and performance plans prepared by provincial
departments on planning, budgeting, implementation and reporting on service
delivery and to establish whether the linkages between these processes have
strengthened or improved. This study found amongst other things that although
departments follow proper format in formulating strategic plans there is
limited evidence that the process has improved the quality of service delivery
and efficiency of resource allocation. The study also raises a number of
concerns around the adequacy of the strategic plans to express and address the
key challenges facing departments.
In addition the provincial budget process has also alerted us to the fact
that departments are still struggling to align their strategic plans with the
PGDS. It is for this reason that one of the pressing challenges moving forward
would be ensuring that departments give strategic plans adequate attention.
This will ensure that the resources provided to departments are used adequately
and effectively in order to achieve the objects of the PGDS.
Furthermore it must be recalled that the PGDS calls for a need to bring
about more effective integration, coordination and alignment of the activities
of the three spheres of government so as to improve the development impact of
governmentâs programmes. Through its engagement with local and national
government, the Northern Cape Government will actively seek to ensure the
harmonisation and alignment of the NCPGDS with the IDPs, the National Spatial
Development Perspective (NSDP) and various sector planning initiatives of
national government.
Local government
The subject of integration, co-ordination and alignment also speaks of the
important role of local government. During last yearâs budget speech we noted
that the role of our local sphere of government in addressing the challenges
facing our province remains critical. We made this assertion aware of the
centrality of this sphere of government in growing local economy, creating job
opportunities and improving quality of life of our people. It is for this
reason that our quest to ensure maximum utilisation of our resources in the
fight against poverty continues.
One of the challenges facing local government is in the area of financial
management. The introduction of the Municipal Finance Management Act, which
came in full and complete implementation in July 2005 also presents a number of
challenges. In particular a serious challenge lies in the ability and capacity
of municipalities to fulfil their obligation in terms of the Municipal Finance
Management Act (MFMA). The Imbizos held through out our province highlights the
challenges around general management of municipal finance. To this end the
Premier announced measures to address some of these challenges.
Infrastructure
Madam Speaker, last year we reported that one of the areas that will receive
concerted attention during the Medium Term Expenditure Framework (MTEF) period
will be the improvement of infrastructure delivery process. This assertion was
premised on the fact that provincial economic growth and job creation can be
significantly enhanced through investment in infrastructure development. In
this regard the Infrastructure Delivery Improvement Programme (IDIP) started in
2004. During phase one of the IDIP rollout National Treasury appointed
technical assistants in all nine provinces to assist the departments of
education. Their main responsibility was to capacitate the current staff in the
department as well as to compile a 10 year infrastructure plan.
During phase two, which was the assessment and design phase, a technical
team of infrastructure experts was sent to our province. The core function of
the team was to assess the capacity and ability of the provincial Department of
Education and the provincial Department of Transport, Roads and Public Works to
plan and implement infrastructure delivery effectively and efficiently and to
assess the capacity of the Provincial Treasury to manage the IDIP in the
province.
The design phase focussed on the development of a comprehensive proposal for
each of the two departments in the province describing and motivating the key
interventions, which will enhance the departmentsâ ability and capacity to plan
and manage infrastructure delivery in the short, medium and long term. The
design also provided recommendations on the management of the implementation of
the IDIP in the province.
Provincial technical assistantsâ teams will be appointed in our province
from 1 April 2006. They will be situated in the Department of Education and
Transport, Roads and Public Works. They will be responsible for:
* Implementing alternative models for accelerated delivery and capacity
building
* Developing a robust planning and budgeting capability, in line with IDIP
principles
* Developing an immovable asset management capability which includes planning,
budgeting, monitoring and evaluation relating to infrastructure maintenance and
management
* Developing efficient and effective integration and coordination mechanisms
between the departments and their infrastructure implementing agents.
As a province we are encouraged that National Treasury is consistently
reviewing infrastructure delivery and reporting to provinces. This puts us in a
favourable position to focus on expenditure trends of departments. National
Treasury is currently in the process to establish a plan that will allow
provinces to align infrastructure delivery cycle with our budget cycle and the
strategic plan cycle.
The Infrastructure Programme Management Plan (IPMP) and the Infrastructure
Programme Implementation Plan (IPIP) will be implemented during 2006. These
plans will ensure that the handing over of projects from the client department
to the implementing agent be improved by means of a formal process in which all
parties will agree to exactly what needs to be done, by whom, when and at what
cost.
As a province we will:
* Achieve proper strategic planning;
* Better alignment of budget targets set out in the strategic plan;
* Project design is properly done, resulting in achievable cash flows and
* Accurate monitoring on spending trends.
Madame Speaker, in order to give effect to the objects of infrastructure
development our province will continue to focus on the Expanded Public Works
Programme (EPWP) as part of our programme to extend and build new
infrastructure as well as strengthen participation and inclusion of those
trapped in the second economy.
In addition we are encouraged by the fact that due to our performance, our
province received R20,908 million during the adjustment estimate for the
revitalisation hospitals. Amongst other things the major projects for the
hospital revitalisation programme include the construction of: the Psychiatric
Hospital in Kimberley, Barkley West Hospital, Upington Hospital and the De Aar
Clinic. Furthermore the Department of Housing and Local Government will deliver
approximately 3000 houses in the 2006/07 financial year.
Budget
Madam Speaker, before we unpack the specific of the 2006/07 budget in terms
allocations to different departments, it is important to briefly reflect on
some of the issues relating to the Provincial Fiscal Framework (PFF). Amongst
other things we must take note of the fact that a major change in the
provincial fiscal framework for the 2006 MTEF is the shift of social security
grant function from provincial to national sphere of government, which directly
impacts on the conditional grants framework. As of 1 April 2006 the
administration and payment of social security grants will no longer be the
responsibility of the provincial Department of Social Services and Population
Development.
The function will shift from all provinces to the South African Social
Security Agency (SASSA), which is a public entity administered by the national
Department of Social Development. We are informed that the SASSA is now in a
position to administer the social assistance security function.
One of the key issues relating to the PFF pertains to provincial own
revenue. Honourable members will recall that last year we alluded to the fact
that 98 percent of our revenue comes from equitable share and conditional
grants and that the balance of two percent is from provincially generated own
revenue. We also indicated that the Provincial Treasury would be looking at
ways to both improve revenue collection and expand our revenue base. To this
end we are able to report that some of the introduced interventions are
beginning to yield positive results. This is demonstrated by the fact that we
have exceeded own provincial revenue by collecting 21 percent over and above
the target we set for 2004/05 financial year and indications are that we will
be also exceed the current yearâs target.
This development also means that in real terms there is now a slight
improvement in the provincial own revenue. In the 2004/05 financial year
provincial own revenue accounts for three percent while the equitable share and
conditional grants account for 97 percent. This slight improvement is
attributed to the function shift and revision of own revenue targets over the
Medium Term Expenditure Framework (MTEF). With anticipated improvements in the
medium to long term in the area of collection, we can expect the change from
three percent to four percent in the last year of the 2006 MTEF period.
Budget allocation
Madam Speaker, we are again reminded of the words of the Premier and I
quote:
âI dare say: Yesterday is a foreign country, tomorrow belongs to usâ. The
budget we present today represents a significant difference from the budget we
presented last year. The 2005 MTEF budget amounted to R16,9 billion over the
MTEF of which R5,1 billion, R5,7 billion and R6,1 billion were respectively for
2005/06, 2006/07 and 2007/08 financial years. The new 2006 MTEF sees a
reduction of R4,8 billion over the MTEF. This is due to the social security
assistance grants function shift I referred to earlier. However, in the same
period R1,4 billion will be added to the provincial revenue in the form of
equitable share, conditional grants and own revenue.
Over the MTEF equitable share increases by R106,4 million in 2006/07 to
R487,7 million in the last year of the MTEF. Conditional grants increases by
R149,8 million to a total of R419,8 million over the MTEF period while
provincial own revenue increases by R65,5 million over the same period.
Included in the increase in equitable share is an amount of R57,6 million
over the MTEF period in respect of conditional grants that have been
discontinued and phased into the equitable share. The largest portion of these
conditional grants is administered by the department of social services and
population development. The Department is expected to continue to render the
services financed by these conditional grants as part of the departmentâs daily
responsibilities. It is important to emphasise this matter as one of the
conditional grants was used to finance community based care programme for HIV
and AIDS.
Social sector
Madam Speaker, the policies of our government and in particular fiscal
policy is pro poor. They are biased towards the poor necessarily because many
of our impoverished in the main as a result of apartheid policies of separate
development. Furthermore our government signed a contract with people of South
Africa to wage a fight against poverty and create work. Our government is
fighting to liberate our people from the shackles of perpetual poverty by
providing resources to address social ills. To this end the social sector
departments (i.e. education, health and social services and population
development) will see their budget increased above the baseline by R519,0
million over the MTEF period. Included in this increase is R92,3 million in
respect of Extended Public Works Programme (EPWP) for the social sector
departments.
Department of Education, this additional funding is intended to reduce the
backlogs in school equipment expand early childhood development (i.e. Grade R)
provide for teacher development and human resources management systems, extend
the implementation of the new curriculum statement to Grade 10 â 12, implement
revised norms and standards for school funding including no fee schools and to
expand information management systems.
In the Department of Health, Madam Speaker, the additional funding above the
baseline is intended to enhance human resources management including recruiting
health professionals, expanding emergency medical services, implementing a new
national ambulance model, expanding the primary healthcare, improving services
in rural areas and modernising the tertiary services. Lastly, Madam Speaker, in
Social Services and Population Development Department the additional funding
over and above the baseline allocation is intended to expand existing social
welfare services and at the same time to gear them up for the phased
implementation of the Childrenâs Bill, the Older Personâs Bill and the Child
Justice Bill.
The additional allocation above the baseline for EPWP for the social sector
is intended to fund the expansion of existing programmes (i.e. community health
workers, community/home-based care and early childhood development) and to
provide for training of practitioners, the payment of their stipends, the
provision of materials, food and basic healthcare.
The EPWP for the social sector are joint initiatives and would require tight
co-ordination and extensive co-operation in order to avoid duplication and
wastage between the social sector departments in the province and their
national counter parts.
Economic sector
Honourable members, our efforts to ensure growth, transformation and
diversification of the provincial economy continue. In the Premier announced
during the State of the Province Address that through a number of projects the
province will seek to make a contribution to the AsgiSA. Over and above these
projects there is need for the provincial government to allocate appropriate
resources to the agencies charged with the mandating of creating an environment
conducive for economic growth.
To this end, Madam Speaker, the economic sector (i.e. transport, roads and
public works, tourism, environment and conservation, agriculture and land
reform) receives an additional allocation of R4,6 million in the first year of
the MTEF and this will increase to R22 million in the last year of the MTEF
period.
Additional funding for the economic sector departments is intended to step
up provincial functions including the rehabilitation and maintenance of
provincial roads, the support for agriculture and the bolstering of provincial
tourism. In addition the implementation of the PGDS remains the cornerstone
plan to grow and develop our province.
Madam Speaker, thus far we have presented to this house additional funding
that can be regarded as earmarked for specific policy priorities especially
those referring to concurrent functions between the national and provincial
governments. At this point attention is given to the second trench of
additional funding above baseline where departments receive additional funding
for what one could loosely call provincial priorities peculiar to our province.
The total funding for provincial priorities over the MTEF amounts to R226,6
million of which R54,1 million is allocated for 2006/07, R73,3 million for
2007/08 and R99,1 million for 2008/09 financial years 29,6 per cent or R67
million of the R226,6 million is for the social sector while 27,5 percent or
R62,3 million is allocated to the economic sector and the remainder of R97,3
million or 42,9 percent of the additional allocation is for the governance
administration and justice sector which includes the Legislature, Office of the
Premier, Provincial Treasury, Housing and Local Government and Safety and
Liaison.
Madam Speaker, let us now turn to the additional R419,8 million over the
MTEF of conditional grants allocations above the baseline. The Department of
Agriculture and Land Reform receives an addition R10,1 million over the three
year MTEF period to fund poverty relief and infrastructure programmes for the
farming communities and emerging farmer entrepreneurs.
The Department of Education receives R25,6 million over the MTEF period to
recapitalise further education and training colleges to enable these colleges
to gear themselves to produce the skills required by the economy.
The Department of Health receives a new conditional grant as a result of the
transfer of forensic pathology services from South African Police Service
(SAPS) to the provincial departments of Health. Over the MTEF period this grant
amounts to R61,1 million. In addition to this the Department receives increases
for the first two years of the MTEF amounting to R173,7 million for the
revitalisation of hospitals. Madam Speaker, this is in addition to R4,4 million
for forensic pathology services and R20,9 million for the hospital
revitalisation received in the 2005/06 adjustment estimates.
The Department of Housing and Local Government receives an additional R11,4
million in 2006/07, it increases to R16,8 million in 2007/08 and R20,6 million
in 2008/09 financial years for the Integrated Housing and Human Settlement
Development(IHHSD).
The Department of Sports, Arts and Culture receives R9,4 million over the
MTEF period for mass sport and recreation participation programme and the
provincial infrastructure increases by R19,9 million in the last year of the
MTEF. This amount has been allocated to the provincial departments in the
following manner. Health receives R4 million, Education R2,9 million,
Agriculture and Land Reform R1,5 million, Transport, Roads and Public Works
R9,9 million and Housing and Local Government R,5 million.
Departmental allocations
Madame Speaker, turning to the highlights of individual additional
allocations to the various provincial departments: the office of the Premier
receives an additional R10 million over the MTEF of which R6,3 million is
intended for the National Institute of Higher Education (NIHE) to fund bursary
commitments already entered into in the previous years.
An amount of R7,5 million over the MTEF has been allocated to the Department
of Safety and Liaison to built capacity with regard to provincial own revenue
collection programme and general administrative support.
The Department of Economic Affairs will receive an additional R4,1 million
over the MTEF period to implement the gambling and liquor acts to support
substance abuse programmes of the Department of Social Services and Population
Development.
The Department of Sports, Arts and Culture will receive additional R16,1
million over the MTEF period to fund expenditure relating to infrastructure
maintenance for museums and libraries, soccer development initiatives and the
building of administrative support capacity.
Housing and Local Government receives R65,1 million over the MTEF to fund
salaries and related expenditure in respect of the community development
workers. This is in addition to R9,9 million the Department received in the
2005/06 adjustment estimates.
The Department of Health, in addition to the additional funds to cover
expenditure on sector policy priorities amounting R109,4 million and sector
EPWP amounting to R24,9 million, the Department will receive over the MTEF
period above the baseline R27,6 million mainly for HIV and AIDS and life saving
health equipment.
The Department of Social Services and Population Development will receive
additional R4,2 million in addition to funding for sector policy priorities and
sector expanded public works programme. This additional funding will be
utilised for substance abuse programme. Social sector priorities including
sector expanded public works programme amounts to R138,2 million over 2005 MTEF
baseline allocations.
The Department of Agriculture and Land Reform will receive R5,7 million
above baseline over the MTEF period for agricultural research and development
stations improvements. This is in addition to R15,8 million over the MTEF to
fund sector policy priorities.
Tourism has been identified as one of the economic sectors that have the
potential to create jobs. As a province we have committed ourselves to
contribute R12 million into the multimillion rand big hole project. To this
effect R6 million has been allocated to the Department of Tourism, Environment
and Conservation to fulfil our undertaking. This is in addition to the R6
million included in the 2005/06 budget of the Department. R400 million once off
amounts have been allocated to the Department to conduct an aerial audit in the
2006/07 financial year while R5,1 million has been allocated over the MTEF
period to implement Tourism Master Plan.
Madam Speaker, the budget we have tabled here today is a surplus budget,
which means that we did not allocate all the funds we will receive to the
provincial votes. The total unallocated funds over the MTEF amounts to R108,1
million in respect of government employees medical aid scheme and R293,7
million for debt redemption over the MTEF period. Because the South African
government is a caring government not only caring for the communities it serves
but also for the employees who are serving these communities, a decision was
taken at national Cabinet to establish a medical aid scheme for public servants
especially those at lower income levels to be able to access this facility at
an affordable cost. This extra funding has not been allocated to departments,
this will be done as soon as administrative aspects relating to the take up
rate has been finalised and will be available for appropriation in the 2006/07
adjustment estimates. Of the R293,7 million set aside over the MTEF period for
debt redemption, R180 million will be used to cover unauthorised expenditure of
the previous financial years and the remainder of R113,7 million will be
available to fund service delivery improvement programmes of implementing
departments.
Conclusion
Madam Speaker, after everything has been said and done the challenge to the
implementing departments is whether they have grand strategies and
implementation plans to realise the intended outputs emanating from these
allocations. As Provincial Government we will intensify our efforts to ensure
that the provincial government receives value for money spend, we will
intensify our efforts to work towards the elimination of irregular, fruitless
and wasteful expenditure, we will continue to maintain fiscal discipline and
ensure that the services are geared towards the reduction of poverty and the
creation of job opportunities.
We also take this opportunity call upon all residents of our province to
converge at polling stations in their thousands on 1 March and cast their vote
in the local government elections. Given the maturity of democracy and
experience in the past 12 years there is no doubt that we will record yet
another peaceful election.
In conclusion let me send my sincerest and profound gratitude and
appreciation to the following people and institutions:
* The honourable Premier, Mme Dipuo Peters not only for her leadership and
guidance but also for her continued support;
* Members of the Exco for ensuring that we give effect to our collective
undertaking to ensure sound financial management and fiscal discipline;
* Heads of departments and their Chief Financial Officers for ensuring that
the Provincial Treasury receives the necessary information;
* Officials of the Provincial Treasury and Ministry who laboured diligently
and meticulously to ensure that the budget is tabled correctly.
Madame Speaker and honourable members I commend to you:
* The Northern Cape appropriation Bill 2006
* The Budget statement for the 2006/2007, MTEF including the two outer years
which takes into account estimates of revenue and expenditure.
âI dare say: Yesterday is a foreign country, tomorrow belongs to usâ
I thank you!
Ke a leboga!
Dankie!
Issued by: Department of Finance and Economic Affairs, Northern Cape
Provincial Government
17 February 2006
Source: Northern Cape Provincial Government (http://www.northern-cape.gov.za)
