P Dikgetsi: Northern Cape Prov Budget 2007/08

5 March 2007

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

Our common purpose in the current trajectory is to intensify the fight
against poverty. The idea of common purpose means we move in unison and in one
direction; that whatever we do and wherever we do it, must aim at the common
purpose of poverty eradication and making inroads in the trenches of the
so-called second economy to uplift our people from the misery of poverty and
want.

Let me think back and remind the house, madam speaker, of the historical
nightmare that the legal doctrine of common purpose has given us during the
height of apartheid, particularly in the late 1980s. It is the legal doctrine
of common purposes that condemned the Sharpeville Six. It is the legal doctrine
of common purpose that saw the conviction of Upington 25, and condemned 14 of
them to the death penalty. So, if the doctrine was so nightmarish, why invoke
it in the fight against poverty?

The answer is here: we must redefine the concept of common purpose and strip
it of its apartheid legal connotation. In fact we must develop a new definition
of political common purpose.

Political common purpose has as its key tenets and values:

* launching a common onslaught against poverty and want, irrespective of
political affiliation
* ensuring deployment of financial resources to projects that will have maximum
impact in achieving the vision of a better life for all
* bringing our endeavours together to efficiently, effectively and economically
allocate and manage the provincial resources to win the war against
poverty.

One of the things we need to address through the new doctrine of common
purpose, as the Legislature, the Executive and the Public Service, is to move
people from 'too much thinking' to 'too much doing.' This is a common purpose
against procrastination. In this sense, Madam Speaker, we must remember the old
African idiom 'sekhukhune se bonwa ke sebataladi' - we pick out procrastination
like a hawk does a helpless chick.

With the vision of common purpose, we need to speak like the ancient Romans
who had a saying "sauviter in modo, fortiter in re" meaning we are an 'iron
hand in a velvet glove.' We will be considerate, assistive and educative in
engagements with one another but we will do so aggressively because we have an
urgent business to do: a common purpose against poverty and want.

Today we table the third budget of the third session of the democratically
elected Provincial Legislature. Since the inception of democracy in 1994 our
point of departure has always been that fighting poverty and deprivation must
be the priority of a democratically elected government.

Ukuvumelana nembono zezigidi zabantu baseMzantsi Afrika abinike uRhulumente
wethu inxaso enkulu kunyulo jikele luka 2004, inzame zokulwa indlala
nentlupheko ziyakusoloko ziyeyona ndima siyinikela ingqalelo ekwakheni uMzantsi
Afrika omtsha. Kungesosizathu ukuba uhlahlo lwabiwo mali lwethu silusebenzisa
njengesixhobo sokunciphisa indlala nentlupheko.

Accordingly, today as we did in the past thirteen years, we table a budget
indicative of our quest and commitment to relieve our people of the plight of
poverty and improve their quality of life. The policies pursued by our
government during this period around economic management, fiscal discipline and
good governance provide us today with an opportunity to spend more resources in
the fight against poverty. So, it gives me pleasure to note that through the
budget we table today government is able to intensify the fight against
poverty.

We table this budget recognising the fact that this year marks the mid-term
of the life of a government born of our last, 2004, general elections. Thus,
this necessitates that we reflect on the question posed by the President during
the State of the Nation address and I quote - "what progress have we made in
the quest to achieve the objectives to which we honestly told the nation we
were committed, as a result of which our people gave us the overwhelming
authority to govern our country from 2004 until the next elections in
2009."

Our reflection on this issue requires us to identify those areas where we
have fallen short with regard to our own and the people's expectations as well
as determine what needs to be done to address any shortcomings and further
build on what has been done. Our reflection on progress made has to be brutally
honest yet constructive enough not to underscore both progress and
backlogs.

In this respect it gives me pleasure to note that under the uncompromising
leadership of our Premier Mme Dipuo Peters, tremendous progress has been
recorded in terms of both provision of basic services to our people and the
extension of social security to those in need. Amongst other things a total of
5 895 housing units in the period 2004-2006 have been constructed. Out of a
total of 24 390 by December 2005, 17 544 bucket sanitation units have been
replaced. This has put the province on course for the 2007 target of
eradicating the bucket system. In 2006, 162 Public Ordinary Schools became no
fee schools benefiting about 70 603 learners. In the extension of social
security safety net to the vulnerable, the province has reached 19 540
beneficiaries out of the target of 25 149.

Economic overview

Madame Speaker, in tabling the 2007/08 budget we are encouraged by the fact
that our collective and concerted interventions in the provincial economy in
the past two years are starting to bear fruits. Last year we announced that in
2004 the provincial economy grew by 2,7 percent. The recently released StatsSA
statistics reveal that the Northern Cape economy grew by 3,9 percent year on
year during 2005. This makes us confident that when the 2006 economic growth
statistics are released our province may come within 4-6 percent rate as set
out in the provincial growth and development strategy.

Although we welcome this development we recognise the need for us to
increase efforts aimed at accelerating economic growth as well as
redistribution of resources. We also note that the growth in our economy
continues to depend mainly on the primary sectors of mining and agriculture.
The growth in the primary sector in 2005 can be attributed to a very good year
for the agricultural sector in the Northern Cape. In this regard, we need to
double our efforts aimed at diversification of the Provincial economy as set
out in the Provincial Growth and Development Strategy (PGDS).

Nonetheless we must recognise that other sectors of the economy are
beginning to make slow but very significant progress. Amongst other things, the
services sector made a significant contribution to the economic performance in
the province during 2005 with a growth rate of higher than 5 percent. The
biggest contributors to the growth in the services sector was the finance, real
estate and business services sectors, with a growth of 7,6 percent. This growth
in the services sector includes the contribution of the provincial government
to the local economy. The secondary sector highlights a need for improvement
with a contribution of only 7,1 percent to Gross Domestic Product per Region
(GDPR) during 2005.

The sub-sector with the highest year on year growth rate was construction
which grew by 8,9 percent during the period 2004 to 2005. One should however
caution that this growth was from a very low base as this sector's contribution
to the provincial economy remained low at 1,4 percent in 2005. The contribution
of the Northern Cape economy to the national economy remains at 2,2 percent
albeit the recorded growth.

Puso ya kapa Bokone e ikemiseditse go dira mmogo le baagi mo ntweng
kgatlhanong le botlhoka tiro. Maiteko a rona mo dingwageng tse pedi tse di
fetileng a bontsha fa go nale tswelelopele mo ntlheng eno. Goya ka dipalopalo
tsa StatsSA botlhoka tiro mo Kapa Bokone bo fokotsegile go tswa go dipersente
dile some a mabedi le borobongwe ka Mopitlwe 2005 go ya go dipersente dile some
a mabedi le boraro ka Mopitlwe 2006. Dilo tse ntle di a itirelwa. Ruri
ngwagakgolo ya tshepo e atametse, mme mahube a naka tsa kgomo a simolola go
bonala.

The progress being made with regard to creation of work is not only
demonstrated by statistical data provided by various institutions but also
because our people feel that we are making progress. According to the study
conducted by Markinor which assessed how well government is reducing
unemployment and creating jobs from provincial perspectives, seven out of ten
residents in the Northern Cape believe that the government is reducing
unemployment very or fairly well. This demonstrates the impact of the work of
our government on the residents of the province.

Although considerable progress is being made with regard to the
interventions and targets set in the Provincial Growth and Development Strategy
much needs to be done in order to accelerate the current rate of economic
growth and development in general. The demands of a more complex and changing
economy characterised by increasing use of information technology, more complex
technologies and a general rise in the skill requirements of jobs, means that
our people must possess rising levels of applied competence. It is for this
reason that government, business and labour organisations established the Joint
Initiative on Priority Skills Acquisition (JIPSA). The purpose of this
initiative is to speed up the acquisition of skills most needed in our country
to help the economy grow.

In the context of our province a number of initiatives have been implemented
in order to give effect to the objectives of JIPSA. Amongst other things in
January this year we launched the Human Resources Development Strategy. The
objective of this strategy is to accelerate skills development in the six key
areas enshrined in the PGDS.

Tot hierdie effek is n vaardigheids ontwikkelings projek tans in n
gevorderde staduim, dit is daarop gerig, om n wesenlike bydrae te maak tot die
vaardigheids vlak van die Noord Kaapse ekonomie. Hierdie projek beoog om 1694
leerlinge op te lei teen n koste van R100 miljoen oor n tydperk van drie jaar.
Meer as n duisend van die begunstigdes sal op gelei word in leerlingskap en
vaardigheids opleiding in kleinsake ondernemings (smme). Daar word beoog dat
hierdie ingrypings n drastriese impak sal maak op die provinsie se ekonomiese
groei asook werkloosheid en om armoede te bekamp.

In 2006 we announced the full implementation of the Northern Cape Supply
Chain Management (SCM) policy resulting in decentralisation of supply chain
processes to respective government departments. This process culminated in the
phasing out of the Northern Cape Provincial Tender Board. Apart from giving
expression to government policies on Broad Based Black Economic Empowerment and
Preferential Procurement one of the biggest challenges in this respect is
building the necessary supply chain capacity across all provincial departments
and municipalities. To this end, the Premier ordered generic training of
persons involved with supply chain management in the province. It gives
pleasure to note that considerable progress has been made in this regard.

Amongst others, fourteen SCM practice notes have been issued to provincial
departments since 1 April 2006 to support the implementation of provincial
supply chain policy and 51 officials have been trained around SCM by the South
African Management Development Institute (SAMDI). In Municipalities 117
officials received similar training from SAMDI. Our training has also extended
to business resulting in 78 entrepreneurs being trained on a basic bid
procedure course and the compilation of business plans within the province.
Recognising the need to continuously support departments around supply chain
process a help desk has been established for this purpose. We are mindful that
proper implementation of the Supply Chain policy may contribute immensely to
both transformation and growth of the provincial economy.

At this stage, Madam Speaker, I turn my attention to the issue of fiscal
management. The manner in which we manage the financial resources of our
province is central to achieving the objectives of halving poverty and
unemployment by 2014. During the past two years the provincial government has
implemented various measures aimed at dealing with the challenges of weak
financial management and installation of fiscal discipline. In the main, these
measures were intended at positioning our fiscus better to allow us to further
intensify the fight against poverty and create work. Under the astute
leadership of the Premier and the collective will of the Executive Council
considerable progress has been recorded in this regard.

It gives me pleasure to note that today we table a budget that is not only
credible but also conforms to the broad developmental agenda of the government
elected by the multitudes of Northern Cape residents in the 2004 general
elections. It is a product of transparent and consultative process aimed at
giving expression to the needs of our people. Inter alia, we are proud to note
that our budget is able to fund all national policy priorities and that social
spending has increased considerably. Through this budget we aim to first and
foremost intensify the fight against poverty, create an environment conducive
for sustainable accelerated economic growth that is able to create job
opportunities for our people.

An analysis of our spending trends reveals that there has been considerable
improvement in spending amongst all sectors. Amongst others as of the end of
January, 82 percent or R3,7 billion of the adjusted budget had been spent
across all departments of which most departments projects to spend within the
allocated budget. However, it is still necessary to reflect on whether the
provincial government receives value for money? If we are to make any
significant impact on the poverty and development situation of our province, it
is critical that our spending speaks directly to the priorities of government.
An important and positive development in this regard is that government has
moved towards performance budgeting. Implementation of this initiative allows
us to assess and evaluate the impact of the budget on the lives of our people.
In this respect departments are already reporting on a quarterly basis on set
outputs.

Madam Speaker, today marks the third year of the implementation of the debt
redemption strategy. This naturally compels us to reflect on the progress made
in this regard.

Members would recall that during the 2004/05 financial year the total
cumulative provincial debt totalled R845,6 million. The province managed to
reduce this cumulative debt to only R430,7 million as at the end of 2004/05. An
amount of R168,5 million was set aside during 2005/06 to further reduce this
debt to R262,2 million. However, this could not materialise as the Standing
Committee on Public Accounts (SCOPA) could not consider the unauthorised
expenditure in that particular year. A further R95 million in 2006/07 (R85
million plus R10 million), R95 million in 2007/8 and R113 million has been set
aside to finally clear the debt by the end of 2008/9 financial year. This is
based on the assumption that no department will overspend.

One of the peculiar challenges facing our province is the difficulties or
inability to attract required levels of skill in all areas and financial
management in particular, amongst municipalities and provincial departments.
This situation requires us to explore other innovative ways through which the
entire province including municipalities can benefit from the existing limited
skilled human resources.

In this respect the province is considering introducing the concept of
Shared Services. The main aim of this initiative would be to centralise back
office functions in order to allow departments to concentrate on their core
functions as well as to provide technical and financial management support to
municipalities in the province. A feasibility study will be conducted with the
purposes of assessing the appropriateness of this model and or to recommend
alternative ways of dealing with this challenge.

It is important to note that our approach on fiscal discipline and sound
financial management remains unchanged. Our provincial government remains
committed to ensuring effective implementation of the debt redemption strategy
by translating our commitment to this strategy into action. We do so in
recognition of the fact that slow progress in addressing the debt situation of
the province denies us an opportunity to effectively and efficiently address
the challenges of poverty and underdevelopment.

One of the pressing challenges in fully achieving the objectives of our
fiscal policy is the need to augment provincial own revenue. By now it is an
open secret that provincial own revenue forms a very small proportion of total
provincial revenue which stands at an average of 2,6 percent over the period
between 2003/04 and 2009/10 financial years. On the other hand the total actual
own revenue collection experienced a nominal growth of 13,3 percent and
negative growth of 2,8 percent in 2004/05 and 2005/06 respectively. Our
forecast shows a growth rate of 11,3 percent in the 2006/07 and 12 percent
growth is projected for the 2007/08 financial year.

Motor vehicle licence fees, which is the single largest contributor to our
own revenue is projected to increase by about 7 percent from R66 million
2006/07 to R70 million in 2007/08 financial year. Furthermore we expect a
further increase at an annual average of about 6 percent to R78 million in
2009/10 financial year. This increase is in part as a result of the new
provincial demarcations.

Our provincial government will continue to explore ways through which own
revenue could be augmented and collection improved. In this respect the
following interventions would be developed and implemented: Provincial Own
Revenue Enhancement Strategy; policies and procedures for the management and
control of revenue collection; adequate Information Technology (IT) system for
monitoring and controlling outstanding amounts and debts; as well as
application of existing policies and procedures governing debt management. To
this effect an amount of R4,7 million over the Medium Term Expenditure
Framework (MTEF) will be allocated for upgrading of the National Traffic
Information System (NaTIS) data system.

Madame Speaker, without commitment and dedication towards maximising the
generation and collection of own revenue by relevant institutions these
initiatives would be undermined. Therefore we need to ensure that the strategic
objectives of major revenue collecting departments address revenue collection
as a strategic question. Accordingly, an amount of R2,4 million over the MTEF
has been allocated to the Department of Safety and Liaison to build capacity
for optimal revenue collection and management.

Local Government

Part of the common purpose we talk about is the continued support to the
municipalities, both technical and human resources. To realise the objectives
of integrated planning and development, we need to allocate adequate financial
resources to this important sphere of government, which is at the coalface of
service delivery.

The government's commitment to building the strong local government, as
envisaged in the Five Year Strategic Agenda, is further illustrated by the
conditional grants as outlined here below:

* Municipal Infrastructure Grant for the next three years stands at R443 082
million.
* For the purpose of promoting reforms in financial management by building the
capacity in municipalities to implement the Municipal Finance Management Act
(MFMA) a grant of R47,3 million has been set aside over the MTEF.
* The Department of Water Affairs and Forestry (DWAF) is transferring about
R42,5 million to Kgalagadi and Frances Baard Districts for subsidising water
schemes to be transferred to municipalities.
* In order to assist the municipalities to improve their internal
administrative system and governance as required by the Municipal Systems Act,
2000 a grant of R75,4 million over the MTEF is made available.
* Bucket eradication remains a key and urgent delivery point for our people.
For this reason a grant of R34,8 million has been set aside for 2007/8
financial year. We are still committed to complete eradication of buckets by
December 2007 as announced by the State President two years ago.
* To provide for accelerated planning, establishment, construction and
improvement of new and existing public transport and non-motorised transport
infrastructure, a grant of R11 million for the 2007/8 financial year is made
available.
* A total amount of R24,6 million over the MTEF is allocated to Municipalities
for purposes of subsidising community libraries in order to enable communities
to gain access to knowledge and information that will improve their social,
economic and political situation.

Infrastructure

Madame Speaker our point of departure remains that provincial economic
growth and creation of work can be significantly enhanced through investment in
infrastructure development. The commitment of our provincial government in this
regard is demonstrated by the fact since 2004 a total amount of R1,6 billion
has been spent on infrastructure. Some of the developments worth noting in this
regard includes but are not limited to the Mayibuye Multi-purpose Cultural
Centre project in which government has already invested about R46 million, the
Kimberley Psychiatric Hospital, Barkley West Hospital, planning and design of
the access road to the Square Kilometre Array (SKA) project.

We have impressed upon this house in the past that 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. It is encouraging indeed to
note that this approach is bearing fruits as far as job creation and poverty
eradication is concerned. This point is demonstrated by the report of the
Premier during the State of the Province Address that 10 000 jobs have been
created through our infrastructure development programme since 2005.

Madame Speaker, although remarkable progress has been made around
infrastructure development in the province there is still a need to improve
infrastructure delivery processes. It is for this reason that in the past two
years considerable efforts were dedicated to the improvement of the
Infrastructure Delivery Process. Amongst other things the Infrastructure
Delivery Improvement Programme (IDIP) was designed in order to address
challenges relating to planning as well as slow and poor quality of spending of
infrastructure budgets.

Although this programme has been implemented in the past two years, a number
of challenges remain particularly around the spending of Capital Expenditure
(Capex) Budgets. Our own analysis of the prevailing challenges reveals the lack
of forward planning, poor alignment of planning and budgeting cycle for
infrastructure projects, inadequate assessment of infrastructure plans and
budgets by departments and the commitment of large multi-year projects to one
financial year as the main causes of underspending problems.

In order to address these, Parliament has approved the framework to align
the infrastructure delivery cycle with the MTEF budget cycle with the view to
improve planning and deal with the fourth quarter expenditure spike. The
infrastructure Delivery Cycle will be amended to include an Infrastructure
Programme Management Plan (IPMP) and Infrastructure Programme Implementation
Plan (IPIP) which will be mandatory for all infrastructure departments. This
framework will require the appointment of appropriately skilled built
environment professionals across all relevant departments and local
government.

The total infrastructure budget for the province amounts to R769 million,
R875 million and R1,024 billion in 2007/08, 2008/09 and 2009/10 respectively.
Included in the total infrastructure budget is the Provincial Infrastructure
Grant which amounts to R351,3 million; R390,6 million and R456,2 million in
2007/08, 2008/09 and 2009/10 respectively. These allocations were allocated to
the infrastructure departments: Education increases from R26,8 million in
2006/07 to R48 million in this financial year; Transport, Roads and Public
Works increases from R155 million in 2006/07 to R258 million this financial
year; Health increases from R11,9 million in 2006/07 to R36 million this
financial year while Agriculture and Land Reform increases from R3,2 million in
2006/07 to R8,8 million this financial year.

In order to ensure that these allocations give us value for money, the
provincial government is setting up mechanisms to monitor the implementation of
the infrastructure projects in terms of quality, timeous delivery and social
impact. In addition national government has deployed technical advisors to
further boost and improve our infrastructure delivery.

Fiscal Framework

Madame Speaker, a number of factors underpin the framework of the budget we
table today. Amongst others the demarcation of provincial boundaries to
incorporate Kgalagadi and Pampierstad into the Northern Cape, has had a
significant impact on the total envelope of resources available to our
province. In addition, rebasing conducted by StatsSA has adjusted our
population figures by 198 000 marking an increasing from 903 000 to 1,1
million. This represents an increase of 22 percent on our total population
figures.

This development has impacted on the education, health, basic services,
poverty and economic activity components of the equitable share because of the
inter-provincial movement or migration of population and school learners. These
components were updated in the equitable share formula.

The new provincial equitable share has increased our baseline from R3,790
billion to R4,598 billion in 2007/08 financial year. This represents a total
increase of 21 percent or an amount of R807 million, of which R652 million
comes as a result of new provincial demarcations. Madame Speaker this
represents a very significant increase on total provincial budget.

Although this development is welcomed we need to be mindful of the
challenges that come with the new demarcations. Inter alia, we need to further
extend services to the incorporated areas particularly around Education, Health
and Social Development whose norms and standards differ to that of the
pre-demarcation Northern Cape areas. For an example North West norms and
standards on Social Services per capita funding for 2006/07 financial year is
R106 while in the Northern Cape it is R206 representing a funding gap of R144.
This means that we need to dedicate more resources in these areas to ensure
consistent and equitable delivery of services across the entire province.

Regarding our fiscal outlook, similar to last year's budget, we are
budgeting for surplus of R597,8 million over the MTEF, of which R488,7 million
over the MTEF is set aside for debt reduction including the unforeseeable and
unavoidable expenditure which may arise as a result of demarcation and R97,2
million is set aside for the Government Employees Medical Scheme (GEMS).

The total provincial revenue including conditional grants and provincial own
revenue amounts to R5,8 billion, R6,5 billion and R7,3 billion for 2007/08,
2008/09 and 2009/10 respectively. The total expenditure for the respective
financial years is R5,7 billion, R6,3 billion and R7 billion. A total
percentage of 73 is allocated to the social sector which increases to 74
percentage in the outer years. Economic sector receives 21 percent in the
current year, 20 percent in 2008/09 and 20 percent in 2009/10. The remaining 6
percent is allocated to the Governance and Administration in the first two
financial years and reduces to five percent in the outer year.

Compensation of employees accounts for R3,1 billion or 55 percent of the
total 2007/08 budget. Transfer and subsidies which includes transfers to public
entities and municipalities accounts for R654 million or 12 percent while
capital expenditure including infrastructure expenditure amounts to about R567
million or 10 percent of the total budget. Goods and services which include
medicines and learner support material account for R1,3 billion or 23 percent
of the total budget.

A large proportion of our additional allocations seek to consolidate
education, health, social welfare services and infrastructure (social and
economic) programmes prioritised during the tabling of the 2006 Budget. In
particular, the additions to the provincial equitable share are aimed at
strengthening the ability of provinces to improve access to and quality of
public services; address vulnerability and inequality through proper targeting
of services; increase investment in communities to ensure sustainable
livelihoods; and develop the skills needed for the economy through enhanced
education and training.

In this regard a total additional amount of R651,4 million, excluding
demarcation funding, over the MTEF is allocated, of which:

* R459,9 million over the MTEF is allocated to social services sector to
improve remuneration packages of selected personnel, employment of professional
staff, particularly in health, education and social development.
* R191,5 million in the same spending period to programmes aimed at improving
the quality of social services and to allow for provincial-specific
interventions in social and economic services.

Allocations

Madame Speaker, let me take this opportunity to unpack the specific
allocations for the financial year 2007/08. Individual departmental allocations
can be found in the attached annexure. The following allocations are in
addition to the current baseline allocations, duly adjusted after the new
provincial demarcations.

Governance

The current phase of governance continues to pose serious challenges with
regard to policy co-ordination and implementation in order to ensure integrated
and coherent provincial and local economic development. As we reach the middle
of a term of government that began in 2004 there is a need for evaluation of
progress made and identification of shortfalls. Effective implementation of
these activities requires adequate human and financial resources.

In order to address these challenges an additional amount of R25,7 million
has been allocated over the MTEF period in order to ensure that the Office of
the Premier renders efficient management as well as effectively monitor and
evaluate the implementation of policies and programmes by provincial
departments. This allocation will also ensure that the Provincial
Administration continues to benefit from the strong and uncompromising guidance
of the Office of the Premier.

The additional allocation to the legislature is R39,5 million over the MTEF
period to amongst other things build the research capacity and extend public
education programmes.

Economic Sector

The Premier announced during the State of the Province Address that the
province will continue to work hard to achieve our targeted 6 percent economic
growth for the province and the country. This means that much more needs to be
done in terms of local economic development, attraction of investors,
infrastructure development and improvement of the provincial regulatory
framework particularly around Liquor and Gambling. Accordingly, the following
allocations are proposed in this sector for the 2007/08 financial year:

In accordance with the relevant liquor and gambling legislations, the
relevant public entities should be established to regulate and monitor liquor
trading and gambling and betting activities in the Northern Cape province. The
Department of Economic Affairs is in the process of establishing both the
Liquor and Gambling public entities. This should further enable us to regulate
and control both industries more efficiently and effectively. The Gambling
Public Entity is allocated an amount of R10,088 million over the MTEF, while
the Liquor Board Public Entity is allocated R7,881 million over the MTEF.

In line with our effort to grow the provincial economy through inter alia
foreign direct investment, the province will this year host the Northern Cape
International Trade Expo and an International Investor's Conference.
Furthermore, the Provincial Government has decided to establish an independent
Trade and Investment Agency to house all the investment initiatives of the
province. Accordingly, an amount of R11,034 million has been allocated for
trade expos to be held over the MTEF.

The implementation plan for 5 Year Local Government Strategic Agenda has
indicated Local Economic Development as one of the Key Performance Areas with
set timeframes. In recognition of the importance of local economic development
the Provincial Local Economic Development Framework will be developed in close
interaction and consultation with District Municipalities in order to
strengthen the District Integrated Development Plans (IDPs) and local economic
development initiatives. In this regard an amount of R9,7 million is allocated
over the next three years.

An additional amount of R15 million is allocated to Provincial Economic
Growth Fund over the MTEF in order to further facilitate development of
innovative business initiatives in the province. A further additional amount of
R18,7 million over the next three years is set aside to fund small medium and
micro enterprise (SMME) development as a Provincial Specific Economic
Intervention.

Tourism forms an important part of our strategy to grow, diversify and
transform the provincial economy. This is particularly critical in the context
of the role of our province in the 2010 World Cup processes. Some of the
pressing tasks in this regard includes but are not limited to the roll out of
the Tourism Brand, improved capacity for Environmental Impact Assessment and
the construction of an International Convention Centre as part of the Big Hole
project. In respect of these tasks the Department of Tourism, Environment and
Conservation has been allocated an additional R66,9 million over the MTEF. An
amount of R14 million will be channelled to the Big Hole Project, R8,5 million
for Environmental Impact Assessment capacity building as well as R15,9 million
to accelerate the rollout of the Tourism Brand in order to make the campaign
more visible through advertising, publicity, promotions and so on. These
allocations are over the MTEF period.

Agriculture remains one of the key pillars of the provincial economy and an
important sector that contributes towards the improvement of livelihoods in the
province, by ensuring equitable access and participation in the agricultural
value chain, improve global competitiveness and promotion of sustainable use of
natural resources as well as ensure food security. In this regard the baseline
of the Department of Agriculture and Land Reform is increased by R29,5 million
over the MTEF period. Additional allocations in this regard include an amount
of R20,8 million allocated for Agricultural Support programmes as well as R4,8
million for the Commercialisation of Goats Project. An amount of R3,9 million
over the next three years for the appointment of Industrial Technicians and
Epidemiologists.

The total budget for the Department of Transport, Roads and Public Works
over the MTEF amounts to R1,8 billion of which R864 million pertains to
Provincial Infrastructure Development. An important element of this allocation
will contribute to upgrading of access roads which are expected to contribute
tremendously to the social benefits of the communities by the training and
employment of community members in line with the EPWP principles.

Social Services

Madame Speaker, our government moves from the premise that fighting poverty
and deprivation must form the cornerstone of a democratic government. This year
we have made it our common purpose to intensify the fight against poverty.
Accordingly, we continue to prioritise the social services with over 70 percent
of our budget allocated to the Social Sector.

The Honourable Premier reaffirmed during the State of the Province Address
that it is a standing commitment of government that we should continue
increasing access and quality of education for all our learners. In order to
give expression to this commitment an additional amount of R393,9 million is
allocated to the Department of Education over the MTEF. An amount R305 million
over the MTEF is allocated as conditional grants for amongst other things
Recapitalisation of Further Education and Training (FET) colleges, School
Nutrition programme, Provincial Infrastructure Grant and HIV and AIDS life
skills education. Other policy priorities in this regard includes Rural and
Farm Schools development which receives R28 million over the MTEF and Teacher
Development which allocated R46,7 million over the MTEF.

Our government remains resolute that a healthy nation is central to a better
life and development in general. This means that access to healthcare services
has to improve and communicable diseases prevented. To this end the Department
of Health has been allocated additional R201,7 million over the MTEF for
amongst other things improvement in the Emergency Medical Services and the
Review of remuneration of Health Professionals. This means that the Department
is allocated a total budget of R4,9 billion over the MTEF of which R1,6 billion
or 33 percent represents conditional grants.

Madame Speaker, earlier this year the media in general and the British
Broadcasting Corporation (BBC) in particular incorrectly reported that I quote
"A hospital building programme in South Africa has been put back, to help pay
for the football World Cup which the country is hosting in 2010." Amongst other
things the BBC reports that specifically in the Northern Cape the construction
of the De Aar and Upington hospitals have been delayed as a result. Nothing
could be further from the truth as attested by the budget we table today. The
Health sector undertook a reprioritisation exercise pertaining to the
construction of hospitals. This exercise resulted in a misunderstanding within
this sector. Consultative processes are currently underway at the national
level to find resolution to this misunderstanding. However, the bottom-line is
that no money earmarked for construction of hospitals was shifted to 2010
processes.

Social Services and Population is allocated an additional of R46 million
over the MTEF for purposes of amongst other things employment of Auxiliary
Social Workers, upgrading of salaries for Community Development Practitioners
and children in Children's Homes.

Madame Speaker, our position with regard to 2010 World Cup is that although
we are not hosting any official match, efforts must be made to ensure that our
province benefits optimally from this tournament. The national Deputy Minister
of Sport and Recreation made an announcement that despite the fact that
Kimberley does not have a hosting status it would at least be provided with an
opportunity to host official FIFA 2010 practice matches. In this respect the
Department of Sports, Arts and Culture has been allocated an amount of R13,9
million over the MTEF to prepare and promote the role of the province in the
2010 processes.

In anticipation of the 2010 World Cup increased capacity in the Traffic Law
Enforcement and management in general is of critical importance. In addition
due to the breakdown of road user discipline, traffic law enforcement is
certainly a priority for the province. In this respect an additional allocation
of R7,9 million has been allocated to the Department of Safety and Liaison for
purposes of increasing capacity for Traffic Law enforcement.

The total budget for the Department of Housing and Local Government amounts
to R1 billion over the MTEF. This allocation includes a total amount of R487
million over the MTEF in conditional grants that includes Integrated Housing
and Human Settlement Development Grant. The implementation of the Five Year
Strategic Agenda is also allocated an amount of R27 million over the MTEF.

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 Executive Council 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 2007
* The Budget Statement for the 2007/2008, MTEF including the two outer years
which takes into account Estimates of Revenue and Expenditure.

In conclusion we say:

Common enemy is identified - poverty!
Common weaponry is provided - this budget!
Common spirit is prevailing,
Common purpose is built,
Hence victory is nigh.
Thank you.

Issued by: Department of Finance, Northern Cape Provincial Government
5 March 2007