P Mashatile: Gauteng Prov Budget 2006/07

21 February 2006

Comrade Speaker;
Comrade Premier;
Colleagues in the Executive Council;
Honourable Members of the Provincial Legislature;
Ministers and Members of national Parliament present here today;
Mayors and Speakers from various municipalities;
Heads of Department, Government Officials and Leaders of our Agencies;
Leaders of various political parties;
Leaders of the business community;
Leaders of civil society organisations;
Distinguished guests;
Learners from various schools in Gauteng present here today;
The people of Gauteng;
Comrades and friends:

Introduction

Comrade Speaker, today we are presenting to this House and the people of
Gauteng, a budget that seeks to further restore their dignity. It is a budget
based on the foundations of the first decade of freedom and the realisation of
vision 2014 of halving poverty and unemployment.

This year, being the second year of the second decade of freedom, we are
confident that, gradually, we are succeeding in building a better future for
the people of Gauteng. We are also succeeding in bringing hope where there was
despair, light where darkness prevailed, optimism in the place of pessimism and
have replaced stagnation with progress.

Each day that dawns for the citizens of Gauteng, brings with it
possibilities of reducing the burden of the painful past, that our people
suffered under the apartheid government. Indeed the age of hope is upon us.

From their own direct experiences, our people can attest to the objective
reality that, despite the many challenges that still lie ahead, as the African
National Congress (ANC) government we have done everything possible to honour
our commitments as outlined in our policy documents, the Manifesto, the
Reconstruction and Development Programme (RDP) and the Freedom Charter.

Ours is to continue to eradicate the legacy of the apartheid state and
replace it with a united, non-racial, non-sexist, democratic and prosperous
South Africa that truly belongs to all who live in it, black and white. Comrade
Speaker, we are also presenting this year's budget as we observe; the
celebration of the 50th Anniversary of the historic Women's March of 1956 to
the Union Buildings and the 30th Anniversary of the 1976 Soweto Uprising.

As we observe these important milestones in the history of our liberation
struggle we must recommit ourselves to gender equality and the full
emancipation of women. In this regard, we will continue to ensure that women
and in particular young women continue to occupy the centre stage in our
development programmes.

Furthermore, we will create opportunities for women and youth to become
agents of economic development as part of our agenda to transform the
economy.

We will also contribute towards the 30th Anniversary of the Soweto uprising,
by ensuring that the youth of Gauteng become economically active and are
mobilised and organised to participate in the governance processes. Through the
establishment of the Gauteng Youth Commission, we will focus resources that
will indeed realise our vision of building Gauteng as a beacon of integrated
youth development.

On 1 March, as we go and vote in the local government elections, we will
also mark the end of the first decade of building democratic local government.
The vision to build a developmental local government is premised on the
understanding that the sphere of local government is at the coal face of
delivery of services to our people.

As part of our effort to make Gauteng a globally competitive city region, we
will continue to strengthen our municipalities to be able to deliver quality
services to our people.

Gauteng is an urban province with an ever-changing, dynamic modern society.
This is as a result of the challenges brought about by globalisation. In
response to this reality, we will continue to build a province characterised by
a seamless and integrated approach to governance and a holistic, compassionate
and responsive government.

Comrade Speaker, in celebrating 10 years of the adoption of the first
democratic Constitution this year, let us remember its preamble that directs us
to "improve the quality of life of all citizens and free the potential of each
person." It is also in this context that we present this year's Budget.

The Economic Environment

Comrade Speaker; the spirit of optimism among many of our people is largely
underpinned by the robust performance of our national and provincial
economy.

Our country is experiencing the longest post war economic upswing. Consumer
spending has experienced the fastest growth in 20 years. The business
confidence index, reflecting the private sector's confidence in our economy, is
at its highest in 23 years.

In the corporate sector, profit margins and the performance of our stock
market continue to be buoyant and this should be supportive of new business
investment and expansion.

Capital inflows continue to reflect confidence in the South African economy.
South Africa attracted capital inflows of up to 6.1% of gross domestic product
(GDP) in 2004 and it is expected that the figure for 2005 will be 6.5% of GDP
and rising in 2006.

As a major contributor to our country's GDP, accounting for over 33% of GDP,
Gauteng has contributed massively to the robust performance of our national
economy.

Our province continues to sustain higher levels of economic growth, above
the national average. Of significance is that the sustained growth of the
provincial economy has resulted in the creation of job opportunities and a
reduction in unemployment.

As indicated by the Premier in the State of the Province Address,
unemployment in Gauteng has declined from 30,4% in September 2001 to 22,8% in
September 2005. We are further encouraged by the outlook for the provincial
economy which remains positive. We estimate that in 2006 Gauteng could see a
real GGP growth rate of well above 5,5 %, taking us within reach of our target
of growing the provincial economy at a rate of 8% by 2014.

This will strengthen our efforts aimed at positioning Gauteng as a gateway
to the Southern African region and becoming the economic hub of Africa.

Achievements

The spirit of optimism currently sweeping our country and the robust
performance of our economy are some of the critical factors that put us in good
stead to tackle the challenges we face and to respond in a comprehensive way to
the genuine aspirations of the people of our province.

Already in the past two and half years we have made considerable progress in
responding to the aspirations of our people.

We have made significant progress in enabling faster economic growth and job
creation through the implementation of the provincial Growth and Development
Strategy (GDS) and the establishment of the Gauteng Enterprise Propeller, an
agency that provides financial and non-financial support to small, medium and
micro-enterprises (SMMEs) and co-operatives in Gauteng.

We have completed the provincial Broad Based Black Economic Empowerment
(BBBEE) Strategy which together with our drive to develop SMMEs will facilitate
the achievement of our objective of ensuring that 70% of government procurement
benefits BBBEE companies and that 40% of government procurement is targeted at
SMMEs and co-operatives by 2009.

Considering that we as the provincial government procure goods and services
to the value of more than R 6 billion per annum through the Gauteng Shared
Services Centre alone, this will be a massive injection towards broadening the
empowerment of the previously disadvantaged, Africans and women in
particular.

Collectively, these interventions continue to contribute towards reducing
the gap between the first and the second economy and have broadened
participation in the economic mainstream.

Our continued investments in infrastructure projects and the Expanded Public
Works Programme (EPWP) have enabled faster economic growth and job creation.
Over 10 000 jobs have so far been created from the implementation of the
EPWP.

We continue to direct more resources towards primary health care, Bana Pele,
providing school uniforms to the poorest children, free scholar transport for
children in rural and farm areas and the improvement of Science and Maths
teaching in our public schools and implementing our comprehensive programme to
combat HIV and AIDS.

In line with our commitment to fight poverty and build safe, secure and
sustainable communities, we continue make significant progress in housing our
communities in well located land. We are also making progress in the
formalisation of informal settlements. Thus far, more than 3 million residents
of Gauteng have benefited from our programme to provide housing.

Through infrastructure investment, we will be making strides in upgrading
facilities in the 20 identified townships. As indicated by the Premier in his
State of the Province Address, resources to the tune of R3 billion will be
utilised towards the improvement of infrastructure in the 20 identified
townships.

These interventions will also form part of our contribution to the success
of the Accelerated Shared Growth Initiative of South Africa (ASGISA). Our core
objective remains halving poverty and unemployment by 2014.

Comrade Speaker, we continue to deepen democracy and ensure that the
constitutional rights of our people are realised. This we are doing through
regular engagements with communities, by calling Izimbizo and engaging in
community outreach programmes.

Furthermore, we have launched the GPG portal as part of our commitment
towards strengthening participatory democracy. This also contributes towards
building an effective and caring government.

Through the Blue IQ project, we continue to improve the strategic economic
infrastructure of our province and are contributing towards reducing the cost
of doing business.

Our efforts to position Gauteng as a preferred destination for competitive
sport, film making and production, tourism as well as foreign and domestic
investment continue to bear fruit.

Challenges

As the spirit of optimism continues to prevail among our people let us not
be complacent and rest on our laurels. In-migration into the Province has
resulted in a huge increase in population, estimated at 8,8 million people
currently. The number of children in public schools has grown to about 1,8
million.

This has resulted in huge backlogs in infrastructure in our communities and
the persistent unacceptable levels of poverty and unemployment.

We will also face challenges as a result of changes in provincial boundaries
that have seen areas such as Winterveld, Ga-Rankuwa, Hammanskraal and Mabopane
being incorporated into Gauteng.

In the next three years we will have to redouble our efforts in accelerating
service delivery and infrastructure investment. In this regard one of the
immediate challenges we have to address is to realize the eradication of the
bucket system by the end of this financial year.

Revenue and Expenditure

Comrade Speaker, allow me now to proceed to the allocations for this year's
Medium Term Expenditure Framework (MTEF) Budget. Correctly so, this year's
budget is reflective of the political priorities of our province. It builds on
progress we have made towards the goals we have set for ourselves in our Five
Year Strategic Plan and is in line with the Medium Term Budget Policy Statement
(MTBPS) we tabled before this House in November last year.

The 2006/07 MTEF budget is grounded on the reality that as a Province we are
growing ever more confident of our ability to respond to the aspirations of our
people without loosing sight of the existing and anticipated challenges brought
about by rapid urbanisation.

Projected revenue for 2006/07 is R33,828 billion, comprising;

a) Equitable share transfers of R 23,362 billion
b) Conditional grants of R8,744 billion from national government and
c) provincial own revenue is projected at R1,758 billion after taking into
account agency fees for the collection of revenue.

We would like Honourable Members to note that there is a major change in the
provincial fiscal framework for the 2006 MTEF. This is as result of the shift
of the social security grant function from the province to national
government.

The South African Social Security Agency is now in a position to administer
the social assistance function from 1 April 2006.

Estimates for revenue have therefore excluded allocations for social
security grants for the MTEF period. Amounts excluded from the Budget are
R7,669 billion for 2006/07, R8,324 billion for 2007/08 and R9,083 billion for
the 2008/09. A total of R25,206 billion has shifted out of the Gauteng Budget
for the MTEF period.

Even with this shift, revenue still rises significantly from R33 billion in
2006 to R40 billion in 2009.

Comrade Speaker, total expenditure for 2006/07 amounts toR34,6 billion.
However additional allocations for the Government Employees Medical Scheme
(GEMS) and the Social Development Strategy have been set aside to be allocated
pending the finalisation of plans.

The expenditure for the 2006/07 financial year exceeds revenue by R783 8
million or 2,3% of total revenue. This is as a result of carry through costs
for funding of personnel in the Department of Education. The Department had to
employ more teachers as a result of the increased number of learners in our
public schools.

This difference will be funded by accumulated reserves from the Provincial
Revenue Fund.

Over the MTEF, expenditure rises to R36, 3 billion in 2007/08 and to R39
billion in 2008/09. Expenditure on the Budget grows significantly by 25% in the
2006/07 financial year and by an average of 12,2% in nominal terms thereafter
in the MTEF period.

We wish to emphasise that the rationalisation and increased efficiency of
budgetary expenditure will be key elements in eliminating over and under
expenditure by Departments.

Comrade Speaker, Provincial revenue is projected to increase by a total of
R5,9 billion or 17,7% over the MTEF. These increases are driven by substantial
additions to national transfers, mainly the contribution to the Gautrain
project and by increased provincial own revenue as a result of the strong
performance of the Gauteng economy.

The provincial own revenue is estimated to grow at an average of 7,9% in
nominal terms over the MTEF period increasing from R1,76 billion in 2006/07 to
more than R2 billion in the outer years of the MTEF.

Revenue raised from vehicle licenses, which accounts for 50% of the
provincial own revenue, continues to show a positive increase.

Honourable Members, as part of our efforts to increase provincial own
revenue the following adjustments on motor vehicle license fees are
introduced:

a) An average fee increase of 6,6% on miscellaneous fees
b) An average 8,5% increase on the registration and license fees of different
categories of motor vehicles
c) An increase ranging between 4,1% and 12,5% on fees relating to permits for
abnormal motor vehicles and transportation of abnormal loads

These proposed fee increases will take effect as from the 1 April 2006.

Since inception to date, taxes collected by the Gauteng Gambling Board on
behalf of the provincial government amounted to R2,69 billion. Taxes collected
for the 2005 financial year amounted to R392 million and for 2006 are expected
to be in excess of R400 million. Casino taxes are expected to grow by 5,8% per
year during the MTEF period.

As from the 1 April 2006, application fees and license fees for gambling
will increase by 6%.

Last year, during the presentation of the 2005/06 budget, we announced that
we will begin to investigate measures that will assist us to increase
provincial own revenue. Significant progress has been made in this regard and
proposals will be announced when we table our 2007/08 budget.

Comrade Speaker, we are encouraged by the fact that estimated revenue of
about R40 billion by the 2008/09 financial year will result in a surplus of
R810,1 million in the Provincial Revenue Fund, thus giving us scope to address
funding pressures in our programmes.

Social versus Economic Cluster allocations

Over the past years, we have ensured adequate funding for the social
services cluster, resulting in the split of 80:20 ratio in budget
allocations.

For the 2006 MTEF the social services cluster will receive a combined
allocation of 69% of total expenditure for the 2006/07 financial year. The
decrease of the social sector share from 80% of the total budget in the
previous financial year to the current 69% is as a result of the shift of
social security grants from provinces to the new South African Social Security
Agency. We wish to reiterate that social services such as Health, Education and
Social Development will remain adequately funded over the MTEF.

As we indicated in the Medium Term Budget Policy Statement, we will in this
year's Budget and those subsequent to it, increase allocations for capital
expenditure which will be directed towards infrastructure projects that will
serve as a catalyst to economic growth and job creation.

I will now move to how this year's Budget will be allocated to individual
Departments.

Department Of Health

The provincial Department of Health receives additional amounts of R218
million, R204 million and R402 million for each respective year of the MTEF.
This additional funding will be used to fund the following priorities in line
with our strategic objective of developing healthy, skilled and productive
people:

a) Enhance human resource management by recruiting health professionals and
creating incentives for retaining staff in the professional health
sector;
b) Expand emergency medical services and implement the new national ambulance
services model;
c) Medical Equipment for the Pretoria Academic Hospital
d) Primary health care allocations include allocations for district management,
community based services, community health clinics and community health centres
to expand primary health care and improve services in rural areas;
e) The allocation for the modernisation of tertiary services will be used for
digitisation and equipment in central hospitals. The amount allocated for
information services will be used to deal with information technology issues in
Health.

Conditional grants amounting to R3 billion will be used during 2006/07 to
fund improvements in the tertiary sector (central hospitals), hospital
revitalisation, provincial health infrastructure in twenty priority townships
and a comprehensive HIV/AIDS programme. Conditional grants will amount to R10
billion over the MTEF period.

Out of this amount R250 million will be used for improvements and provision
of health facilities in the 20 identified townships over the next three
years.

Our HIV/AIDS programme will receive an amount of R1,6 billion over the next
three years.

Comrade Speaker, the total budget for the Department of Health will be R10,4
billion in 2006/07 rising to R 11billion in 2007/08 and R11,9 billion by
2008/09. This represents an average 6,5 % increase over the MTEF period.

Department of Education

To respond to some of the serious pressures placed on service delivery by
in-migration to our province, the Department of Education receives additional
amounts of R133,4 million, R469 million and R875 million for each respective
year of the MTEF. These funds will be used to fund the following
priorities:

a) Reduce the backlog in school equipment;
b) Expand early childhood development;
c) Provide for teacher development and human resource management systems;
d) Extend the implementation of the new curriculum statement to grades 10 to
12;
e) Implement revised norms and standards for school funding;
f) Strengthen special schools and expand information management systems;
g) Implement the no fee school policy

Conditional grants amounting to R389 million will be prioritised to fund
Further Education and Training (FET) College Sector recapitalisation, the
national school nutrition programme, HIV/AIDS (life skills) education and
provincial education infrastructure in the 20 priority townships. These
conditional grants will amount to R1,3 billion over the MTEF period. Of this
amount R498 million will be used to improve education facilities in 20
identified townships in the next three years.

Honourable Members, one of the binding constraints identified by ASGISA to
accelerated and shared growth is the shortage of skilled labour. Skills
development is necessary for us to achieve the kind of economic growth rates we
envisage. Skills development is also critical to increase the capacity of the
state to deliver on the mandate of government.

In realising this objective, through quality and upliftment programmes, the
Department of Education will focus on creating partnerships with institutions
of higher learning and the private sector. This is an important task as it will
help us produce learners, students and intellectuals who will contribute to the
realisation of our objective of shared growth and pursuing the objectives of
NEPAD.

The total Budget for the Department of Education is R12,2 billion in the
2006/07 financial year rising to R13,3 billion and R14,5 billion respectively
in the two outer years of the MTEF. This translates into an average 16%
increase over the MTEF.

Department of Social Development

Consistent with our commitment to expanding the social security net and
welfare services as a measure of alleviating poverty, the Department of Social
Development receives additional amounts of R75,6 million, R217,9 million and
R423,2 million respectively over the MTEF years.

Now that the Department does no longer have the function to manage social
security grants, greater attention will be given to the implementation of the
Social Development Strategy. The Department will become a catalyst in ensuring
the enhancement of social cohesion in our communities.

The additional resources will be used for the following priorities in line
with our objective a building a caring government:

a) Implementation of the Child Justice Bill, Children's Bill and the Older
Person's Bill;
b) Early childhood development and EPWP which will contribute towards the
creation of work through the HIV and AIDS Community Home Based Care
Programme;
c) HIV and AIDS and Integrated Social Development Services Grants;
d) Expanding existing social welfare services;
e) Adjustment to the salaries of social workers

In total, the Department of Social Development receives R981,7 million in
2006/07, rising to R1,1 billion in 2007/08 and R1,3 billion in 2008/09,
representing an average of 17% increase over the MTEF.

Department of Housing

Our drive to build safe, secure and sustainable communities will benefit
massively from allocations that will be made to the Department of Housing in
the form of conditional grants. In the 2006/07 financial year the Department
will receive conditional grants amounting to R1,7 billion in 2006/07, R2,2
billion in 2007/08 and R2,4 billion in 2008/09.

The increased allocations will be spent on the delivery of housing
programmes, formalisation of informal settlements and ensuring mixed income
communities on well located land.

The Department will receive an amount of R20 million this year to appoint
project managers for the 20 identified townships project.

While funding will be made available in the respective budgets of the
departments of Health, Education and Public Transport, Roads and Works for the
implementation of 20 priority townships project, additional allocations will be
considered once the Department of Housing submits a comprehensive business plan
to the Provincial Treasury.

Additional funding is also made available to cater for the Urban Renewal
Programme focusing on Evaton, Bekkersdal and the Alexandra Renewal Project. The
total allocation for Urban Renewal Projects for the 2006/07 financial year is
R369 million. Of this amount R 172 million will go towards the Alexandra
Renewal Project while Bekkersdal and Evaton receive a combined allocation of
R197 million. Over the MTEF these projects will receive a total of R1,1
billion.

Comrade Speaker, the Department of Housing receives a total budget of R2
billion in 2006/07, R2,5 billion in 2007/08 and R2,7 billion in 2008/09
representing an average 16% increase over the MTEF.

Department of Public Transport, Roads and Works

This Department receives additional amounts of R27,9 million, R75 million
and R225 million for each respective year of the MTEF. These funds will be used
for the construction and maintenance of the provincial road network.

An additional amount of R498 million over the MTEF will be prioritised for
improvements and provision of tarred roads in the 20 identified townships.

The Department will receive an additional amount this year of R4,6 billion
for the implementation of the Gautrain project. This amount is made up of a
R3,2 billion conditional grant from national government and a R1,4 billion
provincial contribution.

An amount of R11,5 billion is set aside over the MTEF period for the
Gautrain project. Additional funding will be made available from private sector
contributions and government borrowing. Arrangements for borrowing are
currently being finalised with National Treasury.

The MEC for Transport will introduce legislation in March for the
establishment of a government agency that will manage the Gautrain project.

The total allocation for the Department of Public Transport, Roads and Works
will be R6,2 billion in 2006/07, R5,3 billion in 2007/08 and R5,2 billion in
2008/09. This translates into a whooping 60,3% average increase over the
MTEF.

Office of the Premier

The Office of the Premier receives an additional allocation of R13,5 million
for 2006/07, R8,4 million for 2007/08 and R8,8 million for 2008/09. The
additional resources will be used to fund the Global City Region initiative,
NEPAD activities, particularly the Peer Review Mechanism and Izimbizo
programmes. Furthermore this Office requires funding to co-ordinate the entire
programme of government.

Comrade Speaker, the Office of the Premier receives a total budget of R118,4
million in 2006/07, R120,5 million in 2007/08 and R125,9 million in 2008/09.
This will be an average 6% increase over the MTEF.

Department of Economic Development

The Department of Economic Development receives a total allocation of R572
million for 2006/07 rising to R589,3 million for 2007/08 and R713,8 million for
2008/09. This is an average 6,3% increase over the MTEF.

The bulk of the funding will constitute transfers to the Provincial Agencies
namely Blue IQ, the Gauteng Economic Development Agency (GEDA), the Gauteng
Enterprise Propeller (GEP), the Gauteng Tourism Authority (GAT) and the Film
Office.

Funding has also been made available for special projects such as Dinokeng,
the Cradle of Humankind World Heritage Site and the Gauteng Provincial
Government (GPG) Precinct. An amount of R55 million is set aside this year for
funding the Dinokeng Game Reserve which will open for business by December
2006.

Department of Local Government

The provincial government will increase its efforts over the next three
years to contribute towards the building of a developmental local government
with an intention to assist in particular District Municipalities. In this
regard, the Department of Local Government in collaboration with the Provincial
Treasury is currently finalising plans to assist District Municipalities.

This programme will focus on supporting municipalities:

a) to develop Integrated Development Plans that speak to the needs of
communities;
b) implementing the Municipal Finance Management Act (MFMA);
c) improving the billing system and
d) project management capacity towards developing specialised skills in local
government.

For this purpose, an additional amount of R50 million has been set aside
this year to be allocated to the Department of Local Government. Additional
funding will be made available on the MTEF budget once business plans are
finalised.

Comrade Speaker, it is in the interest of all of us to ensure that local
government works better and is able to deliver quality services to our
people.

Additional funding has also been made available for the Disaster Management
Centre.

The Department of Local Government receives a total allocation of R160,3
million for 2006/07, R180 million for 2007/08 and R159 million for 2008/09,
translating into an average 21% increase over the MTEF. These amounts will
increase once the R50 million is added to the 2006 budget. Additional amounts
will also be made available in the two outer years of the MTEF period. This
will dealt with during the adjustment budget later this year.

Department of Community Safety

This Department receives a total allocation of R220,1 million for the
2006/07 financial year, R264,3 million and R222,8 million respectively for the
two outer years of the MTEF period. The Department's budget therefore increases
by an average 7% over the MTEF period.

The additional resources will be used for the implementation of a
comprehensive Road Safety Plan that will focus on traffic management and
passenger safety.

Allocations have been made available from the Growth and Development Summit
(GDS) Fund to fund the implementation of a Provincial Integrated Safety and
Security System as part of the preparations for hosting the 2010 FIFA Soccer
World Cup.

Department of Agriculture, Conservation and Environment (DACE)

DACE receives a total allocation of R242 million, R270 million and R223
million for the three MTEF years, representing an average 5% increase.

The additional resources will be used to fund the implementation of the
Gauteng Agriculture Strategy, with greater focus on assisting and developing
emerging black farmers in the province.

The Department will also use the additional funding to promote sectors such
as agro-processing and biotechnology.

Department of Sports, Recreation, Arts and Culture

The total allocation for this Department remains constant over the MTEF
starting with an allocation of R221,2 million in 2006/07, which declines to
R179,3 million in 2007/08 and increases slightly to R189,7 million in
2008/09.

Allocations to this Department will go towards positioning Gauteng as a home
of competitive sport, the hosting of major events and the implementation of the
provincial Arts and Culture Strategy.

Refurbishment of stadia in partnership with municipalities and the sports
fraternity will receive attention ahead of the 2010 FIFA Soccer World Cup.

Additional resources given to this Department will also fund the activities
of the Gauteng Youth Commission.

Gauteng Shared Services Centre (GSSC)

The GSSC's allocation over the MTEF increases by an average of 10,3%
starting at R751,3 million in 2006/07 increasing to R822,3 million in 2007/06
and further increasing to R866,6 million in 2008/09.

The additional allocations will be used to fund the roll out of the Gauteng
e- Governance Strategy. Priority will be given to improving and expanding our
Call Centre Project from the current capacity of 150 seats to 600 seats by July
this year.

GSSC will also embark on a partnership with GEDA to promote the Call Centre
industry in Gauteng. Young people with skills relevant to this sector will be
trained.

We have already partnered with Vodacom to assist the company to locate its
more than 1 000 seats Call Centre into the Central Business District (CBD) of
Johannesburg.

Gauteng Provincial Treasury

The new Gauteng Provincial Treasury will be a separate Department from the
Department of Finance and Economic Affairs as from 1 April this year. It will
focus on the following key areas:

a) Strengthening financial management to achieve operational efficiency and
promote accountability in government;
b) Attracting and retaining an appropriate technical skills base to the Gauteng
Provincial Treasury;
c) Providing technical assistance including analysing, monitoring, evaluating
and advising Departments to enable good financial planning and
management;
d) Developing and implementing efficient internal systems and processes;
e) Investing in and empowering Gauteng Provincial Treasury employees.
f) Assisting municipalities with the implementation of the MFMA

A fully fledged Private Public Partnership (PPP) Unit will also be
established within Treasury to take responsibility of all our current and
future PPP initiatives. This move is necessitated by the fact that National
Treasury has devolved more powers to Provincial Treasuries to handle PPP
transactions.

The total budget for the Provincial Treasury will be R70,4 million in
2006/07, increasing to R86,6 million in 2007/08 and reaching R107,2 million in
2008/09, an average 67% increase over the MTEF.

The Gauteng Legislature

The Legislature receives a total budget of R129 million for 2006/07, R133,3
million for 2007/08 and R125,6 million for 2008/09, representing an average 5%
increase over the MTEF.

Honourable Members, we are currently considering the request of the Speaker
for additional funding to be made available to the Legislature. The additional
funding requested is to take care of additional facilities including office
space for administrative support for Members.

Once office space has been secured, Treasury will ensure that funding is
allocated accordingly. This matter will be dealt with later in the year when we
finalise our adjustment budget.

Comrade Speaker, we are currently working with the Leader of Government
Business to investigate measures that will ensure proper funding of political
parties. We believe it is vital that all political parties involved in our
democratic system of governance should receive adequate funding from the public
purse to be able to engage the electorate on an ongoing basis, thereby
strengthen democratic participation.

Once this work is concluded the Leader of Government Business will present
proposals to the House which might include tabling relevant Legislation for
this purpose. Additional funding will be made available to the Legislature when
we finalise our adjustment budget later this year.

Organisational and Personnel Implications

We received additional amounts of R124,1 million, R249,1 million and R374,9
million over the respective MTEF years for the GEMS. These amounts have not
been allocated as further planning and trends will inform the allocation to
Departments in the 2006/07 adjustment budget.

The Department of Social Development has been allocated additional amounts
of R15 million, R15,7 million and R16,5 million for each of the MTEF years to
adjust the salaries of social workers.

The Department of Health has been given amounts of R16,3 million, R50
million and R100 million respectively over the three MTEF years to enhance
human resource management by recruiting health professionals and creating
incentives for retaining staff in the professional health sector.

The Gauteng Treasury will receive an increased budget over the MTEF, to
recruit further expertise and develop internal capacity. It will also receive
R5,6 million to undertake capacity building initiatives in financial management
in provincial and local government.

Departments were given funds to address all aspects of personnel policy and
other special projects. This includes general salary increases, carry through
costs for personnel and increases in departmental establishments.

Adjustments to baseline amounts took full account of anticipated cost
increases on goods and services, consistent with the inflation outlook
published by the National Treasury.

Growth and Development Strategy (GDS) Commitments

In line with the ASGISA, the GDS identifies some of the key interventions we
as the provincial government will make in order to accelerate the growth of the
provincial economy, create jobs and fight poverty.

Among others, the Strategy seeks to achieve a shared economic growth rate of
8% by 2014.

Over the MTEF period we have set aside more than R1,3 billion which will be
allocated to specific Departments to fund GDS commitments.

The Department of Sports, Recreation and Culture receives a total of R72
million over the MTEF to fund the upgrading of four major stadia in preparation
for the 2010 FIFA Soccer World Cup and promoting Gauteng as a home of
competitive sport. R12 million of this allocation will go towards the
development and implementation of the Arts and Culture Strategy which will
among others invest in programmes aimed at developing the creative
community.

The Gauteng Enterprise Propeller (GEP) receives a total of R250 million over
the MTEF to offer comprehensive financial and non-financial support to SMMEs
and co-operatives in Gauteng.

In order to realise our objective of building an inclusive, wealth
generating economy through the promotion of Gauteng as a preferred destination
for tourism, film making and production, we are setting aside from the GDS fund
a total of R80 million over the MTEF.

Through the work of the GTA, we will ensure that we attract 53% of total
international arrivals to Gauteng and that we substantially increase the amount
and number of days that tourists spend in our province.

We are also setting aside R100 million for purposes of attracting foreign
and domestic investment into Gauteng as well as enabling the GEDA to carry out
its new and broadened mandate of being not only and investment promotion agency
but more broadly an economic development agency.

Over the next three years, Blue IQ will receive R200 million from the GDS
fund to continue the work of improving the economic infrastructure of Gauteng
and reducing the cost of doing business.

The Department of Agriculture, Conservation and Environment receives a total
of R48 million over the MTEF to fund the Agriculture Development Strategy which
will include agro-processing and bio-technology.

The Department of Public Transport, Roads and Works receives R300 million
over the MTEF from the GDS fund. This allocation will be used to develop a
holistic traffic management system to monitor traffic incidents, congestion and
other traffic management issues.

The Department of Community Safety will receive an allocation of R75 million
from the GDS fund over the MTEF to fund a Provincial Integrated Safety and
Security System.

The Department of Housing receives R35 million over the MTEF for the
rehabilitation through infrastructure investment of 20 identified townships
across Gauteng.

In order to enhance interaction between communities and the provincial
government and to give meaning to our commitment to build an effective and
caring government, the Gauteng Provincial Government Contact Centre
administered by the GSSC will receive an allocation of R50 million over the
MTEF from the GDS fund.

Infrastructure Programme

Infrastructure investment forms the cornerstone of our efforts aimed
achieving higher levels of shared economic growth. As ASGISA points out, public
sector investment in infrastructure is one of the critical elements necessary
to move our economy onto a higher growth trajectory.

Infrastructure expenditure over the MTEF will approximate R25,706 billion
with the larger share of the infrastructure budget accounted for by the
departments of Public Transport, Roads and Works, Housing, Health and
Education.

Comrade Speaker, the infrastructure budget for 2006/07 is almost double the
budget for 2005/06. This can largely be attributed to the huge investment in
the implementation of the Gautrain project.

Consistent with our commitment to achieve higher levels of economic growth
and job creation, the expenditure on infrastructure will be directed towards
projects that will serve as catalysts to job creation.

Conclusion

In conclusion Comrade Speaker, the people of Gauteng continue to be
steadfast in their confidence in the ANC led government as their only beacon of
hope. Increasingly, they are becoming convinced that indeed a better country
and a better Gauteng is in the making.

With this budget and the work that we continue to do as the provincial
government, we are hopeful of the realisation of the New Age of Hope.

I would like to end by quoting one of the greatest leaders of the people of
South Africa, former President Nelson Mandela who said in his book the Long
Walk to Freedom: "I have walked that long road to freedom. I have tried not to
falter; I have made missteps along the way. But I have discovered the secret
that after climbing a great hill, one finds that there are many more hills to
climb"

I therefore wish to urge all our public representatives and officials in
government to continue working tirelessly towards building a better life for
all. We must do so, in order not to dampen the spirit of optimism currently
sweeping our country and in particular our province.

We have a responsibility not to let our people down!

Comrade Speaker, in the preparation of this budget we received essays from
the following schools in Gauteng; Katlehong High School; Westonaria Hoerskool;
Kwa-Dedangendlale Secondary School; Leshata Secondary School and Lotus Gardens
Secondary School

We wish to thank learners from these schools for their valuable suggestion
many of which we took into account in the preparation of this budget. We wish
to thank, Marotholi Suzan, Tisetso Keorapetsi, Fatima Raphahlela, Thando Gama,
Floyd Zondo, Buhle Mabaso, Thami Sibiya, Nosipho Luphondo, Christopher Radebe,
Happy Mphela, Masechaba Malefane, Ayanda Kunene, Innocentia Tshehlakgolo,
Perseverance Mpholo, Jeffrey Tseloekoe, Navada Mersich, Jeanette Nkomo, Cynthia
Mphuti and Maria Mthethwa all of whom have submitted well written and
researched essays which proved useful in the preparation of this budget.

I wish also to thank the Premier for his firm and decisive leadership in
ensuring that we deliver on our objectives, my colleagues in the Executive
Council for their collective wisdom in the process of formulating this budget;
Honourable Members of the Finance Committee led by Comrade Bheki Nkosi, Ms
Bongi Kunene and all HODs, government officials and the Treasury team led by
Nomfundo Tshabalala who worked hard to produce the documents before the House
today. I also wish to thank Percy Mthimkhulu and Mduduzi Mbada for working
tirelessly with me in putting together this speech.

Lastly I wish to thank family and friends for their continued support.

Comrade Speaker, I now table the following documents for consideration by
the House:

a) The Budget Statement 2006/2007 (Estimates of Revenue and
Expenditure)
b) The Appropriation Bill G001/2006
c) The Explanatory Memorandum to the Bill
d) Budget Booklet 2006/2007
e) A copy of my speech

Let us not forget that there are many more hills to climb!

Keya Leboga!

Issued by: Department of Finance and Economic Affairs, Gauteng Provincial
Government
21 February 2006