Madam Speaker,
Honourable Premier,
Colleagues in the Executive Council,
Honourable Members of this House,
The HOD and Management of the Gauteng Provincial Treasury,
Comrades and friends,
Ladies and gentlemen.
Introduction
I am grateful for the opportunity to present the 2013/14 Budget Vote Speech of the Gauteng Provincial Treasury. This is the last financial year of Treasury in the 2009-2014 Political Term of Office.
Therefore, the department will consolidate its programme towards key areas that support the achievement of our priorities as reflected in the Gauteng Provincial Government (GPG) Medium Term Strategic Framework. This will enable Treasury, through its work, to tell a story of the provincial government in this political term of office. This is the story that revolves around our finances; the journey that we have travelled to arrive at the stage that we find ourselves today.
It is a story that is stored in the databases, bank accounts and spreadsheets of this provincial government. It can and will be given a voice this financial year through statistical narratives and other means that bring quantitative information and stories to life.
Review of the 2012/13 financial year
Madam Speaker; this year’s budget vote is presented a few weeks after the release of the provincial government’s fourth quarter financial report, which reflects key milestones in areas of spending, cash flow and revenue management.
These, undoubtedly, were achieved due to the fact that during the journey that we travelled since the beginning of this political term of office, we took hard decisions to “ensure that we remained prudent about overall spending, putting emphasis firmly on reprioritisation and better quality of expenditure”.
As a result, we are able to stand before this House today and announce that, amongst other things, the provincial government spent 99% of the total adjusted budget for 2012/13 financial year. This expenditure which amounted to 74.7-billion represented a substantial improvement on the previous year and showed that provincial departments continue to improve spending to meet the service delivery needs of the people of Gauteng.
Furthermore, a total of R8.7-billion was spent on infrastructure projects, and this accounted for 96% of the total budget for the year under review. This is an improvement of 8% year on year. To put this in a proper context; the provincial government recorded a third consecutive year of improvement in infrastructure service delivery programme.
Total infrastructure expenditure has increased from around 73% in 2010/2011 to 86% in 2011/2012, before reaching 96% in 2012/2013. This achievement has been made possible due to various initiatives that have been implemented with regards to project planning, budgeting and implementation. To ensure that we further enhance our performance, Treasury will shortly present proposals on how to improve supply chain management processes for all infrastructure departments.
Madam Speaker, let me now turn to revenue enhancement. Our message throughout this political term of office has been that we will work with all departments to improve the collection of revenue from various sources. We said this because Gauteng’s Own Revenue Generated has been on the spotlight due to the ever-increasing demands for resources to fund the delivery of public services in the province.
In this context, emphasis has been placed on the Treasury to optimise revenue collection and for provincial government departments to present credible revenue projections. Our emphasis on credible revenue forecast is driven by the knowledge that it is a key component of sound fiscal policies geared towards service delivery enhancement.
I am proud to report to this House today that for a third year running the provincial government has surpassed income generated from its revenue sources. Total revenue collected by the province as at end of March amounted to R3, 946 billion. This means that government exceeded its targeted collection for the financial year by R166.981 million. This shows that the measures introduced during this political term of office to enhance provincial revenue growth to fund public service delivery programmes are working.
Madam Speaker, we implemented robust cash management practices throughout this political term of office and this has resulted in positive cash flow levels for the provincial government. This essentially means that the province has sufficient cash to fund the needs of departments. Equally important, prudent investment of our revenues has improved liquidity in the province.
In order to ensure that departments use allocated funds in line with applicable legislation, in particular, the Division of Revenue Act, we ring-fenced conditional grants, infrastructure funds and transfers to municipalities.
As Treasury, we approach our work from the point of view that, first and foremost, we are a strategic partner to our immediate stakeholders. These are the departments and municipalities in the province.
Our work is therefore framed from that perspective so that we could provide leadership, stewardship and oversight in all that we do to ensure efficient resource management and fiscal discipline.
Madam Speaker; driven by the strategic intent that we have outlined above, the work to stabilise and build a strong Gauteng Department of Health that provides quality health care services to the people of our province is continuing as planned.
In this regard, we have appointed PricewaterhouseCoopers as the Administrator who will work with the provincial government to re-engineer business processes in Health. The Administrator has been appointed for a period of two years, and will follow a detail work plan containing a reporting framework with measurable targets and tight timeframes.
We believe that a two-year period is enough to complete this work. This is because our focus is on the provision of efficient and effective public health services to the people of Gauteng. That is why Health must be turned around urgently to fulfil this mandate.
I must emphasise that this intervention does not mean that Health is under administration. We are strengthening the financial management capacity of the department so that it could continue to provide quality health services to the public.
Madam Speaker, Treasury is committed to ensuring that local government works better. In the year under review, we continued with efforts to strengthen intergovernmental relations with particular interest to municipal financial management.
Through the quarterly Municipal Finance Indaba forums, we conducted vigorous bilateral engagements between the MEC of Finance, MEC of Local Government and Housing and Members of the Mayoral Committee for Finance to ensure coordination and continued support.
Furthermore, the Debt Management Committee established in 2009 continued to receive great support from both municipalities and provincial departments as a key platform to resolving outstanding government debt owed to municipalities for rates, taxes and services charges. To date, more than R2 billion has been transferred to municipalities from various departments within the province.
Through the DMC, we have acquired a wealth of knowledge of the local government sphere which will provide the basis to unlock possible blockages in the intergovernmental transfer system. Work has started in terms of extending the scope of this Committee to interface with stakeholders such as national departments and parastatals that have property located in our municipalities.
The 2013/2014 Budget Vote
Madam Speaker; our budget for this financial year is three hundred and twenty million, two hundred and ninety two thousand rand (R320, 292.000). We plan to use these resources to deliver outputs that support the realisation of two provincial Outcomes that the department responds to. These are “A responsive, accountable, efficient and effective local government”; and “Efficient, effective and development oriented public service”.
This will be done taking into consideration that because this is the last financial year of this political term of office, we must consolidate our programmes to reflect progress made on key areas that support the achievement of priorities as presented in the GPG Medium Term Strategic Framework.
Therefore, the Last Mile Agenda of Treasury will focus on the following key areas:
- Operation Clean Audit
- Payment of suppliers within 30 days
- Supply chain management issues
- Fraud and corruption
- Fiscal discipline
Madam Speaker; we remain committed to the achievement of clean audits in departments and municipalities in the province. In the 2013/2014 financial year and in line with our stated view of consolidating our work, we aim to maintain clean audits already achieved and work to improve the audit outcomes of other departments and provincial entities.
At local government level, we will strengthen the capacity of municipal internal audit units, asset management units and audit committees. We believe that these measures will ensure that we achieve clean audits and improve service delivery to our people.
As we’ve said before in this House, payment of suppliers within stipulated timeframes, which is 30 days from the date of receiving the invoice, is a must. This enables in particular small businesses – the engine of economic growth and employment all over the world – to have positive cash flows.
Therefore as we said when we presented the provincial budget, we are working tirelessly on improving the provincial performance on the payment of suppliers within 30 days. We are fully aware that this requires tightening the administrative loopholes throughout the whole value chain of procurement and interventions have been put in place to ensure that this happens.
Furthermore, conditional grants, infrastructure funds and transfers to municipalities and non-governmental organisations will continue to be ring-fenced to ensure that they are used properly and suppliers are paid on time.
As we said last year, improving supply chain management processes in the province is one of the most important areas that the department is focusing on, not only in this financial year, but over the medium term period. Our key focus areas in 2013/2014 include monitoring implementation of policies, rules and regulations, and ensuring that there is compliance with procurement plans.
We will continue to focus on the reporting system across all departments to assess preferential procurement policy outcomes. We will review the process of resolving Supply Chain Management (SCM) related complaints to ensure procurement practices in the province are fair and equitable.
These interventions will assist in reducing deviations from normal procurement processes, and thus avoid irregular and unauthorised expenditure.
Madam Speaker, one of the key priorities of this political term of office is the fight against fraud and corruption. As Treasury, we are playing a strategic role towards the achievement of this outcome. We share this responsibility with Office of the Premier and the Gauteng Department of Finance. We therefore call on all our departments and municipalities to act decisively on issues of fraud and corruption, and urge staff members to blow the whistle on any corrupt activity.
Treasury will use this financial year to complete the process of verifying all employees of the provincial government to ensure that salaries are paid to people appointed in line with the approved organisational structures. We launched this project, which is called the Identity Verification Solution, in the Gauteng Department of Health at the beginning of March, and we intend rolling it out to other departments over the coming months to ensure that we complete it before end of this financial year.
This project will enable us to maintain the accuracy of the payroll system, match bank account details with authentic officials and eliminate overpayment of salaries to employees who have terminated their services.
In partnership with the State Security Agency, we are continuing with the practice of vetting all SCM officials in the province. This forms part of our efforts to root out fraud and corruption, which manifest itself primarily in procurement processes. The interventions we have mentioned above are in line with the Gauteng Anti-Corruption Strategic Framework which identifies fighting corruption as one of the key priorities of this political term of office.
Madam Speaker; in a tight fiscal environment difficult decisions are always required to ensure that scarce resources are directed towards financing priorities and more effective service delivery, while ensuring that debt levels are sustainable.
Treasury is committed to ensuring financial stability of the province, while facilitating service delivery. Therefore we place greater emphasis on improving the credibility of the processes and data which informs the in-year monitoring system and quarterly performance reports used to guide decision making. This will improve national and provincial policy making decisions, planning and resource allocation.
We will intensify the monitoring of conditional grant expenditure and outcomes in line with the grant frameworks as set out in the Division of Revenue Act. We will interact regularly with grant managers to ensure adherence to grant frameworks, attainment of intended outcomes, and value for money and the impact to public service delivery.
Madam Speaker, we will continue with our regulatory and monitoring function on public private partnerships in the province. Our focus in this financial year will be on diversifying the project portfolio and exploring other sectors such as water, housing and transport. Our view is that PPPs could play an important role in overcoming service delivery and infrastructure challenges in these sectors and we need to showcase their value add in this regard.
Furthermore, we will intensify stakeholder engagement in particular in the local government sector. Our focus will be on encouraging municipalities to explore PPPs as an alternative approach to address the delivery of public services to our communities.
Conclusion
In conclusion, Madam Speaker, let me say the work that Treasury does is depended on stakeholders who are located in all spheres of government, and the private sector. Let me express my sincere gratitude to all of them for their on-going cooperation and active participation in our engagements.
I take this opportunity also to thank the Premier for her guidance and input in the work of Treasury. I thank the Finance Portfolio Committee and the Standing Committee on Public Accounts for the robust engagements that we’ve always had during the oversight processes. These engagements have, indeed, improved the way we do our work.
Lastly I thank the HOD Nomfundo Tshabalala, the management and staff of Treasury for their dedication to the work that they do.
I present Budget Vote 14 – the Gauteng Provincial Treasury to the House.
Thank you!
