Madam speaker
Premier of our province, honourable Chupu Mathabatha
Colleagues in the executive of our province
Honourable members of the legislature
Executive mayors, mayors and leaders of councils
Traditional leaders
Leaders and members of the business community
Distinguished Ladies and gentlemen
Senior public servants and members of the media.
A good afternoon to you all
The MTPBS was first tabled in this country in1997, during the Presidency of Comrade Mandela and I would like to remind the honourable house of its purpose:
It describes government goals and objectives
It explains the economic environment within which those objectives are being addressed and projects the total level of resources that will be available
It analyses the trade-offs and choices that the nation confronts in addressing Its reconstruction and development priorities
In keeping to our commitment to an open, transparent and cooperative policy-making, it invites the nation to share with government the important choices that must be made.
That was twenty years ago and our goals remain more of less the same, to promote social transformation and more inclusive economic growth and to achieve a much better life and opportunities for all South Africans.
As it was back then, it reminds me of the statement “as much as things change, they remain the same” the economic environment today is uncertain. One of the main goals of having this medium term budget policy statement is to ensure that as a country and a province we have a sustainable and resilient budget.
This will ensure that we leave future generations with a vibrant democracy, a peaceful society having achieved its developmental goals, debt-free and free of poverty and exploitation of one person by another.
Considering the environment we find ourselves in, we must set our priorities within the confines of our various policy documents the Limpopo development plan in particular being our lodestar. This budget process, Madam Speaker, reminds us of the many difficult challenges facing us as a province.
It is about how we improve access to housing, sanitation and clean water for our people, equal access to education, good health care, accelerate job creation and develop our SMME’s amongst others.
The 2016 MTPBS, ladies and gentlemen, continues to be informed by weak economic growth in the South African economy, with forecast for growth being further revised downwards since 2015 Medium Term Budget Policy Statement (MTBPS).
In addition a number of new priorities have arisen and Cabinet has taken a decision that these priorities should be catered for without breaching the expenditure ceiling and there have been changes to the provincial equitable share (PES) baselines. The baseline has been cut in order to channel funds to those pressing national priorities which require funding and cannot be postponed further to the coming financial years. Two rounds of cuts were approved by Cabinet.
The first round of cuts was effected through the PES formula and is targeted at inefficiencies in the system, especially non-core spending. In order to change the current position of staff, both at national and provincial levels, the second round cuts were applied to the compensation of employees (CoE) budgets.
The downward trend of equitable share was informed by the following factors:
- The recent downward revision of economic growth rate in 2015
- Debt service costs
- Funding of the Higher Education sector
- Contingency provision for drought relief.
The province was also adversely affected during 2015 MTEF by R1.087 billion due to Provincial Equitable Share formula resultant from changes to data updates and census. More stringent measures and a prudent approach has been put in place in order to ascertain that service delivery is not compromised. Provincial Treasury encouraged departments to exercise control on spending especially on non-core items. Read more [PDF]
