Date: 22/11/2005
Source: Gauteng Provincial Government
Title:Mashatile: Tabling of Medium Term Budget Policy Statement
Speech by Gauteng MEC for Finance and Economic Affairs, Paul Mashatile, at the tabling of the Medium Term Budget Policy Statement, the Provincial Adjustment Appropriation Bill and the Unauthorised Expenditure Bill, Gauteng Legislature
Comrade Speaker;
Honourable Premier, Mbhazima Shilowa
Honourable Members of the Executive Council;
Honourable members of the House;
Ladies and gentlemen:
Today, the tabling of the Medium Term Budget Policy Statement (MTBPS) for the Gauteng Provincial Government (GPG) before this House, signals yet another momentous milestone in our forward march to consolidate and entrench our hard won democracy. It is the first time since 1994 that GPG tables a Medium Term Budget Policy Statement, which outlines our strategic priorities and the total revenue that we will use to fund these priorities over the next three financial years. In addition to the Medium Term Budget Policy Statement, we are also tabling the Adjustment Appropriation Bill and the Unauthorised Expenditure Bill.
We are tabling the Statement and Bills in an environment characterised by all round optimism about our ability to deliver on our goals and priorities for this term of governance.
Economic outlook
Comrade Speaker, many years of careful planning have yielded a positive economic environment in our country and Province. The South African business cycle has been on an upward phase for 74 months since September 1999, making it the longest economic upswing in the recorded history of our country.
Real Gross Domestic Product (GDP) has been through 23 quarters of uninterrupted growth, further pointing to the strength of our national economy. The supply side of our economy is expanding, reflecting broad based expansion in most economic sectors. The provincial economy continues to show steady growth, well above national average. Indicators show a rise in fixed investments in the Province. In the first six months of 2005, Gauteng experienced an increase of 10.1% in the number of building plans approved compared to the same period last year. This constitutes 38.5% of total building plans approved in South Africa.
In April 2004, when the overwhelming majority of Gauteng's citizens once again expressed their faith in us and mandated us to continue creating a better life for all, GPG set for itself the following five strategic priorities:
* Enabling faster economic growth and job creation
* Fighting poverty and building safe, secure and sustainable communities
* Developing healthy, skilled and productive people
* Deepening democracy and nation building and realising the constitutional rights of our people
* Building an effective and caring government * Service Delivery.
In only two years of our five year term, we have enabled faster economic growth and job creation. This we have done through initiatives such as the launch of the Provincial Growth and Development Strategy (GDS) that outlines the mechanisms and strategic levers that we will fund to achieve our target of 8% economic growth by 2014.
We invested about R2 billion in a number of Blue IQ development projects such as the Automotive Supplier Park, New Town Precinct, Kliptown, Blue Catalyst and launched the Gauteng Enterprise Propeller (GEP) to provide financial and business development support to small, medium and micro-enterprises (SMMEs) and co-operatives. Through Gauteng Economic Development Agency (GEDA), we facilitated a total of R1.67 billion in new investments, of which 53% was destined for broad based black economic empowerment (BBBEE) companies. We also adopted a strategy for promoting Gauteng as a preferred destination for competitive sport and the Gauteng Provincial Creative Industries Development Framework. We have begun the process of provincial co-ordination in respect of the 2010 Soccer World Cup.
Since the launch of the GDS in April this year, we have started the process of revising the province's Spatial Planning framework in line with the GDS. In terms of revenue generated from tourism, we increased the number of visitors and tourists into Gauteng, particularly through Dinokeng and the Cradle of Humankind. Our commitment to bridging the gap between the First and Second Economies and facilitating increased participation of people from the Second Economy into mainstream social and economic activities is also reflected by the adoption a Strategic Agenda for Transport in Gauteng.
The agenda is aimed at fulfilling our objectives of providing an inter-modal, affordable, accessible, safe, reliable and sustainable public transport system. At the Intergovernmental Infrastructure Summit held in May 2005, the GPG and local government committed themselves to collectively invest about R50 billion over the next five years for infrastructure development across the Province. We have also allocated about R20 million for the implementation of a Road Safety Plan, completed over 47 000 serviced stands towards formalising informal settlements and have conducted an audit of social and economic facilities in 20 targeted townships.
We adopted a social development strategy and initiated Bana Pele. Collectively these initiatives directly contribute to our priority of fighting poverty and building sustainable communities. In directing more resources towards primary healthcare to ensure increased access by communities to health services, providing school feeding to over 356 000 learners and free scholar transport to over 51 000 learners we are developing healthy, skilled and productive people. Our pledge to deepen democracy and nation building and realising the constitutional rights of our people can be seen in our regular Izimbizo and the appointment of Community Development Workers (CDWs). We have also, in the past two years, made significant progress with regard to the implementation of the government portal as part of our commitment to building an effective and caring government.
Comrade Speaker, what I have just described is not ANC propaganda. It is a true reflection of what the ruling party in government, based on the ANC's election manifesto, has delivered to the people of Gauteng. The fact that the Province's unemployment rate declined from 30.8% in March 2003 to 22.7% in March this year is evidence enough. Government, through investment in infrastructure and other initiatives, has been a noteworthy contributor to job creation in the past two years. For example in the 2004/5 financial year, GEDA contributed to the creation of more than 4 000 sustainable jobs and the Gauteng Department of Public Transport, Roads and Works created over 2000 jobs.
I also take this opportunity, in highlighting our achievements, to thank local government for their contribution, through the mechanisms of intergovernmental relations and co-operative governance to our current achievements.
Medium Term Budget Policy Statement
Comrade Speaker and Members of the House, our Medium Term Budget Policy Statement serves to highlight our achievements and challenges so that at the end of this term of governance in 2009, we can hold our heads up high knowing that we have effected our political mandate. Although GPG's budgeting and planning has improved over the years, we still need to ensure that departments and agencies implement programmes and spend allocated resources timeously and effectively. We have to improve service delivery at a provincial and local government level, increase investments in social and economic infrastructure and integrate second economy initiatives into the mainstream of the economy.
We must continue our approach to government budgeting that links resource allocation and utilisation to a programme of action based on policy choices emanating from political commitments that are drawn from the electoral mandate. Our mainstreaming of gender, youth, children, people with disabilities, environmental sustainability and HIV/AIDS has to be increased. There is also still a need to increase financial management capacity in GPG, and co-operation between all spheres of government.
Whilst Gauteng remains the major contributor to South Africa's GDP it continues to face serious challenges, including rapid in-migration from other provinces, other countries within Southern African Development Community (SADC) and sub-Saharan countries. This influx brings with it a number of migrants without the skills required by our economy, making the majority of them unemployable and homeless. Rapid urbanisation, especially in our major cities, has put immense pressure on our already strained infrastructure and basic services.
Continued better planning in line with the objectives of the Growth and Development Strategy (GDS) is essential to addressing these challenges. Our vision to make Gauteng a globally competitive City Region will ensure that there is better co-ordination with local government and efficient planning and deployment of resources.
Medium Term Revenue and Expenditure
GPG's projected revenue over the Medium Term Expenditure Framework (MTEF) period ending in 2009, is expected to rise to R37.5 billion in 2006/7, R41.4 billion in 2007/8 and to R45.6 billion in 2008/9. This represents an average increase of 11% over the three years. In allocating this funding, we will continue to focus on education, health and social development and ensure adequate resources for continued delivery in these areas. More than R17 billion will be allocated to capital expenditure, with R1.3 billion available to fund GDS commitments.
The social grant administration function which is to be shifted from provinces to the national government, with the establishment of the South African Social Security Agency, will have an impact on the composition of provincial allocations. Our revenue strategy over the MTEF period aims to achieve an annual growth rate on provincial revenue of 10%. The strategy focuses on optimisation and maximisation of own revenue streams, broadening the tax base and researching the feasibility of other revenue sources for the Province. We will also ensure efficient collection of motor vehicle license and patient fees.
Key Priorities during the MTEF
Honourable Members and the citizens of Gauteng, some of the specific activities that we will utilise our MTEF financial resources are:
* Implementation of the National Curriculum Statement, no-fee schools, addressing the backlog in school equipment, increasing participation in Mathematics, Science and Technology especially for girl learners and improving matric examination performance
* Emergency medical services, modernisation of tertiary services, revitalisation of health infrastructure, reducing waiting times in hospitals and clinics by employing more nurses and implementing a comprehensive retention strategy
* We will continue to roll out sites that provide anti-retroviral treatment to HIV/AIDS patients, and continue with our HIV/AIDS prevention programme
* Integrated transport system, public safety on our roads and construction and maintenance of the provincial road network
* Fast track the implementation of Expanded Public Works Programme in a manner that assures labour maximisation
* Implementation of the social development strategy, early childhood development and progressive extension of improved protection and care to older persons and children in conflict with the law
* Formalisation of informal settlements and ensuring mixed income communities on well located land
* Provision of a Public Safety and Urban Information System
* Making Gauteng the home of competitive sport and hosting of events
* Roll out of GPG e-governance plan
* Implementation of the Agriculture Strategy with focus on agro-processing and biotechnology * Additional investment in Blue IQ projects and Local Economic Development (LED) initiatives
* Support for SMMEs, including co-operatives
* Investment and Export Development
Facilitation, tourism and making Gauteng a preferred destination for film production
* Funding for the new Treasury Department and capacity building in respect of budgeting and financial management
* Employing the full component of CDWs
* Continue with ensuring alignment of Integrated Development Plans, integrated transport plans
LED initiatives and capacity building initiatives * Upgrading of amenities in 20 identified priority townships.
Comrade Speaker, the increased allocation we are setting aside for capital expenditure underscores our commitment to accelerating growth, creating jobs and reducing poverty. Over the next three years, funding will be directed towards projects that are catalytic to increased economic growth so that we can address many of the socio-economic challenges facing us.
In January 2006, we will begin construction and implementation of Gautrain Rapid Rail Link. Our plans to complete construction in 54 months remain in place. The Minister of Finance indicated in his Medium Term Budget Policy Statement last month, that about R20 billion will be made available by both national and provincial government for successful implementation of this project. This massive investment in our economy and as explained in the GDS will indeed create a significant number of jobs during and post-construction. It will furthermore provide numerous opportunities for secondary, allied retail, commercial and new housing developments along the rail corridor.
Furthermore, the Department of Transport in Gauteng is currently working with the national Department of Transport to ensure that Gautrain is integrated into the Province's inter-modal public transport system. This will bring about changes in land use patterns in the province. With the implementation of this project Gauteng will never be same.
Provincial Adjustment Appropriation Bill for 2005
Honourable Speaker, having outlined our commitments over the MTEF, I will now present the Provincial Adjustment Appropriation Bill for 2005. The Bill we are tabling today will revise the Appropriation Act for 2005 that was approved by the House earlier this year. At the beginning of this financial year in March, we tabled a budget with estimated revenue of R33.5 billion and expenditure of R33.4 billion. The adjusted budget we are tabling today provides for an upward revision of revenue to R34.3 billion. Expenditure is also revised upwards by R975.5 million taking it to R34.3 billion. The revised revenue envelope takes into account additional funding from national government amounting to R106 million in conditional grants and R754 million allocated from the provincial surplus which includes rollovers from the previous financial year. The bulk of the resources will be used to fund rollovers and spending pressures in departments, including unforeseen and unavoidable expenditure.
Additional funding has been prioritised for the departments of Education, Health, Social Development and departments responsible for capital projects. The conditional grant will be used to fund the school nutrition programme, fast tracking of the hospital revitalisation projects and to cater for the new function of forensic pathology by the Department of Health. I will now indicate the allocations to various departments.
Department of Health
The Department of Health will receive an additional allocation of R583 million, raising its budget from R9.2 billion to R9.8 billion for the current financial year. These resources will ensure that we improve identified infrastructure needs, including the provision of new equipment for the new Pretoria Academic Hospital so that it can be fully operational.
Resources will also be used to address backlogs in the maintenance and rehabilitation of health facilities in our communities. Provision of more secure and efficient ways of delivering medicines to patients will also receive greater attention this year. This will ensure that the province complies with the requirements of the new Pharmacy Control Act which places more stringent controls for the pre-packing of pharmaceuticals.
Comrade Speaker, we remain committed to ensuring that the majority of our people are able to access health care services in our Province. Department of Education
The Department of Education will receive an additional allocation of R447 million increasing its budget from R10.3 billion to R10.8 billion in the current financial year. These resources will be used to augment the National School Nutrition Programme Grant, fund backlog payments in terms of Educator's salaries, fund the HIV/AIDS Peer Counselling Training Programme and for other HIV/AIDS interventions such as voluntary counselling and testing programmes.
The increased number of learners we are experiencing in our province has to be supported by an increase in employment of educators. It is for this reason that part of the additional funds we are allocating to the Department of Education will go towards the funding of new posts and the implementation of policy imperatives by the Department. The scholar transport subsidy will also be increased. Honourable Members, we remain committed to providing quality education for all in our Province.
Department of Social Development
The Department of Social Development receives an additional amount of R122 million increasing its budget from R7.5 billion to 7.6 billion in the current financial year. Part of this allocation will be used to fund non-governmental organisations (NGOs) providing welfare services on behalf of the Department. An amount of R17,4 million will be used for upgrading and rehabilitation of the Walter Sisulu place of Safety.
Department of Housing
The Department of Housing receives an additional allocation of R116 million, raising its budget from R1.6 billion to R1.7 billion in the current financial year. Part of these resources will fund roll over commitments in respect of installation of top structures as part of the Essential Services Programme and the transformation and redevelopment of the Buyafuthi Hostel in the Ekurhuleni Metropolitan Municipality.
Ongoing projects in the Alexandra Renewal Project will also receive additional resources, as will the placement of households on developed land as part of the Human Settlement Programme.
An amount of R332 000 will be used to support the Department to meet its operational requirements. And an amount of R75 million has been made available for the completion of the Kliptown Housing Project.
Department of Public Transport, Roads and Works
The total budget for this Department increases from R1.4 billion to R1.5 billion in the current financial year, due to rollovers approved for various new infrastructure projects of the Departments of Agriculture and Social Development that are being implemented by the Department of Public Transport, Roads and Works.
Department of Finance and Economic Affairs
The budget of this Department declines from R1.6 billion to R1.2 billion in the current financial year. A rollover to the value of R61.9 million has been approved. This includes funding allocated to the Gauteng Enterprise Propeller in the 2004/05 financial year but which will only be used in the 2005/06 financial year because GEP was only launched in April 2005. Blue IQ will receive additional resources to fund spending pressures on the Kliptown project. And the Gauteng Film Office will also receive additional funds to address spending pressures. From its GDS allocations the Department will provide R50 million to GEP, R45 million to the Department of Sports, Recreation, Arts and Culture for making Gauteng the home of competitive sport and for the 2010 Soccer World Cup preparations, R15 million to fund various local economic development initiatives, R1 million for the Gauteng Provincial Advanced Manufacturing Technology Programme and R21.1 million for the GPG contact centre located at the GSSC.
The Department of Finance and Economic Affairs has also surrendered back to the provincial revenue fund R300 million of a total of R900 million, in respect of the Gautrain project. This was done in order to fund spending pressures from the social sector departments. The remaining amount of R600 million is available this year for the funding of Gautrain.
The Dinokeng project also surrendered an amount R58 million from their 2005/06 budget based on their spending projections for the year. The delay in spending was a result of land claims in the area that needed to be resolved by the Department of Land Affairs before the Dinokeng Game Reserve project can commence. This amount will be allocated back to the project in 2006/07.
The Gauteng Shared Services Centre (GSSC)
The GSSC receives and additional R54 million for the current financial year. An amount of R3.3 million has been rolled over to fund the E-Learning Project and R21.5 million was rolled over for Disaster Recovery Plan Project. Resources will also be made available to fund the Call Centre Project. The total Budget for the GSSC increases from R585 million to R640 million.
Department of Local Government
A roll over to the amount of R5.3 million was approved for this Department. The Department will also receive an additional amount of R21 million increasing its total Budget from R107.3 million to R129 million in the current financial year.
Office of the Premier
The budget for the Office of the Premier remains unchanged. The department has received an additional allocation of R3.3 million to fund Izimbizo and the Africa Peer Review Mechanism. However, the department's budget has been reduced by about R3.4 million towards the trading account of the GPG precinct.
The Provincial Legislature
We have approved a rollover to the amount of R1 million for the Provincial Legislature to cater for the conclusion of capital projects, including the improvement of the accessibility of the Legislature for people with disabilities. The Legislature budget increases from R113 million to R114 million for the current financial year.
Department of Agriculture, Conservation and Environment
For this Department we have approved rollovers to the amount of R4 million to fund various projects of the Department such its land care programme. The Department is suspending R5 million to Department of Public Transport, Roads and Works for the completion of the Protea Camp project and the maintenance of natural reserves. The Department is further suspending R770 000 for the Bontle Ke Botho prize money to the Department of Education. The total Budget for this Department declines from R229 million to R223 million.
Department of Community Safety
The Budget for the Department of Community Safety is adjusted from R182 million to R181 million. This is due to a change in operational responsibilities in respect of rent from individual departments to a provincial trading account.
Department of Sports, Recreation, Arts and Culture
This Department receives R48 million additional funds for this financial year, increasing its budget from R148 million to R196 million. The additional allocations cater for projects to make Gauteng the home of competitive sport and preparations for the 2010 Soccer World Cup.
Unauthorised Expenditure Bill
Comrade Speaker and Honourable Members, as indicated earlier, we are also tabling the Unauthorised Expenditure Bill of R895 million for approval by this House. The Bill will cater for financial year 2003/04. The key reasons that gave rise to unauthorized expenditure are inadequate budget allocations, weaknesses in management control and inadequate systems and non-utilisation of virements between programmes.
Honourable Speaker and Members of this Legislature, the adjustments we have made in our Budget and the projections we reflect in our Medium Term Budget Policy Statement will take us one step further in delivering on our goals and priorities. The discussions and debates on the Adjustment Bill and the MTBPS, at Exco level under the leadership of the Premier, were vigorous and guided entirely by the political and electoral mandate given to us by the citizens of our province.
To the citizens of Gauteng, we wish to say that the Adjustment Bill for this financial year will address the spending pressures experienced by our departments in achieving their annual targets. The MTBPS we are tabling indicates that GPG is delivering on its five strategic priorities for this term of governance, ending 2009.
To our officials in all departments, we say, it is our collective responsibility to ensure that we timeously and effectively expend our budgets throughout the year, so that we can achieve our goals and targets. We therefore urge all departments to ensure that under expenditure becomes a thing of the past. Both the MTPBS and the Adjustment Bill will take us much closer to achievement of our 2014 GDS targets of 8% economic growth, 50% reduction in our unemployment rate, creating 800 000 sustainable jobs, providing skills development and capacity building to 100 000 people, providing support to 30 000 SMMEs and ensuring that 80% of government's procurement spend goes to BBBEE companies.
In conclusion, I thank the Premier and my colleagues in Exco for their political support and insights. I also thank HODs and administrative staff from my and other departments for their technical support and advice in developing the Adjustment Bill and Medium Term Policy Budget Statement. I now table the following documents for consideration by this House:
* The Provincial Medium Term Budget Policy Statement for 2005;
* The Provincial Adjustment Appropriation Bill for 2005;
* The Explanatory Memorandum to the Bill;
* The estimates of revenue and expenditure;
* The Unauthorised Expenditure Bill
* The explanatory Memorandum to the Bill and * A copy of my speech.
Ke ya Leboga.
Issued by: Office of the Premier, Gauteng Provincial Government
22 November 2005
Source: Gauteng Provincial Government
Title:Mashatile: Tabling of Medium Term Budget Policy Statement
Speech by Gauteng MEC for Finance and Economic Affairs, Paul Mashatile, at the tabling of the Medium Term Budget Policy Statement, the Provincial Adjustment Appropriation Bill and the Unauthorised Expenditure Bill, Gauteng Legislature
Comrade Speaker;
Honourable Premier, Mbhazima Shilowa
Honourable Members of the Executive Council;
Honourable members of the House;
Ladies and gentlemen:
Today, the tabling of the Medium Term Budget Policy Statement (MTBPS) for the Gauteng Provincial Government (GPG) before this House, signals yet another momentous milestone in our forward march to consolidate and entrench our hard won democracy. It is the first time since 1994 that GPG tables a Medium Term Budget Policy Statement, which outlines our strategic priorities and the total revenue that we will use to fund these priorities over the next three financial years. In addition to the Medium Term Budget Policy Statement, we are also tabling the Adjustment Appropriation Bill and the Unauthorised Expenditure Bill.
We are tabling the Statement and Bills in an environment characterised by all round optimism about our ability to deliver on our goals and priorities for this term of governance.
Economic outlook
Comrade Speaker, many years of careful planning have yielded a positive economic environment in our country and Province. The South African business cycle has been on an upward phase for 74 months since September 1999, making it the longest economic upswing in the recorded history of our country.
Real Gross Domestic Product (GDP) has been through 23 quarters of uninterrupted growth, further pointing to the strength of our national economy. The supply side of our economy is expanding, reflecting broad based expansion in most economic sectors. The provincial economy continues to show steady growth, well above national average. Indicators show a rise in fixed investments in the Province. In the first six months of 2005, Gauteng experienced an increase of 10.1% in the number of building plans approved compared to the same period last year. This constitutes 38.5% of total building plans approved in South Africa.
In April 2004, when the overwhelming majority of Gauteng's citizens once again expressed their faith in us and mandated us to continue creating a better life for all, GPG set for itself the following five strategic priorities:
* Enabling faster economic growth and job creation
* Fighting poverty and building safe, secure and sustainable communities
* Developing healthy, skilled and productive people
* Deepening democracy and nation building and realising the constitutional rights of our people
* Building an effective and caring government * Service Delivery.
In only two years of our five year term, we have enabled faster economic growth and job creation. This we have done through initiatives such as the launch of the Provincial Growth and Development Strategy (GDS) that outlines the mechanisms and strategic levers that we will fund to achieve our target of 8% economic growth by 2014.
We invested about R2 billion in a number of Blue IQ development projects such as the Automotive Supplier Park, New Town Precinct, Kliptown, Blue Catalyst and launched the Gauteng Enterprise Propeller (GEP) to provide financial and business development support to small, medium and micro-enterprises (SMMEs) and co-operatives. Through Gauteng Economic Development Agency (GEDA), we facilitated a total of R1.67 billion in new investments, of which 53% was destined for broad based black economic empowerment (BBBEE) companies. We also adopted a strategy for promoting Gauteng as a preferred destination for competitive sport and the Gauteng Provincial Creative Industries Development Framework. We have begun the process of provincial co-ordination in respect of the 2010 Soccer World Cup.
Since the launch of the GDS in April this year, we have started the process of revising the province's Spatial Planning framework in line with the GDS. In terms of revenue generated from tourism, we increased the number of visitors and tourists into Gauteng, particularly through Dinokeng and the Cradle of Humankind. Our commitment to bridging the gap between the First and Second Economies and facilitating increased participation of people from the Second Economy into mainstream social and economic activities is also reflected by the adoption a Strategic Agenda for Transport in Gauteng.
The agenda is aimed at fulfilling our objectives of providing an inter-modal, affordable, accessible, safe, reliable and sustainable public transport system. At the Intergovernmental Infrastructure Summit held in May 2005, the GPG and local government committed themselves to collectively invest about R50 billion over the next five years for infrastructure development across the Province. We have also allocated about R20 million for the implementation of a Road Safety Plan, completed over 47 000 serviced stands towards formalising informal settlements and have conducted an audit of social and economic facilities in 20 targeted townships.
We adopted a social development strategy and initiated Bana Pele. Collectively these initiatives directly contribute to our priority of fighting poverty and building sustainable communities. In directing more resources towards primary healthcare to ensure increased access by communities to health services, providing school feeding to over 356 000 learners and free scholar transport to over 51 000 learners we are developing healthy, skilled and productive people. Our pledge to deepen democracy and nation building and realising the constitutional rights of our people can be seen in our regular Izimbizo and the appointment of Community Development Workers (CDWs). We have also, in the past two years, made significant progress with regard to the implementation of the government portal as part of our commitment to building an effective and caring government.
Comrade Speaker, what I have just described is not ANC propaganda. It is a true reflection of what the ruling party in government, based on the ANC's election manifesto, has delivered to the people of Gauteng. The fact that the Province's unemployment rate declined from 30.8% in March 2003 to 22.7% in March this year is evidence enough. Government, through investment in infrastructure and other initiatives, has been a noteworthy contributor to job creation in the past two years. For example in the 2004/5 financial year, GEDA contributed to the creation of more than 4 000 sustainable jobs and the Gauteng Department of Public Transport, Roads and Works created over 2000 jobs.
I also take this opportunity, in highlighting our achievements, to thank local government for their contribution, through the mechanisms of intergovernmental relations and co-operative governance to our current achievements.
Medium Term Budget Policy Statement
Comrade Speaker and Members of the House, our Medium Term Budget Policy Statement serves to highlight our achievements and challenges so that at the end of this term of governance in 2009, we can hold our heads up high knowing that we have effected our political mandate. Although GPG's budgeting and planning has improved over the years, we still need to ensure that departments and agencies implement programmes and spend allocated resources timeously and effectively. We have to improve service delivery at a provincial and local government level, increase investments in social and economic infrastructure and integrate second economy initiatives into the mainstream of the economy.
We must continue our approach to government budgeting that links resource allocation and utilisation to a programme of action based on policy choices emanating from political commitments that are drawn from the electoral mandate. Our mainstreaming of gender, youth, children, people with disabilities, environmental sustainability and HIV/AIDS has to be increased. There is also still a need to increase financial management capacity in GPG, and co-operation between all spheres of government.
Whilst Gauteng remains the major contributor to South Africa's GDP it continues to face serious challenges, including rapid in-migration from other provinces, other countries within Southern African Development Community (SADC) and sub-Saharan countries. This influx brings with it a number of migrants without the skills required by our economy, making the majority of them unemployable and homeless. Rapid urbanisation, especially in our major cities, has put immense pressure on our already strained infrastructure and basic services.
Continued better planning in line with the objectives of the Growth and Development Strategy (GDS) is essential to addressing these challenges. Our vision to make Gauteng a globally competitive City Region will ensure that there is better co-ordination with local government and efficient planning and deployment of resources.
Medium Term Revenue and Expenditure
GPG's projected revenue over the Medium Term Expenditure Framework (MTEF) period ending in 2009, is expected to rise to R37.5 billion in 2006/7, R41.4 billion in 2007/8 and to R45.6 billion in 2008/9. This represents an average increase of 11% over the three years. In allocating this funding, we will continue to focus on education, health and social development and ensure adequate resources for continued delivery in these areas. More than R17 billion will be allocated to capital expenditure, with R1.3 billion available to fund GDS commitments.
The social grant administration function which is to be shifted from provinces to the national government, with the establishment of the South African Social Security Agency, will have an impact on the composition of provincial allocations. Our revenue strategy over the MTEF period aims to achieve an annual growth rate on provincial revenue of 10%. The strategy focuses on optimisation and maximisation of own revenue streams, broadening the tax base and researching the feasibility of other revenue sources for the Province. We will also ensure efficient collection of motor vehicle license and patient fees.
Key Priorities during the MTEF
Honourable Members and the citizens of Gauteng, some of the specific activities that we will utilise our MTEF financial resources are:
* Implementation of the National Curriculum Statement, no-fee schools, addressing the backlog in school equipment, increasing participation in Mathematics, Science and Technology especially for girl learners and improving matric examination performance
* Emergency medical services, modernisation of tertiary services, revitalisation of health infrastructure, reducing waiting times in hospitals and clinics by employing more nurses and implementing a comprehensive retention strategy
* We will continue to roll out sites that provide anti-retroviral treatment to HIV/AIDS patients, and continue with our HIV/AIDS prevention programme
* Integrated transport system, public safety on our roads and construction and maintenance of the provincial road network
* Fast track the implementation of Expanded Public Works Programme in a manner that assures labour maximisation
* Implementation of the social development strategy, early childhood development and progressive extension of improved protection and care to older persons and children in conflict with the law
* Formalisation of informal settlements and ensuring mixed income communities on well located land
* Provision of a Public Safety and Urban Information System
* Making Gauteng the home of competitive sport and hosting of events
* Roll out of GPG e-governance plan
* Implementation of the Agriculture Strategy with focus on agro-processing and biotechnology * Additional investment in Blue IQ projects and Local Economic Development (LED) initiatives
* Support for SMMEs, including co-operatives
* Investment and Export Development
Facilitation, tourism and making Gauteng a preferred destination for film production
* Funding for the new Treasury Department and capacity building in respect of budgeting and financial management
* Employing the full component of CDWs
* Continue with ensuring alignment of Integrated Development Plans, integrated transport plans
LED initiatives and capacity building initiatives * Upgrading of amenities in 20 identified priority townships.
Comrade Speaker, the increased allocation we are setting aside for capital expenditure underscores our commitment to accelerating growth, creating jobs and reducing poverty. Over the next three years, funding will be directed towards projects that are catalytic to increased economic growth so that we can address many of the socio-economic challenges facing us.
In January 2006, we will begin construction and implementation of Gautrain Rapid Rail Link. Our plans to complete construction in 54 months remain in place. The Minister of Finance indicated in his Medium Term Budget Policy Statement last month, that about R20 billion will be made available by both national and provincial government for successful implementation of this project. This massive investment in our economy and as explained in the GDS will indeed create a significant number of jobs during and post-construction. It will furthermore provide numerous opportunities for secondary, allied retail, commercial and new housing developments along the rail corridor.
Furthermore, the Department of Transport in Gauteng is currently working with the national Department of Transport to ensure that Gautrain is integrated into the Province's inter-modal public transport system. This will bring about changes in land use patterns in the province. With the implementation of this project Gauteng will never be same.
Provincial Adjustment Appropriation Bill for 2005
Honourable Speaker, having outlined our commitments over the MTEF, I will now present the Provincial Adjustment Appropriation Bill for 2005. The Bill we are tabling today will revise the Appropriation Act for 2005 that was approved by the House earlier this year. At the beginning of this financial year in March, we tabled a budget with estimated revenue of R33.5 billion and expenditure of R33.4 billion. The adjusted budget we are tabling today provides for an upward revision of revenue to R34.3 billion. Expenditure is also revised upwards by R975.5 million taking it to R34.3 billion. The revised revenue envelope takes into account additional funding from national government amounting to R106 million in conditional grants and R754 million allocated from the provincial surplus which includes rollovers from the previous financial year. The bulk of the resources will be used to fund rollovers and spending pressures in departments, including unforeseen and unavoidable expenditure.
Additional funding has been prioritised for the departments of Education, Health, Social Development and departments responsible for capital projects. The conditional grant will be used to fund the school nutrition programme, fast tracking of the hospital revitalisation projects and to cater for the new function of forensic pathology by the Department of Health. I will now indicate the allocations to various departments.
Department of Health
The Department of Health will receive an additional allocation of R583 million, raising its budget from R9.2 billion to R9.8 billion for the current financial year. These resources will ensure that we improve identified infrastructure needs, including the provision of new equipment for the new Pretoria Academic Hospital so that it can be fully operational.
Resources will also be used to address backlogs in the maintenance and rehabilitation of health facilities in our communities. Provision of more secure and efficient ways of delivering medicines to patients will also receive greater attention this year. This will ensure that the province complies with the requirements of the new Pharmacy Control Act which places more stringent controls for the pre-packing of pharmaceuticals.
Comrade Speaker, we remain committed to ensuring that the majority of our people are able to access health care services in our Province. Department of Education
The Department of Education will receive an additional allocation of R447 million increasing its budget from R10.3 billion to R10.8 billion in the current financial year. These resources will be used to augment the National School Nutrition Programme Grant, fund backlog payments in terms of Educator's salaries, fund the HIV/AIDS Peer Counselling Training Programme and for other HIV/AIDS interventions such as voluntary counselling and testing programmes.
The increased number of learners we are experiencing in our province has to be supported by an increase in employment of educators. It is for this reason that part of the additional funds we are allocating to the Department of Education will go towards the funding of new posts and the implementation of policy imperatives by the Department. The scholar transport subsidy will also be increased. Honourable Members, we remain committed to providing quality education for all in our Province.
Department of Social Development
The Department of Social Development receives an additional amount of R122 million increasing its budget from R7.5 billion to 7.6 billion in the current financial year. Part of this allocation will be used to fund non-governmental organisations (NGOs) providing welfare services on behalf of the Department. An amount of R17,4 million will be used for upgrading and rehabilitation of the Walter Sisulu place of Safety.
Department of Housing
The Department of Housing receives an additional allocation of R116 million, raising its budget from R1.6 billion to R1.7 billion in the current financial year. Part of these resources will fund roll over commitments in respect of installation of top structures as part of the Essential Services Programme and the transformation and redevelopment of the Buyafuthi Hostel in the Ekurhuleni Metropolitan Municipality.
Ongoing projects in the Alexandra Renewal Project will also receive additional resources, as will the placement of households on developed land as part of the Human Settlement Programme.
An amount of R332 000 will be used to support the Department to meet its operational requirements. And an amount of R75 million has been made available for the completion of the Kliptown Housing Project.
Department of Public Transport, Roads and Works
The total budget for this Department increases from R1.4 billion to R1.5 billion in the current financial year, due to rollovers approved for various new infrastructure projects of the Departments of Agriculture and Social Development that are being implemented by the Department of Public Transport, Roads and Works.
Department of Finance and Economic Affairs
The budget of this Department declines from R1.6 billion to R1.2 billion in the current financial year. A rollover to the value of R61.9 million has been approved. This includes funding allocated to the Gauteng Enterprise Propeller in the 2004/05 financial year but which will only be used in the 2005/06 financial year because GEP was only launched in April 2005. Blue IQ will receive additional resources to fund spending pressures on the Kliptown project. And the Gauteng Film Office will also receive additional funds to address spending pressures. From its GDS allocations the Department will provide R50 million to GEP, R45 million to the Department of Sports, Recreation, Arts and Culture for making Gauteng the home of competitive sport and for the 2010 Soccer World Cup preparations, R15 million to fund various local economic development initiatives, R1 million for the Gauteng Provincial Advanced Manufacturing Technology Programme and R21.1 million for the GPG contact centre located at the GSSC.
The Department of Finance and Economic Affairs has also surrendered back to the provincial revenue fund R300 million of a total of R900 million, in respect of the Gautrain project. This was done in order to fund spending pressures from the social sector departments. The remaining amount of R600 million is available this year for the funding of Gautrain.
The Dinokeng project also surrendered an amount R58 million from their 2005/06 budget based on their spending projections for the year. The delay in spending was a result of land claims in the area that needed to be resolved by the Department of Land Affairs before the Dinokeng Game Reserve project can commence. This amount will be allocated back to the project in 2006/07.
The Gauteng Shared Services Centre (GSSC)
The GSSC receives and additional R54 million for the current financial year. An amount of R3.3 million has been rolled over to fund the E-Learning Project and R21.5 million was rolled over for Disaster Recovery Plan Project. Resources will also be made available to fund the Call Centre Project. The total Budget for the GSSC increases from R585 million to R640 million.
Department of Local Government
A roll over to the amount of R5.3 million was approved for this Department. The Department will also receive an additional amount of R21 million increasing its total Budget from R107.3 million to R129 million in the current financial year.
Office of the Premier
The budget for the Office of the Premier remains unchanged. The department has received an additional allocation of R3.3 million to fund Izimbizo and the Africa Peer Review Mechanism. However, the department's budget has been reduced by about R3.4 million towards the trading account of the GPG precinct.
The Provincial Legislature
We have approved a rollover to the amount of R1 million for the Provincial Legislature to cater for the conclusion of capital projects, including the improvement of the accessibility of the Legislature for people with disabilities. The Legislature budget increases from R113 million to R114 million for the current financial year.
Department of Agriculture, Conservation and Environment
For this Department we have approved rollovers to the amount of R4 million to fund various projects of the Department such its land care programme. The Department is suspending R5 million to Department of Public Transport, Roads and Works for the completion of the Protea Camp project and the maintenance of natural reserves. The Department is further suspending R770 000 for the Bontle Ke Botho prize money to the Department of Education. The total Budget for this Department declines from R229 million to R223 million.
Department of Community Safety
The Budget for the Department of Community Safety is adjusted from R182 million to R181 million. This is due to a change in operational responsibilities in respect of rent from individual departments to a provincial trading account.
Department of Sports, Recreation, Arts and Culture
This Department receives R48 million additional funds for this financial year, increasing its budget from R148 million to R196 million. The additional allocations cater for projects to make Gauteng the home of competitive sport and preparations for the 2010 Soccer World Cup.
Unauthorised Expenditure Bill
Comrade Speaker and Honourable Members, as indicated earlier, we are also tabling the Unauthorised Expenditure Bill of R895 million for approval by this House. The Bill will cater for financial year 2003/04. The key reasons that gave rise to unauthorized expenditure are inadequate budget allocations, weaknesses in management control and inadequate systems and non-utilisation of virements between programmes.
Honourable Speaker and Members of this Legislature, the adjustments we have made in our Budget and the projections we reflect in our Medium Term Budget Policy Statement will take us one step further in delivering on our goals and priorities. The discussions and debates on the Adjustment Bill and the MTBPS, at Exco level under the leadership of the Premier, were vigorous and guided entirely by the political and electoral mandate given to us by the citizens of our province.
To the citizens of Gauteng, we wish to say that the Adjustment Bill for this financial year will address the spending pressures experienced by our departments in achieving their annual targets. The MTBPS we are tabling indicates that GPG is delivering on its five strategic priorities for this term of governance, ending 2009.
To our officials in all departments, we say, it is our collective responsibility to ensure that we timeously and effectively expend our budgets throughout the year, so that we can achieve our goals and targets. We therefore urge all departments to ensure that under expenditure becomes a thing of the past. Both the MTPBS and the Adjustment Bill will take us much closer to achievement of our 2014 GDS targets of 8% economic growth, 50% reduction in our unemployment rate, creating 800 000 sustainable jobs, providing skills development and capacity building to 100 000 people, providing support to 30 000 SMMEs and ensuring that 80% of government's procurement spend goes to BBBEE companies.
In conclusion, I thank the Premier and my colleagues in Exco for their political support and insights. I also thank HODs and administrative staff from my and other departments for their technical support and advice in developing the Adjustment Bill and Medium Term Policy Budget Statement. I now table the following documents for consideration by this House:
* The Provincial Medium Term Budget Policy Statement for 2005;
* The Provincial Adjustment Appropriation Bill for 2005;
* The Explanatory Memorandum to the Bill;
* The estimates of revenue and expenditure;
* The Unauthorised Expenditure Bill
* The explanatory Memorandum to the Bill and * A copy of my speech.
Ke ya Leboga.
Issued by: Office of the Premier, Gauteng Provincial Government
22 November 2005
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