Modern, Growing, Successful Province

Occasion Of Tabling The Northern Cape Appropriation Bill 2010

05 MARCH 2010

On the 21st March our country and people will remember the over sixty people who were shot and killed by the police in Sharpeville by celebrating human rights. It is therefore befitting that at the time when the world is reeling from the impact of an economic recession which has threatened those living in poverty and pushed even more into abject poverty, we remember and reflect on the subject of human rights.

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We do this aware of the fact that human rights cannot be limited to civil and political rights but must include second generation rights.

Former President Nelson Mandela captured this most appropriately when he addressed the United Nations on the 50th Anniversary of the Universal Declaration of Human rights and said, I quote: “the very right to be human is denied everyday to hundreds of millions of people as a result of poverty, the unavailability of basic necessities such as food, jobs, water and shelter, education, health care and healthy environment”. Honourable Members, this bags the question, how does our allocation of resources address the issue of human rights in the current context of governance?

It is our considered view that government must play a central role using the budget as a tool to transform society by influencing the level of economic activity, creating job opportunities and protecting the poor and many more from being pushed into abject poverty. It is in this context that we refer to creating a developmental state with capacity to develop and implement progressive policies that will result in the realization of human rights as envisaged in the constitution of the republic.

The pursued of apartheid and discriminatory policies by the apartheid regime forced many of our people to take arms and fight for human rights. Many people present here today fought for human rights while thousands died in pursuit of human rights. At this point, honourable speaker, I must acknowledge the presence of ANC Veterans, members of the Upington 26 and widows of departed comrades. Their presence in this house reminds us that we have a historical and moral obligation to honour the living and those who passed away in the struggle against apartheid.

Indeed, human rights must find concrete expression in the budgets and economic policies of government. Accordingly, today we table the first budget of the administration of President Zuma. It represents our commitment to work together to improve quality and access to service delivery, pursue rapid economic growth and create employment opportunities, as well as deal with poverty and underdevelopment. The budget proposals we make represent our endeavour to look at different answers and solutions, to re-examine our plans, and set more deliberate, more focused course.

While the world and the country are still recovering from the aftermath of the recession, we must remember that for the average citizen of South Africa, and indeed, the Northern Cape, where too many people live below the breadline, recession is forever a reality. The emergence of the world from recession does not resolve the socio-economic divide and inequality that our people still experience. In the aftermath of the recession we remain one of the most unequal countries in the world. This is something that needs provincial consensus to deal with, at least in our midst.

Provincial budget remains one of the tools of redistribution that can mitigate the socio-economic divide and inequality experienced by our people. The work of a people-fearing politician in this period is to promote consensus around how best provincial resources can be employed to improve a lot of our people. This calls for politics of purpose; politics of consensus on pertinent provincial priorities.

Politics is nothing but the negotiation for and against the competing interests. None of us should have been here if we thought that our various political mandates were non-negotiable. Politics is a question of tradeoffs. None of us should have been here if we were not confident of our abilities to engage and convince each other of the correctness of our various mandates.

However forever politicking does necessarily deliver the services that our people so yearn for. Forever politicking will not push back the frontiers of poverty that our people so yearn for. We need provincial consensus that in the Northern Cape we will not stoop too low as to rubbish the art of politics in the eyes of the people. We are in politics to advance the socio-economic interests of the people as a whole – to build a better future for all! Yes, we require provincial consensus on this.

We require provincial consensus that what we need in the immediate future is the performance audits, not lifestyle audits, of our political office-bearers and senior government officials. We need to develop own capacity to monitor and evaluate our own performance. Our priorities must be clear. On this we need provincial consensus.

We require provincial consensus that we will bring into line and hold provincial departments accountable in terms of the delivery of their mandates and financial management, especially on questions of under- and over-expenditure.

Honourable Speaker, this year’s budget is an attempt to build this provincial consensus. It says for us to go ahead in improving service delivery to our people we must work together to realize its objectives. This budget requires provincial consensus to work together in the interest of the people – our real masters.

We need consensus on fairly tried, tested and timeless mandates of our people that:

  • The people shall govern!
  • All national groups shall have equal rights!
  • The people shall share in the country’s wealth!
  • The land shall be shared among those who work it!
  • All shall be equal before the law!
  • All shall have equal rights!
  • There shall be work and security!
  • The doors of learning and culture shall be opened!
  • There shall be houses, security and comfort!; and
  • There shall be peace and friendship!

This budget seeks to modestly and humbly advance these mandates of our people. The Freedom Charter is to the majority of South Africans what the Magna Carter is to the people of England. It is the mandate written indelibly on our collective consciousness as a people. For this we are sure there is a provincial consensus.

Economic Outlook
Following the longest period of unprecedented economic growth; South Africa`s economy, like most in the world, did not escape the claws of the recession. Subsequent to the sub-prime crisis in the United States of America (US) that led to a global recession, the national economy remained resilient for the most part of 2008 but gave in to weakening global economic activity in the last quarter of that year where it contracted by -0.7 percent at constant 2005 prices. The country entered into a recession in the first quarter of 2009 after the economy contracted by -7.4 percent and later by -2.8 percent in the second quarter. Production in the mining and manufacturing sectors fell significantly as global demand slowed and commodity prices plummeted.

Consequently, the domestic economy shed 959 000 jobs while provincially 61 000 jobs were lost in the first three quarters of 2009. This resulted in subdued demand which pushed down headline inflation to below 6 percent in October 2009, for the first time in 31 months.

However, on the eve of this budget proposal the global economy began to recover albeit in a slow and uneven pattern. The growth rates have been revised upwards while most indicators remain positive. The world output is projected to grow by 3.9 and 4.3 percent in 2010 and 2011 respectively while national economy is forecasted to grow by 2.3 and 3.2 percent during the same years. The most recent employment statistics show an increase of 89 000 nationally and 35 000 jobs provincially between September and December last year.
Manufacturing and the mining sectors, which were hit very hard by the recession at the end of 2008 and in the first half of 2009, posted better results in the third quarter of 2009. Manufacturing showed an improvement from -6.9 in third quarter of 2008 to 7.6 in the same quarter of 2009 while mining improved from -8 percent in quarter three of 2008 to 5.8 in quarter three of 2009.
Other positive signs include the increased car sales figures, which are increasing on a month-to-month basis; trade activity is positive and business confidence is improving. The business confidence index revealed an increase of five points to 28 from 23 in the fourth quarter of 2009, a significant increase since the third quarter of 2006.South Africa’s purchasing managers index (PMI) which is a measure of factory output, presented by Kagiso Securities, showed another indication of a positive economic outlook by rising above the 50 point mark, which signals an expansion.

NC Socio-economic Review 2010
Honourable Speaker, our proposed allocation of resources is informed by a thorough analysis of the social and economic material conditions in the province. It is for this reason that together with the budget proposals for the 2010/11 financial year we publish the second edition of the Northern Cape Socio-economic Review (NCSER). Although its significance lies in the contribution it makes in informing allocation of resources, the NCSER is also critical in guiding the formulation of interventions aimed at stimulating growth and development in the province.

The analysis and findings of this publication are also expected to assist government to achieve allocative efficiency. It is meant to result in a choice of public goods and services that can best improve the quality of life and advance sustainable growth and development in the province. Most importantly, the findings also serve as part of the monitoring and evaluation aimed at determining the impact that government programmes have on service delivery and development broadly in the province.

The specific findings are discussed extensively in the actual document, but it is worth noting reflecting on some of the key issues. Most importantly, the rebasing of the GDP by Statistics South Africa shows the provincial economy reached the minimum band of 4-6 percent target set out in the PGDS in 2006 and 2007. This is very important as previous data suggested that the PGDS target was never met.

In the immediate, our challenge is to find ways to change the structure of the provincial economy. Such a structural change must result in rapid economic growth and creation of decent jobs. In order for such growth to result in new job opportunities it is imperative that our focus be on sectors that are labour intensive in operation. On the social services side, although there is general improvement in provision, there is a need to improve the quality of these services, fight poverty and reduce income inequality. It is important that the public sector officials and all stakeholders reflect on the findings of this report and practically utilize in service delivery improvement plans and development planning.

It is however important to note that in December 2009 the province held an economic summit with the purpose of developing a strategy to deal with the impact of the recession and fast track economic growth and development in the province. The resolutions of the economic summit form the basis of economic planning in the medium term and will also serve to inform the review of the Provincial Growth and Development Strategy. It is expected that effective implementation of these strategies will contribute to the growth, transformation and diversification of the provincial economy while creating employment opportunities.

Financial Management
Honourable Members, financial governance remains a challenge in the province as we are still faced with the difficulty of attracting and retaining skilled financial management personnel. The province is still below level 3 in terms of financial management capability maturity and this is echoed by non compliance with many financial management prescripts hence the need for interventions by Provincial Treasury to capacitate financial personnel and drive the process of ensuring that the necessary structures are set up at municipalities and departments.
For the 2009 audit cycle, the Province had a slight improvement as the number of unqualified audit opinions increased to 8 departments out of 13, and municipalities increased from 2 to 6. More efforts are still to be directed towards municipalities and two major departments, Health and Education to ensure better results in the coming year.

With performance information audit forming part of the scope of the audit, departments need to prepare and improve on reporting output as this will increase the level of accountability and transparency by government to the electorate. The Auditor-General is planning to express an opinion on performance information in the 2010/11 audit cycle. This means that every department must report on performance information appropriately to avoid adverse audit opinions.

The government has moral and legal obligation to ensure that funds transferred to public entities are used solely for the purpose intended for. Honourable speaker, a process is underway to ensure that all transfers to public entities including Trust Funds and section 21 schools are used in the most efficient, effective and economical manner to enhance transparency and accountability.

It is also imperative honourable members that the management of public finances is used effectively to contribute to economic development and in particular to support SMME development. Through our interaction with SMMEs in the province we have noted with concern the adverse impact that late payments from government departments has on their operations. In order to ensure that no SMME closes shop because of unpaid bills by government departments we are working on mechanism that will allow Provincial Treasury to pay outstanding payments and recoup them from the affected department. It is contravention of the law not to pay service providers within 30 days and punitive measures will be taken against those who fail to comply.

Municipal Finance
Honourable Speaker, it is now common course that amongst the challenges facing government in the current trajectory is the fact that the fiscal framework is significantly constrained by the prevailing economic conditions. The tight fiscal constraint, competing needs of spheres of government particularly local government, the global economic recession and higher than anticipated 2009 wage settlement left little room for spending beyond the key concurrent functions in provincial budgets. This means that we are challenged to do more with less and be more efficient and prudent in the way we manage our resources and execute spending plans.

In line with the objectives of the Medium Term Strategic Framework and the Operation Clean Audits 2014, government will focus on ensuring that municipal finance management is improved. Our analysis of financial management challenges in municipalities shows that problems are mainly at basic or transactional level including poor internal controls, poor quality of financial statements and non-compliance with supply chain management. It is for this reason that we have developed strategies and interventions to address these challenges and ensure that municipalities deliver on this mandate.

Amongst others, through an initiative between the Provincial Treasury and the Department of Corporative Governance, Human Settlement and Traditional Affairs efforts will be made to build capacity for sound financial management at district level. In collaboration with District Municipalities and the Development Bank of South Africa approximately 150 people will be trained on various financial management aspects of municipalities with funding from the Local Government SETA. Recruitment to this program will not only be limited to graduates in the field of finance but would also include graduates with potential from other fields of study. In addition, the Provincial Treasury will second officials currently based in districts to struggling municipalities to provide hands on and financial management support.

The viability and sustainability of municipalities depends heavily on revenue from rates and taxes and for services rendered. One of the challenges in this respect is the fact that some provincial and national government departments have not regularly paid for these services resulting in considerable amounts of money being owed to municipalities. In this respect, the Provincial Treasury has been tasked to work with provincial departments to ensure that a solution is found and that municipalities are paid what is due to them. This will go a long way in alleviating the financial difficulties of our local municipalities and improve the provision of services.

Provincial Financial Position
When our new administration took office, we felt that the first priority was to determine the financial condition of our Province. We conducted a thorough analysis of the Province’s finances to assess the financial challenges. The results of the analysis were not good. There were indications that we have evolving financial problems as a result of continuous overspending by the departments of Health and Education and to a lesser extent Agriculture, Land Reforms and Rural Development – a situation that if ignored or kept unresolved would threaten the future sustainability of the Province and seriously compromise our social programmes.

This administration inherited cumulative unauthorised expenditure for the period 2004/05 to 2008/09 amounting to R672, 586 million as at the end of 2008/09 financial year. At the end of the same financial year, the bank overdraft amounted to R357, 736 million. The predictions for future were even more disturbing. Unless we significantly adjust our course, we would be faced with an increasing debt over the coming years. A heavy debt load limits the government’s efforts or ability to deal effectively with social issues such as poverty, and unemployment which are at the highest priority in the Province. In 2008/09 alone, it cost the Province R39, 1 million to service such overdraft component.

I am proud today to announce that, through the stringent cash flow measures by the Provincial Treasury, but not at the expense of service delivery, we were able to reduce this cost from R39, 1 million to only R3, 5 million as at end February 2010. Honourable Speaker, it is for the first time since 2002 that this scenario prevails and it has resulted to an amount of R9 million being accrued and earned interest. This improvement is a result of our direct efforts to deal with the cash flow problems and ensure that the province significantly reduces the cost of incurring interests.

We had to address the situation urgently because if left unattended, we would be digging ourselves deeper into a hole. We had to turn things around. We needed to develop and implement clear and decisive action plans to address the fiscal problems of Health and Education. We cannot expect to improve our lives without first enduring some short-term pain in return for long-term and meaningful benefits. Fiscal problems facing this province were not created overnight and they cannot be fixed overnight. Our administration may have inherited this serious fiscal situation but we have absolutely no intention of letting our children and grandchildren inherit it from us. We must regain control of our expenditures over a reasonable time frame.

To this effect we have collectively resolved that the debt redemption strategy must be enforced without exception. Departments that overspend their budgets, the overspending will become the first charge against their subsequent budgets and the accounting officers and senior managers who have caused the overspending will be charged with financial misconduct and that this decision will effectively be implemented for the year ending 31 March 2010. As part of Provincial Debt Redemption Strategy, we have set aside an amount of R382, 7 million over the MTEF to offset the accumulated unauthorised expenditure. While it may be difficult to accomplish this task over a five-year mandate, given pressing and competing priorities, it is our responsibility to make sure that this debt is eliminated to its minimum by the end of our term.

Infrastructure Development
Honourable Speaker our point of departure remains that there is a need to direct limited resources to address the most critical needs, to achieve a balance between maintaining and renewing existing infrastructure whilst also addressing backlogs in basic services and facing ongoing changes in demand. And hence I quote from the National Infrastructure Maintenance Strategy published in July 2007 that:

“Therefore it stands to reason that “Investing in infrastructure operations and maintenance offers outstanding opportunities for economic stimulation: jobs are created, capital expenditure goes further, and sustainable delivery can be achieved, while political imperatives and community aspirations can be met.”

It is for this reason that infrastructure development is at the core of our strategy to grow the economy and create jobs. Our commitment is borne by the fact that an amount of R4, 3 billion has been allocated for infrastructure development and maintenance over the MTEF period. Included in the total infrastructure budget is the Infrastructure Grant to Provinces (IGP) which amounts to R2 billion over the 2010/11MTEF.

Our focus in the medium term is to ensure that public investment in infrastructure supports economic development and that more emphasis is placed in maintaining existing infrastructure. Maintenance is usually highly labour intensive, and there are opportunities for contributing to the scaling up of the Expanded Public Works Programme through increased maintenance. Government should play a decisive role in developing the maintenance industry particularly with regards to skills development, Small Medium and Micro Enterprises (SMME) development and the promotion of Broad Based Black Economic Empowerment (BBBEE). Expansion of the maintenance industry will also support initiatives to improve the rural economic environment as ongoing maintenance is required where immovable assets are located.

Furthermore, it is imperative that we find a way to deal with unused government buildings and ensure that there is efficiency in the management of our assets. In the short term we need to decide on whether to dispose of unused government buildings or find a way to use them productively.

In line with what the Honourable Premier announced when she delivered the State of the Province address, a significant amount will be provided to invest in the township revitalization programme. Municipalities and the private sector will have to contribute towards the success of this programme.

In relation to rural development, a coherent and holistic approach is required to ensure that sector departments contribute equitably towards the implementation of this priority. Funding will be channeled towards this priority once all the stakeholders are clear about their responsibility and contribution towards a comprehensive rural development strategy.
Fiscal Response to the Recession
Most importantly, Honourable Speaker, the slowdown in economic activity has impacted negatively on both revenue and expenditure side of public finances. On the revenue side, during the 2009/10 financial year, the national main budget revenue estimate was lower than what was projected at the beginning of the financial year resulting in a budget deficit. The expenditure side remains under pressure to ensure that service delivery is unhindered and to finance the developmental agenda emanating from the electoral mandate in the 2009 general elections.

A budget deficit of 7.3 percent is projected for 2009/10 and 6.2 percent in 2010/11. By 2012/13, the deficit is expected to reach 4.1 percent. In the face of a budget deficit government is still challenged to find ways to delivers on social responsibilities including the provision of basic services. This results in an increase in public debt as government net loan debt is projected to rise from R526 billion at the end of 2008/09 to R1.3 trillion in 2012/13 financial year.

In the midst of all this government remains resolute not fail the aspirations of our people for a better life. Indeed we are conscious that we dare not rest until all our people can say as Nelson Mandela said and I quote:

“I can see a better future. I can find a job. I can learn a skill. Hard work will enable me and my family to have shelter and food. If my children work hard at school and college, they will have a better future and a thousand opportunities”.

It is for this reason, honourable members that government had to find ways to do more with less. We are convinced that working together we can do more. Accordingly, due to the decline in revenue expected for the 2010 MTEF, the three spheres of government were requested to carefully consider their baseline budgets to identify potential savings and also cut expenditure on low priority programmes. Thus far significant savings have been identified in administration as well as non-essential items which include catering, communication, consultants, inventory, stationery and printing, travel and subsistence, accommodation and entertainment. As a result, a total net government savings of R14.5 billion and R12.6 billion in the MTEF was identified at national and provincial spheres respectively.

National savings are to be used to fund additional personnel costs, increased expenditure on public works programmes and the costs of setting up new departments. Provincial savings will be reprioritized to fund other provincial priorities not included in the national framework especially towards stabilizing the budgets of Education and Health. In particular they will be used to reduce funding gaps that exist in provinces’ education and health budgets resulting from higher-than-budgeted occupational specific Dispensation (OSD) salary agreements.
During the Budget Lekgotla held in November 2009 we collectively took a decision that all departments, except Education and Health, should cut their goods and services budgets baselines by 5 per cent over the 2010 MTEF. The realised saving will be utilised to normalise the budgets of the above mentioned departments. However, the Department of Health must first effect efficiency savings before they can become recipient of savings from other departments. Departments, through their Chief Financial Officers (CFOs) were requested to go back and bring forward expenditure reduction proposals in this regard. This process has however not taken place yet. The necessary adjustment in this regard will be effected during the 2010/11 adjustment estimates and the resulting carry through effect will be implemented during the 2011/12 MTEF budget.

I do not want to underestimate the impact that some of these decisions will have over the coming years, however this represents a good and rational opportunity to achieve savings.
Our fiscal stance is still shaped by three goals namely:

  • Ensuring that sufficient resources are available for government to meet its public service commitments and to provide support to the economy as it moves into its next growth phase;
  • Supporting development and alleviating poverty through current expenditure and investments in future capacity;
  • Managing an orderly and gradual reduction of the budget deficit towards a sustainable position in a manner that does not compromise the economic recovery;

Fiscal Framework
Honourable Speaker, the needs are always plenty but the resources limited. Government has had to make difficult choices in order to ensure that despite the shortfall in revenue and the unfavourable economic outlook public services are provided with no hindrance and that large scale public investment in infrastructure development is implemented.
Accordingly, Honourable Speaker, the province received an additional R987, 793 million over the MTEF. R436, 323 million is intended to cover improvements of conditions of service of employees; R243, 107 million will finance the occupation specific dispensation for educators; R80, 019 million will cover occupation specific dispensation for doctors and therapist while Provincial Treasury will receive an additional R15,0 million to increase its capacity to provide additional support to municipalities and lastly a general baseline increase of R46, 223 million and R19, 811 million for Health and Education respectively.
Honourable Speaker, it is an open secret that we are not a world cup hosting province, however, our persuasive efforts has resulted into the province receiving almost R100 million to upgrade the stadium that will be used by Uruguay national team as base camp and to upgrade sports facilities in fifty schools as part of the Fifa World Cup legacy as well as renovation of the Kimberley Theatre.
The total revised allocation for the province amounts to R9, 5 billion in 2010/11, R10, billion in 2011/12 and R10, 9 billion in the 2012/13 financial year.The allocations during this MTEF result in a 7 percent year on year growth and are on average 14.9 percent of the provincial GDP.
Of the R9, 5 billion in 2010/11 mentioned above 23 percent represent conditional grants. In this regard, the total revised conditional grants increases from R1, 9 billion in 2009/10 to R2, 1 billion in the 2010/11 financial. This represent an increase of R439 million or 25 percent.

In the 2010/11 budget proposals three new conditional grants have been introduced, namely; Further Education and Training College Sector Recapitalization Grant, Technical Secondary Schools Recapitalization Grant and Expanded Public Works Programme Grant for the social sector. The creation of the FET College Sector Grant is as a result of function shift to the national sphere of government. Honourable Members, this function has its own implications on the provincial budget. In essence more has been taken away from the provincial baseline allocations than provided for by the department of education. This has resulted in a shortfall of R126, 733 million over the MTEF. The FET College Sector Grant is allocated a total amount of R157, 911 million over the MTEF and this includes provision for the cost of Occupation Specific Dispensation (OSD) for college lecturers.

The Technical Secondary Schools Recapitalization Grant makes provision for equipment and proper facilities in technical high schools in the province. It is allocated an amount of R20, 537 million over the 2010/11 MTEF period. Additional funding of R2, 616 million have also been added to the provincial conditional grants framework in the 2010/11 budget for Expanded Public Works Programme Grant for the social sector. It is intended to assist in funding the non-profit organizations to pay salaries to volunteers currently working in the Home Community Based Care Sector.

In addition to the equitable share and conditional grants, the province generates its own revenue through various user charges and licensing fees. This contributes an annual average of 2 per cent to the total provincial receipts. In the new financial year provincial own revenue is projected to increase from R141, 066 million in 2009/10 to R183, 203 million in 2010/11. This represents an annual growth of 30 percent mainly due to improved capacity and systems particularly in the collection of medical aid claims by the department of health.

Honourable Speaker, Minister Gordhan noted correctly when he delivered the national budget that and I quote “we cannot do the same old things and expect different results”. The provincial own revenue situation requires of us to find innovative ways to optimise collection and use new sources. In this respect, provincial government will tighten controls with municipalities in relation to licensing fees and the newly appointed public entity boards have been tasked with identifying new sources in the gambling arena and ensure compliance with the act. Furthermore, Provincial Treasury will deploy revenue officials to collecting departments to ensure that provincial own revenue targets are met and collection is optimised.

Honourable Speaker, let me take this opportunity to elaborate on departmental allocations for the 2010/11 MTEF period. It should be noted henceforth that our budget priorities continue to be characterized and informed by a pro-poor spending pattern to broaden access to basic services such as Education, Health and Housing for the poor.

We continue to strive for Provincial Budgets that are not only credible but conform to the broad developmental agenda of government. It remains our task to ensure that the budget responds to the material conditions of the people and that the necessary balance is found in terms of how much of the country’s resources go towards expanding the economic opportunities of all citizens?

Social Sector
Broadly, the MTEF policy priorities for the Social Cluster are to enhance the quality of education and skills development; improve the provision of quality healthcare; protecting the poor using the War on Poverty Campaign as a vehicle; promoting youth development; strengthening the human resource base; and building cohesive, caring and sustainable communities

In respect of the department of education, the priorities are to enhance the quality of education and skills development, focusing on improving foundation-phase literacy and numeracy, and on increasing the number of learners passing grade 12 mathematics and science. The department has been allocated an amount of R11, 3 billion over the 2010/11 MTEF period. This includes additional allocations of R262, 918 million over the MTEF earmarked for specific purpose such as OSD for educators. Honourable members I earlier referred to a shortfall of R126, 733 million due to the FET function shift to national government. Part of the technical adjustment amounting to R108, 818 million over the MTEF as a result of data changes in the equitable share has been utilized to offset this shortfall.

The conditional grants allocation to the department of education amounts to R946, 650 million over the MTEF period. This includes a total allocation of R449, 273 million in respect of the Infrastructure Grants to Provinces which has been revised upwards by R143, 354 million to provide for the School Safety Programme and Grade R Infrastructure.

Honourable Speaker, in health our priority is to improve the provision of quality healthcare, with particular emphasis on reducing infant, child and maternal mortality rates, and broadening access to antiretroviral and tuberculosis treatment. In order to give effect to these priorities the department of health is allocated a total amount of R8, 5 billion over the 2010/11 MTEF period. Additional allocations earmarked for specific purpose that amounts to R209, 831 million over the MTEF are made to cater for OSD for Doctors and Therapists, and other Health priorities.

Total allocations to the Department of Health include an amount of R3, 1 billion over the MTEF in respect of conditional grants. This comprises amongst others R1, 3 billion for the Hospital Revitalization Grant, R689, 141 million for the National Tertiary Services Grant, R622, 963 million for the Comprehensive HIV/AIDS Grant and Infrastructure Grant to Provinces amounting to R219, 158 million. Of the R2, 616 million of EPWP Grant for the social sector the share of department of health is R1, 308 million in the 2010/11 financial year.

The Department of Social Services and Population Development is allocated an amount of R1, 5 billion over the 2010/11 MTEF period. This includes an amount of R18, 986 million for the Improvement in Conditions of Serviceand R1, 308 million for Expanded Public Works Programme incentives in the 2010/11 financial year.

The department of Sport, Arts and Culture is allocated an amount of R628, 127 million over the MTEF period. This includes an amount of R285, 159 million allocated in respect of conditional grants and is made up of R209, 238 million for the Community and Library Services Grant and R75, 921 million in relation to the Mass Sport and Recreation Participation Programme.

Economic Sector
Honourable Speaker, our own analysis shows that there is generally an improvement in the social sector with more and more people gaining access to basic services including education, health, and sanitation and so on. However, much more remains to be done in ensuring that our government programme and policy interventions result in rapid economic growth and job creation.

The Honourable Minister of Finance noted during the tabling of the national budget that the key dimensions of our transformation challenge are primarily that:

  • One in four adults seeking working in unemployed, and almost half of our young people have not found work;
  • Income inequality is amongst the highest in the world; and half our population survives on 8 percent of national income;

This honourable members, means that we have to adopt a different approach to doing things. We are challenged to transform the structure of the economy and ensure that the marginalized and poor are brought into the mainstream of economic activity. The Provincial Economic Summit held in December 2009 has made numerous resolutions that will inform both economic planning in the medium term and the review of the PGDS. We expect that such processes must result in rapid economic growth and creation of decent work for our people. The priorities and focus of the economic sector is informed in the main by these realities.

I must also note that we are still challenged to look at ways through which the Economic, Employment and Infrastructure cluster could be better funded to facilitate effective implementation of government’s mandate.

In terms of allocations, the department of Economic Development and Tourism is allocated an amount of R562, 053 million over the next three years. This allocation includes an additional amount of R120, 448 million as result of shifting the Tourism function from the Department of Environmental Affairs and Conservation. An additional amount of R4, 433 million is also allocated and earmarked for the Improvement on Conditions of Service.
The job creation programme is closely related to infrastructure development for economic growth whose impetus is the integrated public infrastructure investment programme. Accordingly, the provincial government has identified public infrastructure investment as the means of responding to the economic downturn focusing on public transport, road construction and maintenance, human settlement and bulk infrastructure.
The Department of Roads and Public Works takes the lead in the implementation of the public infrastructure investment programme. Accordingly, the department is allocated an amount of R2, 6 billion over the MTEF period. The changes to baseline results in a total reduction of R58, 632 million over the MTEF due to the shift of the transport function to the Department of Safety and Liaison. Included in the total allocation is conditional grants amounting R1, 4 billion over the next three years which consist of R1, 3 billion in respect of Infrastructure Grant to Provinces, R94, 232 million for the Devolution of Property Rates Fund Grant to provinces, and an amount of R1, 167 million in respect of Expanded Public Works Programme Incentive Grant in the 2010/11 financial year.

Honourable Speaker, in the medium term the Department of Agriculture, Land Reform and Rural Development will concentrate on the following:

  • Facilitating the development of the provincial rural development strategy;
  • Mobilization and identification of community needs;
  • Assist communities and municipalities on identifying target areas for interventions;
  • Resource mobilization.

In the 2010/11 MTEF period the Department of Agriculture, Land Reform and Rural Development is allocated an amount of R1 billion. An amount of R8, 461 million is made available for purposes of Improvement in Conditions of Service while an additional allocation of R9, 957 million is provided to accommodate the carry through effect of pressures funded in the adjustment budget of 2009/10. Included in the total allocation is Conditional Grants amounting to R413, 283 million. They comprise of an amount of R189, 381 million for the Comprehensive Agricultural Support Programme Grant and R153 million for the Ilima/Letsema Project Grant.
The Department of Co-operative Governance, Human Settlement and Traditional Affairs is allocated an amount of R1, 7 billion over the MTEF period. This includes an additional amount of R21, 501 million due to the shift of the Traditional Affairs function from the Office of the Premier and R13, 713 million for the Improvement in Conditions of Service. The total allocation to the department includes conditional grants amounting to R1 billion in respect of the Integrated Housing and Human Settlement Development Grant.
The Department of Environment and Nature Conservation is allocated an amount of R274, 380 over the next three years. The department’s baseline has been reduced by R120, 448 million over the MTEF due to the shift of the Tourism function to the Department of Economic Development and Tourism. Additional allocation to the department is an amount of R6, 089 million over the MTEF period for Improvement in Conditions of Service.

Governance Cluster
Honourable Speaker, The Governance and Administration (G&A) Cluster’s mandate is to harmonize the work of departments with related mandates and functions and coordinate the implementation of the provincial government programme of action. It strives to improve the quality of life of the people by improving the capacity and organization of the provincial administration. The cluster priorities are derived from government commitment to transform the system of governance to address the challenge of declining trust by entrenching the culture of accountability, honesty and transparency among public servants.
The main priority for the G&A Cluster is to contribute to building a developmental state focusing particularly on improving the capacity and efficacy of the state, delivery and quality of services, entrenching a culture and practice of a transparent and compassionate public service and building partnerships with society and strengthening democratic institutions.

In terms of allocations, the Office of the Premier is allocated a total R414, 785 million over the 2010/11 MTEF period. The baseline of this department has been reduced by R45, 132 million over the MTEF as a result of the reconfiguration of the department that led to the shift of the traditional affairs function and the internal audit unit to the Department of Co-operative Governance, Human Settlement and Traditional Affairs and Provincial Treasury respectively. An additional amount of R6, 634 million is allocated to the department as provision for Improvement on Conditions of Service.
The Provincial Treasury is allocated an amount of R421, 913 million over the MTEF period. This allocation includes an additional amount of R23, 631 over the MTEF provided for the shift of the internal audit unit from the Office of the Premier. An amount of R15 million over the MTEF has been allocated to enable Provincial Treasury to strengthen the MFMA support unit as part of their intervention strategy to support municipalities. Provincially earmarked allocation of R30, 453 million over the MTEF is provided to accommodate the carry through effect of pressures funded in the adjustment budget of 2009/10.

The Provincial Legislature is allocated an amount of R363, 012 million over the next three years. This includes an additional allocation of R5, 850 million in respect of Improvement in Conditions of Service, R8, 937 million for constituency allowance, and R33, 101 million in respect of Political Party Funding. All these allocations are over the 2010/11 MTEF period.
The Department of Transport and Safety and Liaison is allocated an amount of R497, 708 million over the MTEF period. This amount includes an additional allocation of R58, 632 million, as indicated earlier due to the shift of the Transport function from the Department of Roads and Public Works and additional R7, 020 million for Improvement in Conditions of Service. Included in the total allocation are Conditional Grants amounting to R110, 650 over the MTEF in respect of the Public Transport Operations Grant.

Honourable Speaker, it is through these allocations that our government seeks to respond to the aspirations of the multitude of our people. They reflect our determination to ensure that service delivery and that standard of living is improved, the economy grows and jobs are created. Our focus in the current phase is to minimize the impact of the economic downturn on the country’s productive capacity as well as jobs and poverty reduction measures, to identify opportunities for new areas of growth and economic participation, and progressively to set the country on a new growth and development path.

We cannot over-emphasize the need for prudent management and execution of spending plans to ensure that the set objectives are achieved in the most efficient manner. The current economic conditions mean that government is challenged to do more with less. Undoubtedly, all of us do understand that moving forward we must be more efficient and prudent in the way we manage our resources and execute our spending plans.
I wish to conclude by extending my sincerest gratitude to the Honourable Premier Ms. Hazel Jenkins for her support and cooperation as well as the entire Executive Council for the understanding and ensuring that their respective departments work with us to arrive at the status quo.

I must also thank the Heads of Department and Chief Financial Officers for ensuring that the Provincial Treasury receives the necessary information and documentation thereby assisting to table a credible budget.

Special thanks and recognition is extended to Mr. Sello Mokoko, the Head Official of Provincial Treasury and to officials in the Provincial Treasury who laboured diligently and meticulously to ensure that the budget is tabled correctly.

Honourable Speaker and Honourable Members I commend to you:

  • The Northern Cape Appropriation Bill 2010
  • The Estimates of Provincial Expenditure for the 2010/11 MTEF
  • The Northern Cape Socio-economic Review 2010

I thank you


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Office of the Premier 
Private Bag X5016 

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