National Treasury

1
National Treasury

• Budget Vote Presentation

1 June 2004
2
(No Transcript)
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Towards a Ten Year Review

• Economic consolidation
• Sustained, steady growth
• Lower inflation, interest rates
• Well-diversified financial markets
• Healthy public finances
• Favourable trade and industrial environment
• Implementation of RDP 10 year review
• Meeting basic needs
• Growing the economy
• Democratising the state and society
• Developing human resources

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10 Years of Growth
1984-1993
1994-2003

• Growth around 3 a year
• Investment expands 4,7 a year
• Inflation down to lt6
• Deficit down to around 3
• Fin account, net inflows of R169,6 bn
• Unprecedented ratings upgrades

• Growth of 1 a year
• Investment shrinks 2,9 a year
• Inflation averages 14,3
• Deficit up to 7,2 in 1993
• Fin account net outflows of R46,1 bn
• Investment boycott

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Major Social and Economic Challenges Ahead

• Reducing poverty
• Halving unemployment rate by 2014
• Particularly among youth
• Countering vulnerability
• Narrowing inequalities
• Nation-building
• Culture of ploughing back, not plundering
• Bridging two economies divide

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Priority Framework 2004-2014
Increasing investment in infrastructure,
industrial capital (16 to 25 of GDP)
Improving education, training and skills
development to raise productivity
Fighting poverty and inequality through work
opportunities, income support and empowerment
Improved regulation of markets and public
entities, and efficient public service delivery
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New Roles For Treasury

• Greater focus on policy coordination within
  government
• Joint planning needed with key departments
• Strengthen engagement with private sector, NEDLAC
• More proactive, forward-looking
• Greater scope and reach of policy
• Expertise-intensive, knowledge-based
• Relies on healthy relations with other
  departments, provinces and municipalities

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Strategic Priorities 2004-2007

• Accelerate growth and enhance social development
• Strengthen job creation and poverty alleviation
  initiatives
• Deepen budget reform agenda and enhance
  transparency
• Sharper focus on financial management reforms and
  accountability
• Procurement reform
• Efficient debt and financial asset management
• Review of division of revenue
• Strengthen relations with multilateral orgs.,
  e.g. IMF World Bank NEPAD SADC and AU

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Accelerate Growth and Enhanced Social Development

• Formulating growth-enhancing macro policies that
  contribute towards investment and job creation
• Maintaining a sound, growth oriented fiscal
  stance
• Supporting step-up in national, provincial and
  municipal infrastructure investment
• Partly through PPPs
• Further progress in liberalising exchange
  controls
• Ongoing tax policy reform

10
Strengthen Job Creation and Poverty Alleviation
Initiatives

• Expanding sectoral policy capacity and monitoring
  service delivery progress
• Increasing resources to provincial and local
  government to extend coverage and improve quality
  of basic and social services
• Strengthening provincial and local government
  planning, budgeting, financial management and
  delivery capacity

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Deepen Budget Reform Agenda and Enhance
Transparency

• Increase oversight into spending and service
  delivery
• Improve use of measurable objectives
• Incorporate non-business public entities into
  budget process
• Greater attention to long-term expenditure
  drivers
• Strategic planning over five years

12
Sharper Focus on Financial Management Reforms and
Accountability

• Review success of PFMA implementation
• Improve financial governance especially over
  public entities
• Future reforms to focus on improved outputs and
  performance accountability
• Introduction of standard chart of accounts and
  new economic reporting format
• Roll out of MFMA

13
Procurement Reform

• Roll-out of the implementation of supply chain
  management practices
• Aligning the PPPFA Regulations with the
  principles of the BBBEE
• Prescribe minimum norms and standards for supply
  chain management
• Facilitate transversal contracts on behalf of
  Government
• Extending the principles of supply management to
  the local sphere of government

14
Efficient Debt and Financial Asset Management

• Continuing to focus on debt cost reduction
• Continuing diversification of funding instruments
• Broadening investor base in government debt
• Pursuing international credit rating upgrades
• Reducing the realised losses on the Gold and
  Foreign Exchange Contingency Reserve Account
• Improving cash management practices
• Improving transparency through efficient
  dissemination of information
• Developing on integrated Asset and Liability
  Management System
• Reviewing and implementing risk management
  framework
• Undertaking corporate governance review of state
  owned enterprises

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Review of Division of Revenue

• Review local government fiscal framework
• Review provincial and local government equitable
  share formulae
• Review infrastructure grant formulae
• Probe provincial and municipal tax powers

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Strengthen Relations With Multilateral
Organisations

• Give economic content to NEPAD and AU programmes
• Increase economic integration within SADC
• Improve role in international financial
  institutions IMF/World Bank Global Stability
  Fund etc set Africas development agenda
• Minister chosen to serve on Commission for Africa
  Treasury to play key support role

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Organisational Overview

• New DG appointed
• Approved posts 850 485 Filled
• Restructuring completed
• Excess staff 19 and vacant posts 365
• Strategic Planning conference in July/August
• Continuous improvement of financial manual
• Consolidating parliamentary services
• Continuing implementation of affirmative action
  and employment equity practices

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Staff Profile as at 31 March 2004
Employees below Management
Management
GENDER
GENDER
RACE
RACE
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Estimate of Expenditure Operational Budget
Programme VOTED BUDGET
Increase/ Decrease
2003/04 2004/05
R000 R000 1.
Administration 111 890
101 879 -9 2. Economic
planning and budget management 128 263
140 207 9 3. Asset and
Liability Management 42 831 42 271
-1 4. Financial management and
systems 370 950 352 455
-5 5. Financial accounting and reporting 63
323 66 182 5 TOTAL
OPERATIONAL BUDGET 717 257 702 994
-2
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Estimates of Expenditure Transfers
VOTED BUDGET
Increase/
Decrease
2003/04 2004/05
R000 R000 Operational
budget 717 257 702 994
-2 6. Provincial and local government
transfers 3 284 318
3 889 260 18 7. Civil and Military
Pensions, Contributions to Funds and
Other benefits 2 449 569 2 163
966 -12 8. Fiscal transfers 6
142 152 7 185 511 17 TOTAL
BUDGET 12 593 296 13 941 731
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Fiscal Transfers

• Programme 8 Voted Budget
  MTEF MTEF
• 2003/04 2004/05 2005/06
  2006/07
• R000 R000 R000
  R000
• International transfers
• Lesotho and Namibia 304 633 176 367
  199 037 224 627
• Contribution to HIPC 55 000 55
  000
• African Development Bank 129 567
  154 316 163 576 173 423
• SA Revenue Service 3 792 007
  4 602 509 4 748 312 5 033 210
• Development Bank of SA 40 000
  40 001 40 001 40 000
• World Bank Group 1 1 1
  1
• Financial and Fiscal
• Commission 12 679 15 394
  15 577 16 073
• Secret Services 1 771 265 2
  117 057 2 080 063 2 223 086
• Financial Intelligence Centre 37 000
  21 866 23 617 21 410
• Commonwealth Fund - 3
  000 3 000 3 000
• TOTAL FISCAL TRANSFERS 6 142 152 7 185 511
  7 273 184 7 734 830

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THANK YOU

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