2003 Intergovernmental Fiscal Review Provincial Budget Trends

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2003 Intergovernmental Fiscal Review
Provincial Budget Trends

• 15 April 2003

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Key trends

• 3 spheres of govt, all with different functions
• Biggest budgets at provincial level
• 2003 budgeted non-interest revenue R280bn in
  2003/04
• national -R108,9 bn or 38,9
• provinces-R158,9 bn or 56,8
• local government-R12 bn or 4,3
• provincial share grows to 57,6 per cent in
  2005/06
• Provinces draw up their own budgets after
  national budget
• they allocate national transfers (96,9)plus own
  revenue(3,1)
• national transfers grows to 97,1 in 2005/06

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Key trends

• Provinces are budgeting for financed deficits of
  R1,1 bn in 2003/04 and 2005/06
• once-off in nature
• further bolster infrastructure
• Capital spending growing strong
• great improvement in delivery mechanisms
• R13,7bn in 2002/03
• R60bn over the next three years
• Education and health on average R3 bn per year

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Provincial spending
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Provincial spending
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Provincial spending

• Provinces table expansionary budgets
• Real growth of 7,5 in 2003/04 and 5,3 over the
  MTEF
• consolidate and expand current programmes
• improve outreach of social programmes, especially
  the ones targeting the poor
• addressing poverty and vulnerability

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Social Spending

• Education
• substantial growth in non-personnel non-capital
• provision for LSM and other inputs
• infrastructure
• Health
• recruit and retain health professional with
  scarce skills
• drugs and medicine
• bolster the system against the impact of HIV/Aids
• Infrastructure

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Social Spending

• Social development
• one of the greatest achievements of government
• beneficiaries grew from 2,5 mil beneficiaries in
  1997 to 5,6 mil in 2003
• expect to add a further1 mil beneficiaries over
  next 3 years
• growth in budgets
• protect real value of grants
• increase its coverage (extension of CSG to
  children until 14)
• R1,1bn in 2003/04R3,4bn in 2004/05 and R6,4bn
  in 2005/06

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Non-Social Services Spending

• Housing, provincial roads, agriculture, economic
  affairs, tourism and other admin functions)
• R40 billion on capital over next three years
• positive economic spinoffs for provinces
• improve the quality of provincial infrastructure
• efficient delivery of other services
• contribute to economic growth and job creation

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Provincial Expenditure
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Provincial Expenditure
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Provincial Revenue
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Provincial Revenue
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Provincial Revenue
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Provincial personnelTrends
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Provincial personnelTrends
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Personnel overview

• Personnel management is critical to improving
  service delivery at all levels of Government
• At provincial level
• Good progress in establishing a framework for
  personnel management
• Personnel costs are being managed

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Provincial personnel trends

• Real decline in personnel costs from 1996/97 to
  2001/02
• Decline in personnel numbers over the same period
• Moderate increase in unit labour costs over the
  period
• Moderate real growth in personnel spending going
  forward aimed at
• Increasing employment in health
• Provision for pay progression and
  performance-related pay

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Provincial personnel policy issues

• Poor provinces still spending a lot on surplus
  staff
• Resulting in lower capex and poor staffing in
  education and health
• Need to increase employment in health and welfare
  services
• Especially medical professionals, social workers
• Revised pay system required
• Need appropriate performance-related pay systems
• Need to decentralise personnel management lower
  down the chain
• Giving hospital managers real powers
• Increasing powers of school governing boards

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2003 Intergovernmental Review Provincial Budget
Trends

• NCOP
• 8 April 2003