National Treasury

1
National Treasury

• 2003 Budget Vote Presentation

2
Strategic focus objectives

• Promote economic development, good governance,
  social progress rising living standards
• Advance economic growth income redistribution
• Ensure accountable, economic, efficient
  sustainable management of public finances
• Advocate enforce transparency in the use of
  public resources

3
Strategic focus objectives

• Support sound budgeting financial management
  and the equitable division of resources between
  the three spheres of government
• Ensure that tax policy is fair well formulated
  so that Government is able to raise revenue
  efficiently equitably
• Manage Governments financial assets
  liabilities efficiently

4
Achievements 2002/03

• Firm foundation for growth development
• Resilient economic performance
• Robust fiscal framework
• Sound efficient tax policy design tax relief
  tax-driven stimulation measures
• Declining debt service costs
• Enhanced budgeting financial management
• Measurable objectives output targets in 2003
  ENE
• Publication of 3-year strategic plans
• 2003 Intergovernmental Fiscal Review reviews
  spending service delivery at the provincial
  local level
• Stronger relationship with provincial local
  government

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Achievements 2002/03

• Efficient debt management
• Improved international credit ratings
• Broadening of international investor base
• Restructuring consolidation of domestic debt
  portfolio
• Diversified funding instruments improved
  liquidity
• Improved PFMA implementation
• Monthly quarterly monitoring reporting
• Steady progress in decentralised financial
  management
• Enhanced international regional engagement
• Nepad regional policy reform
• Extensive interaction with multilaterals
• Implementation of the new SACU agreement

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Strategic priorities 2003 2006

• Promoting sustainable growth development
• Strengthening initiatives to reduce poverty
  increase job creation
• Enhancing budget transparency planning
• Improving financial management quality of
  spending
• Advancing procurement reform processes
• Reinforcing the quality of financial accounting
  reporting in line with GRAP
• Ensuring efficient Government debt financial
  asset management
• Deepening relations with international
  multilaterals on international financial policy
  development

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Sustainable growth development

• Over the next 3 years
• Formulating growth-enhancing macro policies that
  contribute towards investment job creation
• Maintaining a sound, but more expansionary fiscal
  stance
• Supporting step-up in national, provincial
  municipal infrastructure investment PPPs
• Gradually liberalising exchange controls
• Ongoing tax policy reform incl. retirement tax
  reform joint exchange control tax amnesty

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Poverty reduction job creation

• Over the next 3 years
• Expanding sectoral policy capacity monitoring
  service delivery progress
• Increasing resources to provincial local
  government to extend coverage improve quality
  of basic social services
• Reviewing the provincial local equitable share
  formulae 2001 Census demographic data
• Strengthening provincial local government
  planning, budgeting, financial management
  delivery capacity

9
Budget transparency planning

• Over the next 3 years
• Increasing political oversight of budget process
• Enhancing measurable objectives, service
  delivery information output targets
• Strengthening link between strategic planning,
  3-year budgeting reporting at national
  provincial
• Extending reporting requirements on
  conditionalgrants under Division of Revenue Act
  to non-financial, service delivery information

10
Financial management accountability

• Over the next 3 years
• Implementing PFMA at national provincial level
  and MFMA at local level
• Extending municipal financial management reforms
• Providing managing systems for monitoring
  managing expenditure
• Monitoring reporting on PFMA implementation
• Roll-out of financial-management training
• Completing financial management systems (BAS)
  implementation
• Developing integrated financial management system
  master plan

11
Procurement reform processes

• Over the next 3 years
• Phasing in implementation of supply chain
  management practices
• Delegating procurement authority from state
  tender boards to departmental procurement units
• Repealing national provincial state tender
  board legislation closure of offices
• Regulating monitoring supply chain management
  practices
• Managing transversal contracts on behalf of
  Government

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Financial accounting reporting

• Over the next 3 years
• Phasing in implementation of GRAP migration
  from cash to accrual accounting 85 of approved
  policies implemented by March 2006
• Finalisation of accounting policies practices
  in line with GRAP 6 critical policies
  finalised and circulated by July 2003 for
  implementation
• Implementing uniform annual financial statements
  reporting requirements
• Facilitating implementation of internal audit
  framework, policies practices

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Liability asset management

• Over the next 3 years
• Continuing to focus on debt cost reduction
• Continuing diversification of funding instruments
• Completing development of full-yield curve of
  inflation linked bonds
• Broadening investor base in government bonds
• Pursuing international credit rating upgrades
• Eliminating the Net Open Forward Position
• Improving cash management practices
• Reviewing implementing risk management
  framework
• Undertaking corporate governance review of state
  owned enterprises

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International financial engagement

• Over the next 3 years
• Strengthening relations with international
  multilaterals IMF, World Bank, African
  Development Bank, G20, G24 on international
  financial policy development
• Boosting efforts on Nepad capital flows
  initiative ongoing reform of SADC institutions
• Strengthening Common Monetary Area
• Completing the establishment of Financial
  Intelligence Centre in line with Financial
  Intelligence Centre Act

15
Organisational restructuringAchievements in
2002/03

• Treasury restructuring in line with Resolution 7
  public sector transformation restructuring
• 8 divisions employ 500 professional admin staff
  increasing to 750 by 2005
• New organisational structure developed senior
  management key professional positions filled
• Refurbishment renovation of accommodation 40
  Church Square 240 Vermeulen Str.

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Compliance with PFMA

• Unqualified audits ( 3rd year running)
• CFO appointed
• Internal audit outsourced
• Risk management assessment completed risk
  management committee established
• Fraud prevention plan developed
• Audit Committee established
• Piloting of procurement reforms

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Effective organisational development

• Enhancing HR policies and systems incl.
  performance management system ETD
• Redesigning IT infrastructure
• Continuous improvement of financial manual
• Consolidating parliamentary services
• Enhancing Office of the DG (COO)
• Continuing implementation of affirmative action
  employment equity practices

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Staff Profile as at 31 March 2003
Management
Employees below Management
GENDER
GENDER
RACE
RACE
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Estimates of Expenditure Operational Budget
Programme VOTED BUDGET
Increase/ 2002/03 2003/04 Decrease
R000 R000 1.
Administration 118 405 102 382
-14 2. Economic planning budget
management 124 354 122 593 -1
3. Asset Liability Management 31 613
42 831 35 4. Financial management
and systems 313 584 357 716
14 5. Financial accounting and
reporting 56 195 63 208 12
TOTAL OPERATIONAL BUDGET 644 151 688 730
7
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Estimates of Expenditure Transfers
VOTED BUDGET
Increase/ 2002/03 2003/04
Decrease R000 R000
Operational budget 644 151
688 730 7 6. Provincial
local government transfers 2 480 000
3 061 403 23 7. Civil and
Military Pensions, Contributions to Funds
and Other benefits 1 915 635 2 029
569 6 8. Fiscal transfers 5
316 868 5 992 605 13 TOTAL
BUDGET 10 356 654 11 772 307
14
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Fiscal transfers

• Programme 8 2003/04 2004/05
  2005/06
• R000 R000 R000
• International transfers
• Lesotho and Namibia 157 632 167 044
  177 767
• Contribution to HIPC initiative 55 000
  55 000
• African Development Bank contributions 129 567
  154 316 163 575
• SA Revenue Service
  3 792 007 4 602 509 4 748 312
• Development Bank of Southern Africa 40 001
  40 001 40 001
• Financial and Fiscal Commission 12 679
  13 759 13 875
• Secret Services NIA, SASS and SAPS
  1 768 718 2 055 239 1 979 940
• Financial Intelligence Centre 37 000
  12 720 13 483
• Other 1 1
  1
• TOTAL FISCAL TRANSFERS 5 992 605
  7 100 589 7 136 954