200708 Preliminary Expenditure Outcomes Economic Services

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2007/08 Preliminary Expenditure
OutcomesEconomic Services
Joint Budget Committee 30 May 2008
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SCOPE ECONOMIC SERVICES

• Preliminary expenditure outcome Summary for
  Economic Services
• Table Budget available vs. Actual Expenditure
• Summary Vacancy rates on critical posts
• Summary Virements
• Detail expenditure outcomes per department
• Department of Agriculture
• Department of Land Affairs
• Department of Environmental Affairs Tourism
• Department of Public Enterprises
• Department of Science Technology
• Department of Trade Industry

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Preliminary expenditure outcome Summary per
department
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Summary Last quarter spending trends
1 Month 8 1 Quarter 25
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Economic Services underspending
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Summary Virements on expenditure
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Summary Vacancy rates on Approved Establishment
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Detail Expenditure Outcomes and Major Issues Per
Department

• Per department detail expenditure outcomes and
  major issues
• (1) Major projects
• (2) Observations and Analysis - Explanations on
  major current expenditure virements and major
  underspending /deviations
• (3) Details on Actual spending vs. Budget Table
  1
• (4) Last quarter spending Table 2
• For
• Department of Agriculture - VOTE 23
• Department of Land Affairs - VOTE 27
• Department of Environmental Affairs Tourism -
  VOTE 25
• Department of Public Enterprises - VOTE 30
• Department of Science Technology - VOTE 31
• Department of Trade Industry VOTE 32

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Department of AgricultureTable 1 Actual
spending vs. Budget
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Department of AgricultureTable 2 Last quarter
spending
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Department of Agriculture Observations and
Analysis

• Preliminary Expenditure Outcome
• The Department has spent 95.6 which is an
  improvement
  from 06/07 financial year's expenditure of
  93.7
• Expenditure on transfers and subsidies for
  February increased by 154 from Januarys amount
  of R130m due to transfers of R250m for
  Agricultural Disaster.
• Transfers and subsidies
• Total Transfers as percentage of available
  funds 72.7
• Virements
• R77.04 m was shifted from current expenditure to
• Transfers and subsidies (R41.854m)
• Payment to capital assets (R35.186m)
• Major underspending/deviations
• Agriculture Vote underspent by R141.182m or 4.1
  of the allocated budget
• Prog 3, Bio-Security and Disaster Management
  underspent by R98. 231m due to unprocessed claims
  for the compensation of farmers whose pigs were
  culled during Classical Swine Fever Campaign.
• Prog 1, Administration underspent by R26.580m
  due to planned project driven by Dept of Public
  Works that could not be carried out as planned.

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Department of Agriculture Major Projects

• Major Activities/Projects
• - Land bank (R700m) recapitalization
• - ARC (R488m) Parliamentary Grant
• - CASP ( R415m) - Targeted 80 000 emerging
  farmers in 9 Provinces.
• - Agric Disaster(R300m)- Relief to 2 688
  farmers fires, drought, hailstorm, cold spell
• - MAFISA (R250m)- Micro Loans to 1 990 farmers
  eg for poultry, farming inputs, equipment.
• - AgriBEE (R50m) - 8 projects (empowerment
  deals)
• - Land Care (R46.7m) - soil conservation, alien
  plants control, employing
• 674 303 people

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Department of Land AffairsTable 1 Actual
spending vs. Budget
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Department of Land Affairs Table 2 Last quarter
spending
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Department of Land Affairs Observations and
Analysis

• Preliminary Expenditure Outcome
• Department spent R5.8b or 99.5 of allocated
  budget
• Expenditure improved as a result of increases in
  Transfers in Restitution
• Transfers and Subsides
• Transfers of R3.8b amounted to 64 of Department
  budget, of which
• Prog 4 Restitution - Restitution Grants of R3.3b
  amounted to 56 of department budget
• Prog 5 Land Reform - Land Reform Grants of R481m
  amounted to 8.1 of Department budget
• Major Current Expenditure Virements
• Total Virements of R523m amounted to 8.83 of
  Department budget, of which
• Prog 5 Land Reform - Reprioritisation of R505m
  (50) in Land Reform Grants shifted to Land
  Acquisition Capital (PLAS) to accelerate land
  reform

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Department of Land Affairs Observations and
Analysis(2)

• Vacancy rate
• Department vacancy rate equals 27.3, of which
• SMS vacancy rate 35.6
• Non-SMS vacancy rate 27.2
• Major underspending/deviations
• Department underspent by R30.7m or 0.5 of
  allocated budget, of which
• Prog 5 Land Reform - Underspent by R22.3m or
  1.4 of Programme budget
• Underspending possibly due to negotiations delays
• Prog 7 Auxiliary and Associated Services
  underspent by R5.3m or 46 of Programme budget

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Department of Land Affairs Major Projects

• Major Activities/Projects
• Prog 4 Restitution - Finalisation of remaining
  4 911 complex restitution claims
• Transfers - Restitution Grants of R3.3b amounted
  to 91 of Programme budget and 56 of Department
  budget
• Service Delivery - 432 226ha restituted
• Prog 5 Land Reform - Land Redistribution
  Projects include LRAD and PLAS
• Transfers Land Reform Grants of R481m amounted
  to 30 of Programme budget and 8.1 of
  Department budget
• Land Acquisition Capital - PLAS acquisitions of
  R843m amounted to 53 of Programme budget and
  14 of Department budget
• Service Delivery - 340 880ha redistributed and
  169 818ha acquired through PLAS

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Environmental Affairs Tourism Table 1
Actual spending vs. Budget
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Environmental Affairs Tourism Table 2 Last
quarter spending
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Environmental Affairs Tourism Observations and
Analysis

• Preliminary Expenditure Outcome
• Department spent R2.79 billion or 99.9 of
  allocated budget
• Saving mainly on goods and services
• Since 2006/07 the department has spent 99.9 of
  its allocated funds
• General Spending trends
• 75.8 of departments spending on transfers
  mainly to public entities and EPWP
• 12.3 on compensation of employees
• 11.5 on goods and services
• Major Current Expenditure Virements
• The department shifted 0.3 of its allocated
  funds after the Adjustment Estimate, this was
  mainly to fund expanded public works programme
  projects under Programme 6 Social Responsibility
  and Projects as well as to fund payment for
  capital assets (mainly equipment for newly
  appointed staff)

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Environmental Affairs Tourism Major Projects

• Major Activities/Projects
• EPWP focuses mainly on the following areas
  coastal development, tourism infrastructure and
  tourism product development, waste management,
  biodiversity and conservation and Working for
  Wetlands.
• During the Adjustment Estimate an additional R200
  million was rolled over for this programme. R170
  million was allocated for transfer payments and
  R30 million for doing feasibility studies related
  to projects.
• After the Adjustment Estimate the department
  shifted a further R8.775 million to pay for
  projects.

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Department of Public EnterprisesTable 1 Actual
spending vs. Budget
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Department of Public Enterprises Table 2 Last
quarter spending
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Department of Public Enterprises Observations
and Analysis

• Preliminary Expenditure Outcome
• Department spent R4.6 billion (99,99 or 100) of
  allocated budget
• General Spending trends
• Transfer payments were the largest expenditure
  item and amounted to 97.2 of the total budget.
• Major Current Expenditure Virements
• The total virements were mainly effected from
  compensation of employees to fund
  over-expenditure under goods and services and
  payments for capital assets (computer equipment)
  amounting to R2.5 million.
• Major under spending/deviations
• Under spending amounted to R1.106 million or
  0.02 of the total budget due to mainly over
  provision of the Denel indemnity claim.
• Programme 4 Manufacturing Enterprises under
  spent the most i.e. by R1.038 million in respect
  of the transfer payment to Denel (indemnity
  claim)

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Department of Public Enterprises Major Projects

• Major Activities/Projects
• South African Airways R744 million was allocated
  as transfer for restructuring of staff (Labour
  costs) in line with short term intervention
  strategy.
• Denel Support Denels turnaround strategy,
  transfers of R933 million for further
  capitalisation and R222 million for payment of
  indemnity guaranteed.
• PBMR Transfer payments totaling R2.5 billion for
  Operational expenses as well as major contracts.

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Department of Science Technology Table 1
Actual spending vs. Budget
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Department of Science Technology Table 2 Last
quarter spending
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Department of Science Technology Observations
and Analysis

• Preliminary Expenditure Outcome
• R3.127 billion or 99.5 of appropriated funds
• R16.9 million savings mainly on transfers and
  subsidies
• Spending on major items
• 93 per cent on transfers and subsidies
• 6.8 per cent on current expenditure
• 0.2 per cent on payments for capital assets
• Virements
• 0.99 per cent shifted from transfers and
  subsidies to current payments and payments for
  capital in the AENE
• 1 per cent shifted from current expenditure to
  transfers and subsidies payments capital
  expenditure after the AENE

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Department of Science Technology Major Projects

• Major activities/projects
• Completion of the experimental development model
  (XDM) a prototype dish - MeerKAT
• Launching of the International Centre for Genetic
  Engineering Biotechnology
• Finalisation of the design of SANReN by Infraco
  and Neotel at the CSIR

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Department of Trade Industry Table 1 Actual
spending vs. Budget
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Department of Trade Industry Table 2 Last
quarter spending
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Department of Trade Industry Observations and
Analysis

• Major Virements
• Virements to a total amount of R104.587 million
  or 1.9 were effected of which 15 were approved
  by NT
• Mainly effected from Goods and Services under
  various
• Programmes
• to fund over expenditure under
• 1. Transfer payments such as World Trade
  Organisation,
• UNIDO, OPCW and Trade and SEDA.
• 2. Compensation of Employees under Programme 6
  (Trade
• Investment South Africa)

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Department of Trade Industry Observations and
Analysis(2)

• Preliminary Expenditure Outcome
• Department spent R5.3 billion or 96.6 of
  allocated funds.
• This is mainly as a result of the increased
  expenditure in respect of - claims paid out to
  Small Medium Enterprise Development Programme
  (SMEDP),
• recapitalisation of the National Empowerment Fund
  (NEF),
• Coega Industrial Development Zone for
  infrastructure investment, and
• Critical Infrastructure Programme (CIP) for the
  development of infrastructure in respect of the
  ALCAN aluminium smelter project.
• 4 out of 7 programmes expenditure exceeded 95
  of their respective allocated budgets
• General Spending trends
• Main spending Programmes were Programme 3
  (Enterprise Industry Development) mainly policy
  development and 5 (The Enterprise Organisation)
  mainly incentive schemes. Increased expenditure
  mainly related to SMEDP, National Empowerment
  Fund, Coega IDZ and the Critical Infrastructure
  Programme

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Department of Trade Industry Observations and
Analysis(3)

• Major underspending/deviations
• Department underspent by R184.2 million or 3.4
  of total allocated budget
• Programme 1 Administration underspent by R18.0
  million or 5.5 due to Goods Services
  (Consultancy Services) and capital assets
• Programme 5 The Enterprise Organisation
  underspent by R140 million or 5.2 mainly on
  incentive schemes such as BPO, Staple Food
  Fortification, Co-operatives and CIP.
• Programme 7 Marketing underspent the most by
  R6.1 million or 9 mainly on Goods Services
  (Advertising campaigns, Publications and
  Consultancy Services)
• Payments for Capital Assets amounting to R12.9
  million or 34.9 underspent due to Computer
  equipment not delivered and the IT
• Disaster Recovery System project not
  completed
• Goods and Services underspent by R53.3 million
  or 11.9 under various programmes which mainly
  related to Consultancy Services

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Department of Trade Industry Major Projects

• Major Activities/Projects
• Policies presented on the National Industrial
  Policy Framework and the Industrial Policy Action
  Plan
• New Enterprise Investment Programme that will
  replace the previous Small Medium Enterprise
  Development Programme which will also be grants
  mainly to the Manufacturing and Tourism Sectors
• Customised Sector Programmes including the
  review of the MIDP
• Policies developed for Sector Development
  Programmes which include the priority sectors
  such as Clothing Textiles, Agro-processing,
  Automotive Assembly, Chemicals, Pharmaceuticals,
  etc.