PRESENTATION TO THE STANDING COMMITTEE ON APPROPRIATIONS

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PRESENTATION TO THE STANDING COMMITTEE ON
APPROPRIATIONS Comments on the 2009 Medium Term
Budget Policy Statement Venue GH46, Good Hope
Building, Parliament
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Purpose of Presentation
To present to the committee the
Departments considerations on the Medium Term
Budget Policy Statement and the financial
performance in the 2nd Quarter
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EXPENDITURE OUTCOMESsix months ending Sept
2009

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(No Transcript)
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Overall spending trends

• Overall budget
• R36.527 billion adjusted appropriation for
  2009/10
• Expenditure for April Sept. 2009
• R15.309 billion or 41.9 of adjusted
  appropriation as against 34.6 of the 2008/09
  adjusted appropriation.
• The main increase compared to previous year is
  related to increases in municipal costs and the
  replacement of the RSC levies with sharing of
  fuel levy by Metros.

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Overall spending trends

• Current payments
• Appropriation for full fiscal year R433 million
• 6 months spending R182.million or 42
• Compensation of employees (46.5)
• Goods and services (39.0)
• Year-on-year spending is similar for compensation
  (46.9 - 2008/09 and 46.5 - 2009/10) and goods
  and services (43.7 - 2008/09 and 39. - 2009/10)
  

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Overall spending trends

• Transfers and subsidies
• Appropriation for full fiscal year R36.080
  billion
• 6 months spending R15.122 billion or 41.9
• Provinces and municipalities (41.9)
• Departmental agencies and accounts (50.5)
• Public Corporations and private enterprises
  (80.8)
• Non-profit institutions (56.6)
• Households (92.4)
• Year-on-year spending is similar across most
  categories except to Non-profit institutions and
  Households.

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Overall spending trends

• Payments for capital assets
• Appropriation for full fiscal year R13.3 million
• 6 months spending R4.8 million or 36.3
• Machinery and equipment (36.3)
• Year on year spending shows decrease in capital
  spending capacity (53. - 2008/09 and 36.3 -
  2009/10) due to vacant posts not yet filled.

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REVISED ALLOCATIONS MTBPS

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LG Transfers by CoGTA Prior Adjustment

Local Government Transfers 2009/10 2010/11 2011/12 2012/13
  Adjusted Medium-term estimates Medium-term estimates Medium-term estimates
  appro- MTEF Baseline MTEF Baseline MTEF Baseline
  priation    
Equitable Share (LGES) 24,355,502 29,267,706 31,889,901 33,484,396
Municipal Systems Improvement Grant (MSIG) 200,000 212,000 224,720 235,956
Municipal Infrastructure Grant (MIG) 11,433,494 12,528,884 15,068,551 15,821,979
Total 35,988,996 42,008,590 47,183,172 49,542,324

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Revision to Baseline 2009/10 - 2012/13 R12.4 billion is added to LG share Revision to Baseline 2009/10 - 2012/13 R12.4 billion is added to LG share Revision to Baseline 2009/10 - 2012/13 R12.4 billion is added to LG share Revision to Baseline 2009/10 - 2012/13 R12.4 billion is added to LG share Revision to Baseline 2009/10 - 2012/13 R12.4 billion is added to LG share Revision to Baseline 2009/10 - 2012/13 R12.4 billion is added to LG share
Local Government          
R Million 2009/10 2010/11 2011/12 2012/13 2010 MTEF
  Adjusted MTEF MTEF MTEF Total
LOCAL 835 1,600 3,000 7,800 12,400
Equitable Share 509 1,200 2,500 4,500 8,200
Conditional grants (direct transfers) 326 400 400 2,900 4,200
Municipal Infrastructure Grant 288 2,500 2,500
 
 
   

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Additional Funds Equitable Share

• The Equitable Share increased by R8,2 billion
  over the MTEF
• For 2009/10 the increase is R509 million to
  compensate municipalities for the increased cost
  of providing free basic electricity to poor
  household
• Department currently working on the split
  through the formula (focus to be on household
  with services and without access to services)

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Additional Funds MIG

• The MIG is revised upwards by R2,5 billion
  over the MTEF to augment municipal capital
  budgets
• For 2009/10 the increase is R288 million (part
  of the roll-over for funds stopped from
  underspending municipalities during 2008/09
  financial year)
• Department currently working on the allocation
  for NT to gazette. In total, 50 municipalities
  will benefit from the R288 million.

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Conclusion

• The department acknowledges the revenue
  shrinkage due to the current economic conditions
  and appreciates the R2,5 billion made available
  for MIG and the R8,2 billion for Equitable Share
  over the MTEF
• The Municipal Systems Improvement Grant (MSIG)
  need to be increased over the MTEF in view of LG
  Turn Around Strategy , Operation Clean Audit.
  The grant indicates a modest increase versus the
  Financial Management Grant (MSIG - R236 mil vs
  FMG R404 mil)

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Thank You