2004 budget process update

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2004 budget process update

• Joint Budget Committee
• 12 August 2003

NATIONAL TREASURY
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Contents

• Recap of budget process
• Economic outlook
• Strategic priorities
• National, provincial and local
• Next stage in budget process
• Division of Revenue and MTEC
• MTEC Budget Day

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MTEF budget process
Medium term policy review
Macroeconomic framework, fiscal policy DoR
Preparation of MTSF
MTBPS
Cabinet lekgotla
Cabinet lekgotla
Jan April July
Oct 2003
Departmental and agency planning budgeting
Preparing budget submissions
MTEC review recommendations to Cabinet
Preparation of Budget Documents
May Aug Nov
Feb 2004
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Key dates
Prioritisation preparing MTSF MinComBud 5 June MT spending priorities
Prioritisation preparing MTSF Ministerial letters 14 July MT spending priorities
Prioritisation preparing MTSF Cabinet lekgotla July MT spending priorities
Preparing submission Financial statements 27 June Ongoing consultation with departments to facilitate refining of submission
Preparing submission Annual reports 25 July Ongoing consultation with departments to facilitate refining of submission
Preparing submission MTEC submission 5 August Ongoing consultation with departments to facilitate refining of submission
Division of Revenue 28 August
National and provincial MTECs National and provincial MTECs September September
MTEF approval MinComBud 31 Oct Programme changes to baseline
MTEF approval Cabinet approval November Programme changes to baseline
MTBPS / adjusted estimates November
Budget Day February 04
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Economic Outlook

• After GDP growth of 3 last year, economy has
  slowed in first half of 2003
• Mainly due to weak global economy
• Strengthening of rand has inhibited exports
• High interest rates have held back investment
• Higher growth in 2004 and 2005 nonetheless
  expected
• Downward trend in CPIX paves way for lower
  interest rates
• Continued growth in labour productivity

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Strategic priorities possible implications for
the 2004 Budget

• Critical social and development challenges
  largely relate to provincial and local functions
• 2004 Budget will build further on existing budget
  priorities
• Child support grant, school nutrition
• Hospital improvements
• Municipal infrastructure employment
• Reinforcement of land restitution
• Etc
• Longer term infrastructure plans need to be fully
  integrated into MTEF

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National priorities

• Courts administration and capacity of SAPS
• Land redistribution, agricultural development
• Management systems, e-government, and HANIS
• Assistance to SMMEs
• Higher education restructuring, NSFAS, skills
  development
• Implementation of Government Security Agency
• Targeted regional assistance (including
  peacekeeping)

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Likely provincial priorities

• Extending school nutrition programmes
• ECD, Adult basic education, training colleges
• Health services including response to HIV/Aids
  (treatment prevention)
• Improvements in personnel numbers and pay
  progression of education, health welfare
  professional workers
• Roads and rehabilitation of hospitals, clinics
  and schools

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Municipal priorities

• Municipal infrastructure (inc. enhanced public
  works programme,)
• Esp sanitation and community facilities
• Extension of free basic services
• Strengthen municipal regulatory capacity
• Local development planning
• Building and health inspection
• Traffic management and enforcement
• Low-cost alternatives for rural and small-scale
  water supplies to be piloted

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Division of Revenue
Expected outcome Equitable division of national
revenue fund between three spheres of government
Vertical division of revenue between national,
provincial and local government. (political
outcome)
Spending pressures across 3 spheres
Resource envelope
Departmental allocations based on spending
priorities and departmental plans.
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Medium Term Expenditure Committee
Expected outcome Prepare new MTEF
recommendation for Executive consideration and
approval

• Agree on a revised set of measurable objectives,
  programme purpose and structure
• Evaluate competing demands on the basis of
  business plans
• Evaluate new policies and the expansion of
  existing outputs, and its impact on indicative
  allocations

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MTEF approval and Budget preparation
Expected outcome Prepare new MTEF
recommendation for Executive consideration and
approval

• Departments
• Revise strategic plans
• Submit draft chapters for 2004 ENE

Cabinet approve new MTEF
MinComBud peer reviews
ENE tabled in Parliament at time of Budget speech
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Thank you