PRESENTATION TO PORTFOLIO COMMITTEE ON PROVINCIAL AND LOCAL

Craig Clerihew: Chief Financial Officer

9 November 2004

1. Medium Term Budget Policy Statement
2. Medium Term Expenditure Framework
3. Quartely Financial Statements of the Department

1. Medium Term Budget Policy Statement

• The Medium Term Budget Policy Statement (MTBPS) provides a concise overview of the Government's economic, social and development policy priorities.

• Its point of departure is a Medium Term Strategic Framework (MTSF).

• The presentation will concentrate on the impact on the mandate of dplg.

• Facilitating economic activity within the second economy

• Promotion of mobility between informal and formal economy
• Expanded public works programme
• New direction in municipal grants to give impetus to community development

• Improving the capacity of the state

• Consolidation of municipal grants programmes
• Creation of multi-purpose community centres and employment of Community Development Workers
• Extension of monitoring and evaluation systems into all areas of service delivery
• Reinforce spirit of partnership with all sectors

• International relations for growth and development

• Promotion of regional integration
• Normalisation of situations in Southern Africa

Strategic Interventions

• Need to address social exclusion

• Growing the Economy
• Active state intervention in the second economy
• Reducing reliance on welfare grants
• Improving the performance of the State

• State is a facilitator of economic growth

• Key Areas:
• Capacity of Local Government
• Capacity of Government Communications
• Improving Partnerships
• Combating crime
• Improving International Relations

• Improving capacity of local government to provide services and stimulate economic growth

• Alignment of Local Planning with National and Provincial Economic Imperatives (IDP, PGDS, IVITSF and NSDP)
• Transfers to municipalities should be tied to capacity and plans to implement economic services
• Introduce asymmetry in allocation of resources and responsibilities
• Mechanisms for staff mobility across spheres within the next 3 years

• Improving the capacity of the state

• 200 multi-purpose community centres created within 5 years
• Monitoring and evaluation system in critical centres of government in place within 5 years
• New culture of operation informed by the People Contract
• Expansion of employment of Community Development Workers - at least one within each local government constituency within 5years

• Central theme of the Medium Term Strategic Framework recognizes the Government has to pursue higher economic growth through all its programmes
• To put the country on a higher development Trajectory which ensures all-round improvement in the quality of life of our people
• Ensure effective communication across all levels of government

• Well articulated vision that puts economic growth and development at the core of our endeavours
• Willingness on the part of all sectors to take part in the People Contract to Create Work and Fight Poverty
• Improving the capacity of all government to address the issues with the seriousness they deserve

• The MTBPS does not cover allocations to specific departments but gives the budget framework and broad priorities upon which allocations will be made in the 2005 Budget.

Budget Framework

• Provincial and Municipal functions are central to the attainment of Government's social and

development objectives

• Additional resources will mainly reinforce existing priorities

• The provincial allocation will see an additional R1,5 billion earmarked for the implementation of the New Housing Strategy

• Social security grants shift to National

• A further R2,3 billion for basic

-MTEF AND DIVISION OF REVENUE2004/05-2007/08 ‘

-REVISION TO LOCAL GOVERNMENT ALLOCATIONS 2004/05-2007/08

AND WOULD BE MADE AVAILABLE ON REQUEST

• R2,3 billion is added to Equitable Share which results in a 41,6% nominal growth over the 3 years.
• R500 million is added to the Municipal Infrastructure Grant which result in a 52,3% nominal growth over the 3 years
• No change to Municipal Systems Improvement Grant

• Growth in Budget

• Expenditure Outcomes

• Operating Budget
• Transfers

PMG NOTE THE TABLES AND GRAPHS ON THE FOLLOWING AREAS

-BUDGET : 2000/01-2004/05

-OPERATING BUDGET-YEAR ON YEAR

-OPERATING BUDGET-COMPARTATIVE SPENDING

-OPERATING BUDGET-ECONOMIC CLASSIFICATION 30 SEPTEMBER 2004-

-TRANSFERS TO PROVINCIAL AND LOCAL GOVERNEMNT 30 SEPTEMBER 2004

-COMPARATIVE DORA TRANSFERS