Cape Town: Departments will have to consolidate programmes and activities, and seek greater value for money from what is available in the Fiscus, the Minister of Finance Pravin Gordhan said today.
Presenting his Medium Term Budget Policy Statement, Gordhan said budget allocations to departments remain largely unchanged over the 2012 Budget, reflecting the challenging economic environment and fiscal constraints that the government is operating in.
The revised estimate of total appropriated expenditure in 2012/13 is R967.5 billion – R1.9 billion less than the estimate in the 2012 Budget and 8.9% more than the R888 billion the government spent in 2011/12.
In all, R1.5 billion will be allocated to cover the costs of higher than expected salary adjustments in national departments following this year’s public-sector wage settlement.
An additional R4 billion will be added to the provincial equitable share for higher-than-anticipated salary costs related to the public-sector wage settlement, while an extra R87.3 million will added to the Further Education and Training (FET) colleges grant to cover the cost of the wage settlement.
A further R1.5 billion of balances in 2011/12 will be ploughed back into the fiscus, while R3 billion that will not be spent in 2012/13 and has been declared as savings by departments.
An extra R440.1 million refunded to departments for monies paid directly into the National Revenue Fund from department-specific activities.
Of the R949 billion in total allocations next year, 47% will go to national departments, 44% to provinces and nine percent to local government.
Provinces will get an additional R366 million to spend on infrastructure in the health sector, an extra R180 million for the health infrastructure grant and a further extra R186 million to add to the hospital revitalisation grant.
Provinces will next year get R418 billion in allocations, rising to R478 billion in 2015/16.
Gordhan said changes to the provincial grant programmes over the next three years would include additional funds allocated to the comprehensive HIV and Aids grant to compensate for a reduction in donor funding and to allow for rising treatment numbers.
Funds will also be added to the human settlements development grant for upgrading informal settlements.
Added to this spending on provincial roads will continue to increase and increased allocations will be made to the community library services grant.
Gordhan said provinces spent 98.7% or R368.3 billion of their adjusted budget of R373 billion in 2011/12, while national departments, which spent 97.7% or R498.9 billion of their R510.9 billion adjusted appropriation.
Spending on compensation of employees by provinces accounted for 59% of expenditure in 2011/12.
Though underspending from provinces, which are primarily responsible for delivery of health and education, amounted to R3.5 billion, Gordhan said there were signs of capital spending having improved in the first six months of 2012/13.
He said in the first six months of 2012/13, provinces had spent R189.2 billion or 48.7% of their main appropriation for the year, while national departments had spent 47.1% or R257.1 billion of their R546.4 billion in allocations over the same period.
He called on provincial governments to modernise their supply chain management systems to deliver projects on time, at the right price and of the required quality.
“We will channel more funding to provinces that adopt transparent systems and demonstrate their readiness to implement projects effectively,” he said.