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Briefing on IGFR

Briefing on IGFR. Thursday 10 April 2003 Parktonian Presentation Ismail Momoniat. Intergovt Fiscal System. 3 spheres of govt, all with different fncs Biggest budgets at provincial level Prov (R165,2 bn), nat(108,9 bn), LG (R72 bn) 2003 budget non-int allocation of R280 bn

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Briefing on IGFR

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  1. Briefing on IGFR Thursday 10 April 2003 Parktonian Presentation Ismail Momoniat

  2. Intergovt Fiscal System • 3 spheres of govt, all with different fncs • Biggest budgets at provincial level • Prov (R165,2 bn), nat(108,9 bn), LG (R72 bn) • 2003 budget non-int allocation of R280 bn • R171 bn to prov (R159 bn) and LG (R12 bn) • Provinces and munis have own budgets • Allocate national transfers plus own revenue • Prov table budgets after national budget

  3. Intergovt Fiscal Review (IGFR) • Covers 2003 prov budgets, 2002 LG budgets and trends • Also cover past and future budgets (7 years) • Provides consolidated info • Allows comparison between provinces and municipalities • Covers 8 sectors and personnel • Critical document to inform on service delivery

  4. 2003 IGFR • IGFR published earlier • Main reason is to enable Parliament and provincial legislatures to take into account for their budget hearings • Challenge is that info provided will be used by portfolio and select committees • Also for policy-analysts, public etc • Assists shaping 2004 budget and Minmecs • Info to be used in next few months

  5. Provincial Budgets • 2003 Budget consolidated and made comparable by function • 2003 budget R165,2 bn (nat rev R160 bn) • outer years R181,0 bn and R198,4 bn • biggest budget KZN R32,0 bn, smallest NC (R3,9 bn) • social services 80,9% • personnel 49,1% • Capital 11,3% at R18,6 bn, to R22,1 bn in 2005/06 • Non-personnel non-capex R65,2 bn or 39,5%

  6. Local Govt Budgets • Covers 2002-03 municipal budgets • different financial year for munis, starts 1 July • Totals R74,5 bn, with about R13,1 bn capex • Three big budgets: Jhb (R10,9 bn), CT (R9,8 bn), eThekwini (Durban)(R9,3 bn) • Variance in per capita budgets (R4161 Jhb) • Disturbing rise in share of personnel to 32% of operating expenditure (or 45% w/0 bulk) • Problem:non-collection & non-billed losses

  7. Education (2003/04) • Largest single component of provincial budgets 35,6% • R58,9 billion combined budget • R49 billion personnel or 83,7% • Public ordinary schools R48,8 billion (83%) • 11,9 million learners • 364 000 teachers (86% • 27 000 schools • Non-personnel expenditure (capital and NPNC) • NPNC per child, LSM (textbooks) per child

  8. Health • Health 22,3% of total budget • Two types of provinces • those with central hospitals have v high share • those without central hospitals • Personnel share 57,6% (216 092 staff) • Capital share 8,2% • Non-personnel non-capex share rising • Primary health care (R6bn) • Local govt R1,1 bn in metros (3500 staff) • Distribution of doctors between provinces

  9. Social Development • One of great achievements of govt • 2,5 mil beneficiaries in April 1997 • 5,6 million in March 2003 • Rapidly rising share of budget • from 18,9% in 2000/01 to 21,6% in 2002/02 • Rises to 22,9 % in 2003/04, and 25,8% in 2005/06 • EC highest share 26,7%, lowest Gauteng 17,0 % • Less info on social welfare services

  10. Agriculture and Land • Agriculture accounts for 1,9 percent of provincial budgets • Provinces that incorporated former homelands spend between 2,4% and 3,8% • Personnel take up 75% of agriculture budgets • Total land transferred through restitution and redistribution approx 2 m hectares

  11. Roads and Transport • All spheres have some responsibility for: • Roads (Munis R1,8 bn) • Public transport • Traffic Management and safety • Proclaimed road network =532 000km • 63 631km or 16,2 % paved • Provincial roads – 348,527km (>80% not paved) • Roads account for 3,1% of prov budgets • National Transport provides for transport Subsidies – take 60% of its budget • Provinces project to spent R851m on traffic management – rises to about R1 bn 05/06

  12. Housing • 1,5 mil housing opportunities since 1994 • Budget rises to R4,2 bn in 2003/04 • No of subsidies per year over 220 000 • Is this rate slowing down in 2002/03? • Types of subsidies • No of houses transferred over 1 million • Poor collection of rental from housing stock • Local Govt and Housing

  13. Personnel • 1,6 million personnel in public sector • Provinces have over 700 000 • Education 426 913 and Health (216 092) • LG around 210 000 • N govt safety and security (131 560), defence (75 290), justice (15 562), water (9843) • Approx 150 000 in public entities • Problem of superneumeries • LG personnel expenditure rising, non-wage

  14. Water • Role of DWAF, water boards, municipalities • Budgets: Dwaf (R3,1 bn), water boards (R4 bn) and municipalities (R11 bn) • Personnel: DWAF (9900), water boards (6800) and municipalities (12 000) • Free basic services • Price setting process • Water losses

  15. Electricity • Role of 3 spheres of govt (generation, transmission, distribution) • Distribution (Eskom and municipalities) • 22,8% of urban homes not electrified, 50,9% of rural households • Great success of electrification prog • Impact of restructuring on local govt

  16. Annexures • Annexure D: Governance Budgets (Parliament and Provincial legislatures) • Annexure E: Provincial Public Entities • Annexure F: Audit Outcomes

  17. Conclusion • IGFR provides valuable info on provincial and local govt budget trends • Covers 8 key sectors and personnel • Need for deeper coverage over next two months

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