2005/06 - Budget Speech
1
BUDGET SPEECH
2005
Gauteng Provincial Government
3 March 2005
2
Budget Speech - 2005/06
2005/06 - Budget Speech
3
BUDGET SPEECH 2005/2006
Mr S.P Mashatile: MEC for Finance and Economic Affairs
3 MARCH 2005
Comrade Speaker,
Comrade Premier,
Honourable MECs,
Honourable MPLs
Mayors and Speakers of Local Government
Heads of Departments, Government Officials and Leaders of our Agencies
Business Leaders
Members of the Diplomatic Core
Distinguished guests,
The People of Gauteng
Comrades and Friends,
Fifty years ago, on the 26 June 1955, thousands of our people gathered in Kliptown, at a
Congress of the People. At this Congress, they declared to all in our country and the world
to know that South Africa belongs to all who live in it, black and white, and that no
government can justly claim authority unless it is based on the will of the people; and that
our country will never be prosperous or free until all our people live in brotherhood,
enjoying equal rights and opportunities.
In putting together the Charter, the ANC and its allies, asked people what kind of society
they would like to live in. Responses streamed in, written on matchboxes, pieces of toilet
paper, basically anything people could use. These responses were processed into the
Freedom Charter. Our people’s demands were simple and based on an inherent belief in
their right to dignity, respect and human rights.
Our people wanted to build a South Africa where:
1. The people shall govern
2. All national groups shall have equal rights
3. The people shall share in the country’s wealth
4. The land shall be shared amongst those who work it
5. All shall be equal before the Law
6. All shall enjoy human rights
4
Budget Speech - 2005/06
7. There shall be work and security
8. The doors of learning and culture shall be opened
9. There shall be houses, security and comfort
10. There shall be peace and friendship
When spelling out the true meaning of the Freedom Charter to our country and our people,
Comrade Oliver Tambo, in his statement on the 8th of January 1980, said “The Freedom
Charter contains the fundamental perspective of the vast majority of the people of South
Africa of the kind of liberation that all of us are fighting for. Hence it is not merely the
Freedom Charter of the African National Congress and its allies. Rather it is the Charter of
the people of South Africa for liberation…..because it came from the people, it remains still
a people’s Charter, the one basic political statement of our goals to which all genuinely
democratic and patriotic forces of South Africa adhere”.
Ten years ago, on the 27 April 1994, in our country’s first ever democratic elections, our
people once again declared to all and the world to know that South Africa indeed belongs
to all who live in it, that government must be based on the will of the people; that we will
build a new society founded on principles of democratic rule, equality, freedom and justice.
When our first ever democratically elected government took office, it was guided by The
Constitution of the Republic of South Africa, 1996, that espouses all the principles of the
Freedom Charter. Our Constitution, in Chapter 2, guarantees the people the right to
equality, human dignity, freedom and security of the person, life, freedom of expression,
privacy, freedom of association, political rights, housing, healthcare, food water and social
security, education, language and culture, amongst others.
Ten years into our democracy, we continue to be guided by these values as we forge ahead
with our agenda of democratic transformation. It is this vision that determines our
approach to governance and will continue to guide us in the years that les ahead.
As we celebrate ten years of democracy, let us remember to honour men and women who
were the architects of the Freedom Charter, some of whom have now passed on like
Professor Z.K Mathews, Chief Albert Luthuli, O.R. Tambo, Joe Slovo, Lillian Ngoyi, Walter
Sisulu, Rusty Bernstein, Govan Mbeki, Wilton Mkwayi, Raymond Mhlaba and many others.
Those who are still among us like Nelson Mandela, Ahmed Kathrada, Andrew Mlangeni,
Albertina Sisulu continue to inspire us with their wisdom, courage and dedication to
freedom. Two such heroines are amongst us in this House, they are: Deputy Speaker
Comrade Sophie Debryn and Honourable Reverend Chabaku.
Comrade Speaker, as we enter the second decade of our freedom, we pause to look back
at the road we have travelled, from protest to challenge from oppression to freedom to
reconstruction and transformation. We look back so that we can take with us into the
future the critical elements, principles and successes that have helped us deliver the vision
and goals of the Freedom Charter into a Constitution on which our country is governed,
and a system of governance in which “the people are indeed governing”.
The seed of participatory democracy, public accountability, transparency and a
developmental State was planted in the process leading up the development of the Freedom
2005/06 - Budget Speech
5
Charter. The Reconstruction and Development Programme, also a product of mass
participation, takes the Freedom Charter one step further in that it unpacks the way and
provides concrete steps through which the principles and intent of the Freedom Charter can
be implemented. The key principle of the RDP is that all socio-economic development must
be people-centred, people-driven, holistic, integrated and sustainable.
In the past decade we ushered in new progressive legislation guided by democratic values,
as enshrined in the Freedom Charter, the RDP and the Constitution. More than ninety
pieces of legislation and policies were passed by this House, to provide the necessary
legislative framework for delivery of services.
We have put in place credible institutions, which are not only geared towards delivering
services to our people, but are also accountable to the public. Our system of Government,
Legislature and the NCOP continue to focus on the interests of our people, particularly the
poor.
Our people, through their voice, have continued to shoulder the wheel of democracy. They
have demonstrated this by continuing to vote in local, provincial and national elections.
Three successful national and provincial elections and two successful local government
elections were held since 1994. All of these elections were found to be free and fair. In
each of these elections, the ANC was voted into power by an overwhelming majority. This
alone demonstrates that our people continue to show confidence in the leadership of the
ANC.
Honourable Members, we have come to the end of our first decade of democracy having
made major strides and achievements in our Province, as illustrated in the speech of the
Premier last week. Millions of our people today have access to housing, water, sanitation
and electricity. Thousands of our people receive a proper education. Our elderly, children
and people with disabilities receive grants from the State. South Africa has once more
claimed its rightful place amongst the nations of the world. Gauteng can boast successful
economic growth and noteworthy achievements in respect of the provision of these basic
social services.
PROVINCIAL ECONOMIC OUTLOOK
Gauteng remains the main contributor to our country’s economy, accounting for 33% of
South Africa’s Gross Domestic Product (GDP). It is the largest sub-saharan economy,
accounting for more than 33% of Africa’s GDP.
In the past five years, our provincial economy grew at an annual rate of 3.7%, ending at
5.6% in the third quarter of 2004. The largest contributors were tertiary industries;
contributing a total of 60.8% to the Gauteng GGP. Secondary industries were the second
largest contributors with a total of 26.3%. Primary industries have declined by an annual
average of 3.3% between 1995 and 2003. This is due to the structural changes of the
South African economy generally and Gauteng in particular,
Foreign Direct Investments (FDI) have grown from R450 million in 2001 to R1.5 billion in
2003, signaling increased confidence in the South African economy by foreign investors.
Tourism last year increased by 3.1 million visitors.
6
Budget Speech - 2005/06
Our Province is also responsible for 49.6% of all employee remuneration in our country
and 52% of all turnover of institutions. A total of 273 SMME’s have been assisted by the
Provincial Government. Delivery of Blue IQ projects is on track and all 11 projects are at
varying stages of implementation.
Our Provincial growth and development context shows a complex duality. On the one hand,
we have noteworthy achievements and levels of economic growth that must be sustained
and increased. On the other hand we continue to have unacceptably high levels of our
people remaining trapped in poverty, which is exacerbated by issues inclusive of ongoing
unemployment, lack of jobs, lack of infrastructure development and imbalanced foreign and
direct investments. Unemployment remains high, estimated at 28% with the highest being
amongst females at 33.7% as opposed to 23.6% amongst males.
Some of the other challenges we continue to face are illiteracy and underdevelopment in
many parts of our Province. Our housing backlog is still very high, with thousands of our
people living in informal settlements. The scourge of HIV/Aids continues to plague our
communities. Most of our people still do not have access to efficient and affordable public
transport. Women and people with disabilities remain one of the most marginalized sectors
of our society.
Honourable Members, we must applaud our socio-economic successes of the past decade.
At the same time, we must remember that the greatest challenge currently facing our
Province is to achieve the clause of the Freedom Charter that says “The people shall share
in the country’s wealth”. The ever-increasing divide between our rich and poor is
unacceptable. It is our responsibility to narrow the gap between the first and second
economy.
We cannot speak of reducing poverty and unemployment and creating jobs and a better
life for all if we do not narrow this gap. In narrowing the gap, we must create the
environment and opportunities for our people trapped in the poverty of the second
economy, to actively engage in economic life and to become equal partners in the 1st
economy. Our Black Economic Empowerment initiatives must become more broad based.
Our SMME’s must be supported and capacitated to become serious players in the economy.
There must be a tangible improvement in the lives of our most marginalized sectors such as
women and people with disabilities.
Comrade Speaker, we reiterate our understanding that one of the main causes of poverty is
economic deprivation. As we state in our Growth and Development Strategy (GDS), our
view is that the provision of social infrastructure and services is vital to improving the
quality of life of people, but the lack thereof is a manifestation, rather than a cause, of
poverty. The existence of a school and the right to education, in and of itself, will not
automatically take people out of poverty. The existence of health care facilities itself, will
not automatically take people out of poverty. The provision of social grants, itself, does not
automatically take people out of poverty.
In providing education, health care and social grants we are contributing to building a
skilled, healthy and nourished population, but who will not be able to sustain this in an
independent and dignified manner if they remain unemployed, and if we do not provide
the opportunities for them to be actively engaged in the economy. Thus we must remember,
that the challenges relating to the 2nd economy go beyond just provision of social
2005/06 - Budget Speech
7
infrastructure and services. We must ensure that we intrinsically link issues between the first
and second economy. We must be mindful that our growth and development strategies do
not inadvertently create an unhealthy distinction between the “two economies”, and
increase even more the divide between the rich and poor.
It is important that we move beyond the boundaries of our Province and our country and
that we acknowledge the role of GPG and the Province as a whole in the effective
rejuvenation of our Continent, and the implementation of NEPAD. Gauteng is classified as
Africa’s 4th largest economy (after South Africa, Egypt and Algeria) and as the economic
hub of the sub-continent. As such Gauteng is a major determinant and contributor of
economic and social development in the Continent. NEPAD’s objectives in respect of poverty
reduction, sustainable growth and development, beneficial integration into the global
economy and inclusion of particularly marginalized sectors of society such as women,
people with disabilities, etc correlate with the objectives and approach of our GDS. As such
our GDS identifies strategic levers that GPG will engage to ensure that we contribute to the
implementation of NEPAD.
Comrade Speaker, it is against this background and with these imperatives in mind, that we
must accelerate the pace of change in the second decade of our democracy.
THE PROVINCIAL BUDGET FRAMEWORK
After the successful democratic elections of last year, we presented to this House, an
adjustment budget, with revenue estimates adjusted upwards to R31.3 billion. Expenditure
likewise increased from R29.6 to R31.2 billion. We did so because we wanted to ensure
that the priorities GPG had set in order to meet the needs of our people, are adequately
resourced.
When taking office for the 3rd time in our democratic history, we made a pact with our
people, that, in partnership with them, we will reduce poverty and unemployment and
create jobs. We committed ourselves to ensuring high levels of economic growth, and
increased socio-economic development.
Through the resources we provided last year, we started laying the foundation for
constructing our Province’s vision as outlined in its five year strategic plan.
Before I provide you with figures on what revenue GPG will have for the 2005/2006
financial year, and before I provide you with details on how GPG will be allocating this
revenue, I wish to restate the fundamental paradigm that underlines GPG’s budget.
This paradigm is that provincial resource allocations are informed by political and
provincial strategic priorities, and not vice versa. Today, we commit ourselves to ensuring
that all Provincial Treasury decisions are informed by, and reflective of the political
priorities of the Province. We will do so, within national and provincial guidelines and
frameworks related to sound financial management.
Thus, the budget that we are presenting today, and will do so in the future for the duration
of our term, is a budget that has been informed by the political priorities identified by
Gauteng Provincial Government. These priorities are:
1. Enable faster economic growth and job creation
8
Budget Speech - 2005/06
2. Fighting poverty and building safe, secure and sustainable communities
3. Fostering healthy, skilled and productive people
4. Deepening democracy and nation building and realizing the constitutional rights of our
people
5. Building an effective and caring government
Furthermore, these provincial priorities contribute directly to our country’s national goal of
growing the economy and reducing poverty and unemployment. As such our budget, like
the national budget presented by Minister Trevor Manuel on the 23rd February 2005,
makes allowances for increases and allocations towards meeting our national and
provincial priorities for economic and social development.
In November last year, we unveiled our provincial Growth and Development Strategy
(GDS), at a multi-stakeholder summit. The final GDS, incorporating feedback from the
Summit will be officially launched by the Premier later this month. The GDS, which applies
to all sectors of society reflects the socio-economic development targets the Province has to
reach by 2014. These proposed 10 year targets will be achieved incrementally, starting
this year. GPG’s budget for 2005/6 reflects the contribution that government will be
making this year to meeting these GDS targets.
Briefly, by 2014, we intend to:
• increase economic growth in the Province to 8%
• reduce the unemployment rate by half, from 28% to 14 %
• create approximately 800 000 jobs thereby reducing the figure of 1,7 million
unemployed people by 50%
• double our labour absorption rate from 45% to 90%
• increase our human resource capital of skilled people by providing focused skills
development and training to 100 000 people
• provide schooling to at least 50% more of the 504 619 learners who currently have no
schooling at all
• reduce the housing shortage by 50%, from 23.9% to 12%
• ensure 100% access to, and provision of water, energy, communication and sanitation
• ensure that at least 7,9% of our 15.8% population who currently do not have regular
refuse removal services, receive them
• provide measurable support to at least 30 000 SMMEs
• set aside 60% to 70% of our procurement spend to support broad based BEE
• establish at least 10 twinning agreements and partnerships with countries in our
Continent within the context of NEPAD.
PROVINICAL REVENUE AND EXPENDITURE
Comrade Premier, Comrade Speaker; MEC’s, Honourable Members and most importantly,
the people of Gauteng – the Gauteng Provincial Government will be tabling a budget with
revenue estimated at R33.5 billion for the 2005/6 financial year, towards achieving these
goals and priorities. Approximately R1,5 billion of this total revenue can be attributed to
provincial own revenue. The total revenue has increased by R2, 2 billion (7%) from last
year. The increase is a tangible indication of GPG’s commitment to creating a better life for
all our people in our Province. Expenditure is estimated at R33,4 billion for the 2005/06
financial year.
2005/06 - Budget Speech
9
As part of achieving our provincial priorities and the 2014 GDS targets, we will be
allocating R6 billion over the MTEF for the implementation of the following provincial
strategic projects:
• Creation of the Provincial Government Precinct
• E-Governance and the creation of a Single Access Point to government services for all
citizens
• Implementation of the Gautrain Rapid Rail Link
• Projects arising out of the GDS, particularly socio-economic infrastructure projects.
• Road Safety Plan
• 2010 Soccer World Cup.
Approximately 81% of our Budget will be allocated to social services; namely health,
education and social development. This will allow us to reduce poverty and improve the
quality of life of the poorest in our Province.
Capital Expenditure (CAPEX) for this financial year amounts to R4.1 billion. We will
increase CAPEX to R5.9 billion in 2006 and R6.6 billion in 2007. CAPEX over the MTEF
will total an estimated R17 billion.
I hope that our partners in the GDS will come on board to match us in investing in our
economy, to increase the level of employment and reduce the high levels of poverty in our
Province.
“The doors of learning and culture shall be opened”.
Chapter two of our Constitution says “everyone has the right to a basic education;
Everyone has the right to use the language and participate in the cultural life of their
choice, freedom of artistic creativity.
GPG’s priorities says we will “fight poverty and build safe, secure and sustainable
communities; foster healthy, skilled and productive people and deepen democracy, nation
building and realize the constitutional rights of our people.
It is an undisputed fact that education is the foundation of all development, both personal
and in society at large. Education offers opportunities for engaging in the economy, and
for participating in social life as an equal. The ability of any country to sustain and
enhance its economic growth and social services is determined by its ability to harness and
gear its human resource capacity and skills to meet the needs of the economy. General,
higher and tertiary education are integrally linked and have to be addressed as such.
There has been significant improvement in our provision of education to learners and in
2001, only 8.4% or 504 619 of our people were identified as having no schooling.
However, we remain with challenges, such as promoting literacy and numeracy, improving
learner support materials and increasing the provision thereof, particularly to public
ordinary schools; roll-out of the Education Management Information System (EMIS) to
enhance public sector management and performance reporting; construction and
maintenance of schools and increasing early childhood development services.
10
Budget Speech - 2005/06
In order to meet these challenges, we are allocating an amount of R10,3 billion to
education. By doing so, we are increasing spending on education by 3%, from R10,027
billion in 2004 to R10,3 billion in 2005. Additional resources allocated to the Education
Department will assist in the provision of extra classrooms required to cater for the
increasing number of learners in public schools and contribute to improved salaries of
teachers. An amount of R100 million of the Education budget is earmarked for the
implementation of Gauteng Online to fast track provision of computers to all public schools
in Gauteng.
Sports, Recreation, Arts and Culture are critical in terms of nation-building, uniting our
people, creating a sense of well-being and inclusion and in promoting safe, secure and
sustainable community life.
Thus we are allocating an amount of R 148 million to our Department of Sports, Recreation,
Arts and Culture for the 2005/6 financial year to begin the process of promoting Gauteng
as the home of champions of major sports, arts and cultural events; the development of
young sporting and artistic talent; safe, secure and sustainable communities and
deepening democracy. An additional R10 million is made available to the department to
start with plans for the 2010 Soccer World Cup.
Comrade Speaker, the Freedom Charter says “All shall be equal before the Law; All shall
enjoy human rights; There shall be work and security and There shall be houses, security
and comfort”
Chapter two of our Constitution says “Everyone is equal before the law; Everyone has
inherent dignity; Everyone has the right to freedom and security of person; No one may be
deprived of property; Everyone has the right to have access to adequate housing; Everyone
has the right to have access to health care services, sufficient food and water and social
security and Every child has the right to family care or parental care”
GPG priorities say that we will “Fight poverty and build safe, secure and sustainable
communities; foster healthy, skilled and productive people and deepen democracy and
nation building and realize the constitutional rights of our people.
Thus, Comrade Speaker, we will be allocating an amount of R9.2 billion for health; R7.5
billion for social development, R1.6 billion for housing; R1.4 billion for public transport,
roads and works and R182 million for community safety.
Access to health care remains one of our most important priorities. Since 1994 we have
continued to expand access to health services by the majority of our population. Through
our primary health care approach, we began providing health care facilities and services
in areas previously neglected by the apartheid regime. Today many of our people enjoy
access to health care services, particularly women, children and people with disabilities.
The R9.2 billion we will be allocating to our Department of Health will be used, amongst
other challenges; towards improving management of hospitals; construction, maintenance
and revitalization of our public health facilities, addressing communicable diseases such as
tuberculosis, consolidating primary health care services and implementing an effective
HIV/Aids prevention campaign and comprehensive HIV/Aids care and treatment
programme.
2005/06 - Budget Speech
11
The health budget increases by 4% from R8.9 billion in 2004/5 to R9.2 billion in 2005/6.
Additional resources have been made available to enable the Health Department to fulfill its
responsibility for primary health services formerly provided by non-metropolitan
municipalities.
Our commitment to reducing poverty by half in 2014, has compelled us to continue to pay
special attention to those who fall out of the safety net. We will continue to ensure that all
those who qualify for grants receive them. This includes people with disabilities, the elderly
and children.
The R7,541 billion that we are allocating to the Department of Social Development will be
used towards, amongst other things, the funding of social security grants payments. This
funding will benefit the elderly, war veterans, the disabled and children in foster care and
will also ensure effective social grant administration and implementation of an Integrated
Social Development Grant, including the food emergency relief grant.
The social development budget increases by 19% from R6.3 billion in 2004/5 to R7.5
billion in 2005/6. The increase will assist us to address the pressure brought to bear by
the ever increasing numbers of social grant beneficiaries, particularly children who require
child support grants. On the other hand we are continuing with our efforts to ensure that
those who receive grants fraudulently are thrown out of our system.
As a result of increased in-migration, Gauteng’s housing backlog continues to grow. GPG’s
strategic approach is to ensure rapid land release and to provide mixed tenure in mixed
income communities to ensure sustainable human settlement.
In particular, government will focus on providing housing on well located land, and
eradicating urban sprawl caused by the provision of housing in the periphery of towns.
We will continue with our urban regeneration efforts in Alexandra, Evaton and Bekkersdal
townships. Housing provision in Kliptown will be accelerated.
The amount of R1,6 billion that we are allocating to the Housing Department for this year
will be used towards addressing, amongst others, issues related to delivery of low cost
housing; formalising existing informal settlements; continuing with urban regeneration and
hostel conversion programmes; ensuring provision of basic services and infrastructure;
social infrastructure to accompany housing provision in twenty old townships and the
transfer of old housing units owned by government, to poor people who qualify.
The housing budget increases by 14%, from R1.4 billion in 2004/5 to R1.6 billion for
2005/6. This increased allocation includes an amount of R168 million for the Alexandra
Renewal Project. The Human Settlement and Redevelopment Grant will fund projects aimed
at improving the quality of the environment in urban communities.
The majority of Gauteng’s population is still not mobile and/or have no direct access to
reliable and affordable public transport. The main impact of persistently inadequate
transport and socio-economic infrastructure development on the quality of lives of our
people is that they are excluded from social and economic life and thus are subjected to
poverty and unemployment.
12
Budget Speech - 2005/06
Transport and Public Works and its socio-economic infrastructure development programmes
are critical to addressing these issues. The Expanded Public Works Programme (EPWP) is
critical to addressing the issue of socio-economic infrastructure. Socio-economic
infrastructure development should include transport related infrastructure development.
The allocation of R1,4 billion to the Department of Public Transport, Roads and Works, for
this year, will be used towards, amongst others, providing accessible, affordable, reliable,
integrated and environmentally sustainable public transport system; supporting economic
growth and investments through the provision of appropriate transport systems and socioeconomic
infrastructure and implementing the Expanded Public Works Programmes in a
manner that optimizes employment and addresses economic and social needs of the poor.
High levels of crime erode confidence, undermine our sense of security and well-being and
have a negative impact on the socio-economic development goals. Similarly, high rates of
motor accident injuries and fatalities have deleterious psycho-social consequences for
families and communities and impose huge financial problems on the health sector.
Reducing crime and increasing road safety therefore requires a comprehensive integrated
response by the department of Community Safety, other provincial departments, local
government, social partners and other law enforcement agencies.
The R182 million that we are allocating to the Community Safety Department for this year,
will be used towards, amongst other issues, reducing crime through monitoring and
supporting SAPS, improving crime prevention and community-police relations;
implementing social crime prevention programmes; strengthening Community Police Forums
and effective traffic law enforcement.
The Community safety budget increases by 12%, from R162 million in 2004/5 to R182
million for 2005/6. An amount of R20 million of the Community Safety budget will be
used for Road Safety Projects in order to reduce the high levels of fatalities on our roads.
“The people shall share in the country’s wealth and there shall be work and security”
Chapter two of our Constitution says “no one may be subjected to slavery, servitude or
forced labour; every citizen has the right to choose their trade, occupation or profession
freely and everyone has the right to fair labour practices.
GPG priorities say that we will “Enable faster economic growth and job creation; fight
poverty and building safe, secure and sustainable communities and foster healthy, skilled
and productive people.
In order to enable faster economic growth, GPG will prioritise resources to fund socioeconomic
projects that promote domestic investments and attract foreign direct investments
(FDI).
We will continue to promote investments in strategic sectors of our economy as outlined in
our Growth and Development Strategy. Investments, particularly in relation to infrastructure
development, will be directed towards targeted geographic/special areas. We will
continue with implementation of Blue IQ Projects and where necessary begin the process of
commercialization of these projects.
2005/06 - Budget Speech
13
We will broaden wealth creation, play a strategic role as a procurer of goods and services
to promote the policy of Broad Based Black Economic Empowerment (BB BEE) and support
for Small, Medium and Micro Enterprises (SMMEs).
Greater efforts will be pursued to position Gauteng as a major tourist attraction in Africa
and an attractive destination for International Film Production.
An amount of R1,6 billion that we are allocating to the Department of Finance and
Economic Affairs, for this year will be used towards; amongst other things, facilitating,
enhancing and increasing domestic and foreign direct investments in infrastructure, other
local development initiatives in targeted zones; increasing tourism and film production in
Gauteng; ensuring and promoting development and sustainability of Broad Based Black
Economic Empowerment , SMME’s and co-operatives in the Province; ensuring sound
financial management in the Province and increasing provincial revenue and initiate new
sources of own revenue.
The Finance and Economic Affairs budget increases by 43% from R1.1 billion in 2004/5 to
R1.6 billion for 2005/6. These resources will be allocated to fund programmes of our
agencies including special projects such as Dinokeng Big Five Game Reserve, Cradle of
Humankind (World Heritage Site), the Government Precinct, Gautrain and the SMME
Agency. Of this amount, R900 million will be allocated this year to start implementation of
the Gautrain project.
Over the MTEF an estimated amount of R300 million will be allocated to the SMME Agency
in order to provide support to small, medium and micro enterprises. The tax relief for
SMME’s announced last week by Minister Manuel will help boost growth in this sector.
“The land shall be shared amongst those who work it”.
Chapter two of our Constitution says “everyone has the right to an environment that is not
harmful to their health or wellbeing and that we will promote conservation and secure
ecologically sustainable development and use of natural resources while promoting
justifiable economic and social development.
GPG priorities say that we will “Fight poverty, build safe, secure and sustainable
communities, deepen democracy and nation building and realize the constitutional rights of
our people.
The responsibilities of the Department of Agriculture, Conservation and Environment are
primarily focused on natural resource management in the context of the protection and
conservation of our province’s non-renewable resource base. The protection and
sustainable use of our finite natural resources is a critical component of continued economic
growth and the creation of a safe and healthy living environment and meeting of basic
needs. Sustainable development must meet the needs of the poor in the present but at the
same time be environmentally sustainable to ensure that survival is not compromised.
The R229 million that we have allocated to the Department of Agriculture, Conservation
and Environment for this year will be used towards, amongst others, implementing an
integrated food security strategy, promote and support local food production and
14
Budget Speech - 2005/06
agriculture; optimising the contribution of sustainable agriculture towards the equitable
development of all communities; development of black farmers; promoting the sustainable
utilization and conservation of bio-diversity and natural processes for the development of
all communities.
The Agriculture, Conservation and Environment budget increases by 11%, from R206
million in 2004/5 to R229 million for 2005/6.
“The People shall govern”.
Chapter three of our Constitution deals with issues related to co-operative governance
amongst our three spheres of government and Chapter ten deals with issues related to
Public Administration.
GPG priorities say that we will build an effective and caring government.
Local government is essentially the implementation sphere of our system of government.
Provision of basic social services such as water and refuse removal, are the responsibility of
local government.
The system of local government includes ward committees to ensure community
participation and participatory democracy in the true sense of the word. Local government
is at the coal face of poverty and the socio-economic needs of the poor. As such it is
critical for municipalities to function effectively and efficiently.
We have allocated an amount of R107 million to the Department of Local Government for
this year, to support and strengthen the capacity of municipalities to develop their IDPs;
monitor and support local government to ensure its transformation and strengthen its
capacity to service the people; appoint community development workers and monitor and
evaluate municipal performance and service delivery.
The Premier’s office serves as the political nerve centre to ensure government excels in
fulfilling its mandate. The Premier’s Office has to be innovative, responsive and dynamic in
providing strategic support to the Premier and the Executive Council.
We have allocated an amount of R105 million to the Premier’s Office for this year, to
continue facilitating the setting of clear provincial priorities; fostering strong intergovernmental
relations; building strong partnerships with civil society stakeholders and
providing strategic support to the Premier and the Executive Council.
The budget for the Premier’s Office increases by 3% from R99.3 million for 2004/5 to
R105 million for 2005/6.
To enable Honourable members of the House to perform effective oversight on the work of
the Executive, and to ensure and promote public participation, we need to ensure that the
Legislature is adequately resourced.
We are allocating an amount of R113 million for this financial year. We are increasing the
budget by 15% from R98 million in 2004/5 to R113 million for 2005/6.
2005/06 - Budget Speech
15
Increased resources will be utilized to provide additional facilities for members, increase
allocations for constituency work and for public participation.
Gauteng’s Shared Services Centre (GSSC) was established to ensure integrated and holistic
administrative and operational support to GPG government departments in respect of
human resource management, internal audit and information technology; procurement and
financial services.
We have allocated an amount of R585 million towards the effective functioning of the
GSSC. This allocation increases by 22,8% from R 476,4 million in 2004/2005. This will
increase the efficiency of providing back office support to GPG departments and includes
an amount of R48 million to finalise and implement the e-governance strategy.
PROVINCIAL REVENUE OUTLOOK
We will be increasing our revenue estimates to R37 billion for the 2006/7 financial year
and to R40,1 billion for the 2007/08 financial year. These increases will include transfers
from national and increased provincial own revenue. The increases are intended to
incrementally provide the resources required to meet our priorities and goals.
In terms of the constitution and our system of governance, Provinces have limited revenue
raising powers. The bulk of our Provincial Budget therefore comprises national transfers. In
order to achieve our provincial priorities and the GDS targets we have set for the province
for 2014, it is clear that national transfers are insufficient for the socio-economic needs of
the Province.
It is thus important that within our Constitutional Framework we develop a strategy and
approach for initiating and increasing our provincial sources of revenue. Additional
revenue generated through provincial initiatives will be used specifically for socio-economic
development, reducing poverty and unemployment.
Comrade Speaker, in line with the provisions of the Provincial Tax regulations Process Act
(Act No.33 of 2001), we will this year, table proposals to the Legislature to introduce a new
provincial tax.
Once the proposals are finalized by the Executive Council, they will be forwarded to the
Minister of Finance for approval. Implementation is planned to start in the financial year
2006/07.
This is in line with the recommendations of the Finance and Fiscal Commission that
Provinces be encouraged to raise more own revenue.
We will continue to improve our other collection and revenue generating initiatives and
activities such as motor vehicle license fees; patient fees; gambling and betting taxes; sale
of goods and services other than capital assets, interest, dividends and rent on land. The
awarding of the 6th gambling license and the introduction of limited payout machines
(LPMS) will increase revenue collection from gambling taxes.
16
Budget Speech - 2005/06
CONCLUSION
In ending my budget presentation today, I wish to thank all in our Province who have
contributed thus far to our socio-economic successes and call on them to continue this active
contribution and support.
I am confident, Comrade Speaker, that our elected representatives and our public servants
will strive to ensure that we expend our financial resources prudently and effectively. I am
equally confident that our people in our Province will monitor, assist and support us to
ensure that we use our resources for the purposes we have provided today.
I wish to thank the Premier for his firm and decisive leadership in ensuring that we deliver
on our objectives, my colleagues in the Executive Council for their collective wisdom in the
process of formulating this Budget; Members of the Finance committees, HOD’s, government
officials and Treasury who worked hard to produce the documents before the House today.
Lastly but not least I wish to thank family and friends for their continued support.
Comrade Speaker, I now table the following documents for consideration by the House:
• Budget Statement 2005/2006 (Estimates of Revenue and Expenditure)
• Appropriation Bill G001/2005
• Explanatory Memorandum to the Bill
• Budget Booklet 2005/2006
• Budget Speech 2005/2006
Thank you very much!
Keya Leboga!