1 Adjusted Estimates of National Expenditure 2008

2 Components of the Adjustments Budget PFMA, section 30(2), states that the adjustments budget may provide for: a)Significant and unforeseeable economic and financial events affecting the fiscal targets b)Unforeseeable and unavoidable expenditure recommended by a committee of Cabinet c)Any expenditure in terms of section 16 d)Money to be appropriated for expenditure already announced by the Minister during tabling of the annual budget e)The shifting of funds between and within votes f)Utilisation of savings under a main division of a vote to be used to defray over-expenditure on another main division g)Roll-over of unspent funds from the preceding financial year

3 Revised National Budget 2008/09

4 Inflation-related adjustments – s30(2)(a) Compensation of employees National school nutrition programme National student financial aid scheme Learner and teacher support material Medical equipment and medicine costs Housing costs Fuel costs Municipal costs for free basic services due to electricity supply cost increases /09R Millions

5 Criteria for Assessment of Unforeseeable and Unavoidable Expenditure s30(2)(b) The following requests would not be considered as being unforeseeable and unavoidable: Expenditure that although known when finalising the estimates of expenditure, could not be accommodated within allocations Tariff adjustments and price increases Extensions of existing services and the creation of new services that are not unforeseeable and unavoidable Expenditure that could not be anticipated at the time of budget preparation

6 Unforeseeable and Unavoidable Expenditure Request for unforeseeable and unavoidable amounted to R33.2 billion Treasury Committee approved R12.5 billion

7 Unforeseeable and Unavoidable Expenditure cont.

8 R Millions 17Sport and Recreation South Africa1 400 To the 2010 FIFA World Cup Stadium Development Grant Defence100 Additional funds for the extension of the Peace support operation in Burundi Agriculture217 Compensation payable in terms of a court order for cattle culled. 21 To finalise payments in respect of the Classical Swine Fever Combating Campaign. 71 To the Agricultural Disaster Management Grant for veld fires (R40 milllion) and floods (R9 million). 49 To provide agricultural starter packs to vulnerable households to mitigate the impact of high food prices Communications608 For the Universal Services and Access Agency of South Africa (USAASA). 8 For the "last mile" Access Network between the 2010 FIFA World Cup stadium venues and the Telkom National Network Environmental Affairs and Tourism109 For cash flow adjustment for Expanded Public Works Programme (EPWP) projects. 109 Vote and description of expenditure

9 Unforeseeable and Unavoidable Expenditure cont.

10 Supplementary amounts: announced in Budget 2008 – s30(2)(d)

11 Roll-overs – s30(2)(g) Funds appropriated but not spent in the previous financial year rolled over to a subsequent year subject to relevant treasury approval –Unspent funds on payments for capital assets may only be rolled over to finalise projects or assets acquisitions still in progress. –Savings on transfer payments and subsidies may not be rolled over for purposes other than what was originally voted for. –Savings on compensation of employees may not be rolled over. A maximum of five per cent of a department’s payments for good and services may be rolled over. –May not be rolled over for more than one financial year unless approved in advance by the relevant Treasury.

12 Roll-overs cont.

13 Roll-overs cont.

14 Roll-overs cont.

15 Roll-overs cont.

16 Self-Financing Expenditure Expenditure financed from unforeseen revenue take paid into the National Revenue Fund

17 Conclusion Declared savings for 2008/09 total R1.2 billion Projected underspending is R4.3 billion Declared saving and projected underspending total R5.5 billion In-year adjustments result in expenditure level increasing from R611.1 billion to R635.5 billion