2010 Appropriation Bill Briefing to Select Committee on Appropriations 28 May 2010

Appropriation Bill 2010 Appropriation Bill initially tabled in Parliament at the time of the budget – 17 February 2010 Bill provides for the appropriation of money from the National Revenue Fund in terms of section 213 of the Constitution and section 15 of the PFMA Spending is subject to the PFMA and provisions of the Appropriation Bill

Appropriation Bill cont. Parliament is asked to pass the bill as soon as it is feasible so that the President can assent to it and the Act can be promulgated before the end of July. This is necessary as the financial year has already commenced and departments are incurring expenditure in terms of section 29 of the PFMA which makes provision for spending before an annual budget is passed, –Up to July, expenditure may not exceed 45% of the 2009/10 financial year budget. –After July, monthly expenditure can only amount to 10% of 2009/10 vote budget. Departmental activities may be constrained should there be delays in an Appropriation Act coming into effect

4 Structure of the Bill Bill is divided by vote and by main division within a vote (programmes) An aim is set out for each vote and a purpose is set out for each programme Allocations are divided into: –Current payments Compensation of employees Goods and Services Other –Transfers and subsidies –Payments for capital assets –Payments for financial assets Allocations marked with an asterisk refer to specifically and exclusively appropriated allocations Conditional grants are specifically and exclusively appropriated and are also listed in the Division of Revenue Bill

5 Budget priorities Government has shifted to targeting outcomes in order to increase efficiency and improve performance to support inclusive development There are 12 measurable outcomes Over the next three years, expenditure is channeled towards priority areas: –Improving the quality of education –Upgrading health care –Promoting public safety –Supporting rural development –Creating decent jobs –Building sustainable human settlements –Encouraging efficient local government

6 Savings Fiscal framework made R86.7 billion available over Medium Term Expenditure Framework (MTEF) Savings amounting to R25.6 billion were made available for reallocation Total additions thus amounted to R112.2 billion Savings were mainly found by decreasing spending on non-core goods and services, rescheduling expenditure, lowering overseas payments, reduced transfers to certain public entities, improved financial management and reduced expenditure on administration Major savings amounts: –Defence and Military Veterans, R4.5 billion (A400M military aircraft contract cancelled) –Correctional Services, R4.5 billion (rescheduled prison building plans) –International Relations and Cooperation, R1.5 billion (revised foreign costs and deferred construction of the Pan African Parliament building) –Social Development, R1.2 billion (rationalised social grant payments system)

7 Key spending allocations R6.4 billion (R21 billion over MTEF) for general adjustment to provincial equitable share (incl. for wage increases) R3.6 billion (R12 billion over MTEF) more for compensation of employees adjustments at the national level R1.8 billion (R12.2 billion over MTEF) for social grants R4.1 billion (R14.1 billion over MTEF) for Education and Skills development (incl. occupation-specific dispensation (OSD) for educators) R3.1 billion (R12.4 billion over MTEF) for health care (incl. OSD for health professionals) R1.2 billion (R4.8 billion over MTEF) for justice, crime prevention and policing (incl. OSD for correctional services workers) R1 billion (R2.4 billion over MTEF) to rural development R3.4 billion (R16.4 billion over MTEF) for job creation, infrastructure and the environment R1 billion (R8.9 billion over the MTEF) for human settlements and local government

8 Additional allocations per cluster: Central Government Administration and Financial Services The Presidency –R30 million (R105 million over MTEF) for the Department of Performance Monitoring and Evaluation –R30 million (R110 million over MTEF) to enhance capacity in the office of the President (funding for additional advisors, administrative support, presidential hotline and for the upgrading of information technology) –R20 million (R75 million over MTEF) for the National Planning Commission Parliament –R146 million (R448 million over MTEF) to enhance capacity of the Office of the Speaker, including provision for the establishment of a budget office in terms of the Money Bills Amendment Procedure and Related Matters Act. Also included is provision for increasing the capacity of Parliamentary oversight committees

9 Central Government Administration and Financial Services cont. Cooperative Governance and Traditional Affairs –R2.5 billion in 2012/13 to provide for an increase in the Municipal Infrastructure Grant –R1.2 billion (R8.2 billion over MTEF) to take into account the growing demand for services and rising costs of providing free basic services Home Affairs –R150 million in 2010/11 for the 2011 local government elections International Relations and Cooperation –R24 million (R77 million over MTEF) for new office accommodation Public Works –R567 million (R2.5 billion over MTEF) for phase 2 of the Expanded Public works programme – extension of incentive framework to the Environmental and Culture sectors as well as to the Social sector Women, Children and People with Disabilities –R30 million (R105 million over MTEF) for the new Department

10 Central Government Administration and Financial Services cont. National Treasury –R400 million (R1.1 billion over MTEF) for the Neighbourhood Development Partnership Grant –R750 million in each of the first two years for Land Bank recapitalisation –R200 million in 2012/13 for the South African Revenue Service –R192 million (R401 million over MTEF) to supplement the projected shortfall on the military and civil pensions programme –R262 million in 2012/13 for the Infrastructure Grant to Provinces –R6.4 billion (R21 billion over MTEF) for general adjustment to provincial equitable share (incl. for wage increases) –R50 million (R150 million over MTEF) for Fraud Prevention Measures –R100 million (R315 million over MTEF) for the Infrastructure Development Improvement Programme Statistics South Africa –R100 million in 2011/12 for personnel-related costs associated with the census and survey fieldwork

11 Social Services The bulk of social service spending entails transfers to provinces Basic Education –R3 billion (R9 billion over MTEF) to the Provincial Equitable Share for costs of the revised OSD for Educators –R750 million (R2.7 billion over MTEF) for workbooks –R170 million over MTEF for the Dinaledi schools –R120 million in 2012/13 as an inflation adjustment for the National School Nutrition Programme –R30 million (R96 million over MTEF) for the new office building Health –R1.3 billion (R3.9 billion over MTEF) for OSD for health professionals –R1.7 billion (R8.4 billion over MTEF) for comprehensive HIV and Aids grant –R30 million (R50 million over MTEF) for a mass measles immunisation campaign –R140 million in 2010/11 for the rescheduling of a hospital revitalisation project –R30 million (R130 million over MTEF) for the National Department

12 Social Services cont. Higher Education –R20 million (R90 million over MTEF) for the operations of the newly established Department –R1 billion over MTEF for Higher Education subsidies –R400 million (R2.3 billion over MTEF) for student loans and Further Education and Training colleges to ensure that their programmes keep pace with both inflation and rising student numbers Labour –R30 million (R60 million over MTEF) for the Commission for Conciliation Mediation and Arbitration Social Development –R1.8 billion (R12.2 billion over MTEF) for social grants –R40 million (R70 million over MTEF) for social grants Appeals Tribunal

13 Justice, Crime Prevention and Security Correctional Services –R300 million (R900 million over MTEF) for the OSD for correctional services workers Defence and Military Veterans –R20 million (R80 million over MTEF) to establish an Office for Military Veterans’ Affairs –R50 million (R220 million over MTEF) to expand the Military skills development system –R600 million (R2.2 billion over MTEF) for the new SA National Defence Force remuneration system –R600 million over MTEF for landward defence modernisation –R200 million in 2012/13 for the Strategic Defence Procurement Programme

14 Justice, Crime Prevention and Security Justice and Constitutional Development –R30 million (R180 million over MTEF) for the implementation of Children’s Act, Child Justice Act and Sexual Offences and Related Matters Act –R230 million over MTEF for the construction of new courts –R50 million over MTEF for the appointment of more public defenders Police –R200 million (R680 million over MTEF) for additional policing personnel –R800 million over MTEF for policing priorities

15 Economic Services and Infrastructure Agriculture, Forestry and Fisheries –R200 million over MTEF for the improvement of bio-security services –R170 million over MTEF for manufacturing Foot and Mouth disease vaccines Economic Development –R100 million (R380 million over MTEF) for the establishment of the new department Energy –R20 million (R80 million over MTEF) for the development and implementation of an Energy Modelling System Environmental Affairs –R60 million in 2012/13 for the new building –R65 million (R280 million over MTEF) for the Expanded Public Works Programme Incentive

16 Economic Services and Infrastructure cont. Human Settlements –R1 billion over MTEF for the Human Settlements development grant –R100 million (R1.2 billion over MTEF) for the Rural Households Infrastructure Grant Rural Development and Land Reform –R260 million (R860 million over MTEF) for rural development Science and Technology –R50 million over MTEF for the South African Research Chairs Initiative Trade and Industry –R450 million (R1.8 billion over MTEF) for the automotive production and development programme –R400 million (R1.8 billion over MTEF) for the clothing and textile production incentive –R21 million (R146 million over MTEF) for regulatory institutions such as the Competition Commission –R60 million over MTEF for essential infrastructure projects

17 Economic Services and Infrastructure cont. Transport –R468 million (R2.8 billion over MTEF) for public transport, roads and rail infrastructure Water Affairs –R54 million (R554 million over MTEF) for Regional Bulk Infrastructure –R102 million (R498 million over MTEF) for the Working on Fire and Working for Water programmes

18 THANK YOU

19 Outcome targets and spending plans Improve the quality of education and training –R14.1 billion more for workbooks, annual national assessments, attracting and retaining quality teachers, resources for FET colleges, increasing university subsidies and supporting NASFAS, to: Improve grades 3, 6 and 9 literacy and numeracy scores from less than 38% to 60% Increase Bachelor’s degree qualifiers from to Increase mathematics passes from to Increase science passes from to Increase university, technikon and artisan trade test pass rates from 42% to 50%-70%

20 Outcome targets and spending plans Upgrade health care to increase life expectancy –R12.4 billion extra for Aids and TB treatments, to combat measles and polio, and attract and retain quality health professionals, to: Decrease child deaths from to per live births Increase life expectancy from to 55 years Decrease HIV prevalence among year olds from 10.7% to 5.2% Increase number of Aids patients on treatment from to 2 million Increase successful TB treatment from 65% to 85% of total cases

21 Outcome targets and spending plans Build a safe country –R1 billion more to fight organised crime, appoint more public defenders, family advocates, family counsellors, sexual offences court officers, court clerks and to recruit additional personnel in detective services, crime intelligence and visible policing, to:  Increase contact crime detection rate from 52.5% to 57.5%  Increase trio crime detection rate from 13.8% to 34%  Decrease court case backlogs from to cases  Increase the percentage of contact/trio crimes reported by victims/the public from 48.9% to 60%  Raise Corruption Perception Index Ranking from to within the top 40 countries

22 Outcome targets and spending plans Develop equitable and sustainable rural communities –R2.4 billion extra for comprehensive rural development programme and the Land Bank, to:  Increase number of commercial farm holders from to  Increase percentage of small farmers producing for sale from 4.1% to 10%

23 Outcome targets and spending plans Build a more inclusive economy, create jobs and develop network infrastructure –R10.8 billion extra for the second phase of EPWP, National Roads Agency (coal haulage road network) and construction of fuel pipeline, to:  Increase labour absorption rate from 43 to 45%  Increase GDP per capita from R to R  Achieve GDP growth average of 5% ( )  Decrease level of income inequality, lowering Gini coefficient from 0.66 to 0.59  Increase the share of national income going to the poorest 40% of the population

24 Outcome targets and spending plans Ensure sustainable human settlements –R1 billion more to integrated housing and human settlements development grant, to:  Decrease number of households with inadequate shelter from 1.1 million to  Increase number of new affordable rental units from to a year  Increase number of households with access to basic sanitation from 69 to 100% –R1.2 billion for rural on-site water and sanitation