1. DPME presentation to SCOA 2 May 2016
Plan – Budget Alignment Is the government budget resourcing priorities?
DPME presentation to SCOA
2 May 2016

2. Overview The budget and economic transformation
The priorities (NDP ): targets and levers
Alignment 1: Priorities versus broad spending areas
Alignment 2: Making an impact
Progress against targets
Improving alignment - prioritisation
Reallocation (funding priorities)
Improving efficiency
Transformative impact
Removing blockages/searching for synergies & cooperation

3. ECONOMIC EMANCIPATION
Lus
SONA (9/02/17) confirmed role of budget in economic transformation
Unequal & low incomes
TRANSFORM
fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans
Skewed property ownership
ECONOMIC EMANCIPATION
Concentrated Ownership of firms
Levers:
Legislation
Regulations;
Licensing
Budget & procurement;
BBEE Charters
TO ACHIEVE
Domination of white, male management
Jobs & Incomes for
Inclusive Growth
Sub-contract 30%
Criminalising collusion
A united, democratic, non-sexist, non-racial and prosperous South Africa
Competition Act
Empower women
Land market & property registrations
Farmers, land reform & restitution
Black Industrialists Programme
SMMEs & ICT/cost of data
Access to universities
Fight crime & corruption
Mining ownership, state participation & MPRDA
International Relationships & trade 23

4. NDP priorities: targets
NDP (outcome) targets
Intermediate objectives
11 million additional jobs
Prosperity (No poverty)
Jobs & Incomes for
Inclusive Growth
39% to zero
Equality (Reduce inequality)
5.4% per year
Gini from 0.69 to 0.6

5. NDP priorities: Levers (“pillars”) (see p.26)
Strong Economy
Prosperity (No poverty)
Jobs & Incomes for
Inclusive Growth
Citizens with capabilities
Equality (Reduce inequality)
Capable State/ Active Citizens

6. Prosperity (No poverty) Equality (Reduce inequality)
NDP priorities: Levers (“pillars”) & budget function groups
“ECONOMIC SERVICES“ :
Infrastructure (Eco
& household), regulation, support (incentives), skills & PSET
Prosperity (No poverty)
Jobs & Incomes for
Inclusive Growth
ADMINISTRATIVE SERVICES;
Efficient public sector, active citizens; justice
& policing
Equality (Reduce inequality)
SOCIAL SERVICES:
ECD & basic education, health,
social protection; Sport, Culture

7. Alignment? Proportions
Funding Allocation
Levers (NDP pillars)
ECONOMIC SERVICES – Opportunities& cost of business
2017/18
R515 b
33%
GOV & ADMIN SERVICES
- Capable state, active citizens, cost of business/living
R269 b
17%
SOCIAL SERVICES – Capabilities & cost of living
R610 b
39%
Debt Service Cost
R162 b
10%
Reserve
R6 b 0%
TOTAL GOVT SPEND
R1 563 b
100%

8. 33% 17% 39% ECONOMIC SERVICES – Opportunities& cost of business
Function Groups
ECONOMIC SERVICES – Opportunities& cost of business
2017/18
6. Economic Affairs
R215 b
14%
33%
7. Human Settlements & Mun Infras
R196 b
13%
8. Agriculture, Rur Devt & Land Reform
R27 b 2%
2. PSET
R78 b 5%
GOV & ADMIN SERVICES
- Capable state, active citizens, cost of business/living
5. Defence, Public order & Safety
R199 b
13%.
17%
9. General Public Services
R71 b 5%
SOCIAL SERVICES – Capabilities & cost of living
1. Basic Education
R243 b
16%
39%
3. Health
R187 b
12%
4. Social Protection
R180 b.
12%.

9. Change/Trends 2017/18 2019/20 6. Economic Affairs 13.8% 13.4%
R215 b
13.8%
R244 b
13.4%
7. Human Settlements & Mun Infras
R196 b
12.5%
R226 b
12.5%
8. Agriculture, Rur Devt & Land ReF
R27 b
1.7%
R30 b
1.6%
2. PSET
R78 b
R90 b
5.0% 5%
5. Defence, Public order & Safety
R199 b
12.7%.
R225 b
12.4%.
9. General Public Services
R71 b
4.5%
R76 b
4.2%
1. Basic Education
R243 b
15.5%
R280 b
15.4%
3. Health
R187 b
12%
R217 b
12%
4. Social Protection
R180 b.
11.5%.
R209 b.
11.5%.

10. ECONOMIC SERVICES – Opportunities& cost of business
2016/17
2019/20
32.9%
32.6%
GOV & ADMIN SERVICES
- Capable state, active citizens, cost of business/living
17.2%
16.9%
SOCIAL SERVICES – Capabilities & cost of living
39.1%
38.9%

11. Prosperity (No poverty) Equality (Reduce inequality)
Alignment in terms of impact?
Progress 2010 to 2015
Target
2.8 million
Actual
2 million
27%
Prosperity (No poverty)
Jobs & Incomes for
Inclusive Growth ?
0.66
Equality (Reduce inequality) ?
5.5% per year
2.1 % per year

12. Strengthening alignment
Range of budget reforms over last 2 decades to strengthen alignment:
Programme budgets & outcome orientation (PFMAs “measurable objectives”)
Three-year budgets (MTEF) & MTBPS
Ministers Committee on the Budget (MINCOMBUD) & MTEC process
Strong performance in international transparency rankings
Refinement of role of Parliament and Parliamentary Budget Office
Cabinet now taking it forward (2016 Mid-year Lekgotla) and asking for a strong prioritisation process (managed by DPME & National Treasury)
Further distillation of priorities in current context (focus)
Assess allocations against these priorities

13. Prioritisation involves answering 4 questions:
Have we got the right approach or are there key policy decisions required/outstanding?
Road infrastructure and tolling
Broadband allocation and ICT strategy
Are we spending efficiently? Can we save or improve value for money?
Basic education
Universities and skills funding
Procurement
Can we improve the transformative impact of spending
Human settlements and transport subsidies
Are there areas where funding is a inadequate fro what we have to achieve
Post-Secondary education and training - TVET
Health and Early childhood development

14. Thank You