1. Budget Vote Presentation
National Treasury
Budget Vote Presentation
1 June 2004

3. Towards a Ten Year Review
Economic consolidation
Sustained, steady growth
Lower inflation, interest rates
Well-diversified financial markets
Healthy public finances
Favourable trade and industrial environment
Implementation of RDP – 10 year review
Meeting basic needs
Growing the economy
Democratising the state and society
Developing human resources

4. 10 Years of Growth 1984-1993 1994-2003 Growth around 3% a year
Investment expands 4,7% a year
Inflation down to <6%
Deficit down to around 3%
Fin account, net inflows of R169,6 bn
Unprecedented ratings upgrades
Growth of 1% a year
Investment shrinks 2,9% a year
Inflation averages 14,3%
Deficit up to 7,2% in 1993
Fin account net outflows of R46,1 bn
Investment boycott

5. Major Social and Economic Challenges Ahead
Reducing poverty
Halving unemployment rate by 2014
Particularly among youth
Countering vulnerability
Narrowing inequalities
Nation-building
Culture of ‘ploughing back, not plundering’
Bridging ‘two economies’ divide

6. Priority Framework
Increasing investment in infrastructure, industrial capital (16 to 25% of GDP)
Improving education, training and skills development to raise productivity
Fighting poverty and inequality through work opportunities, income support and empowerment
Improved regulation of markets and public entities, and efficient public service delivery

7. New Roles For Treasury
Greater focus on policy coordination within government
Joint planning needed with key departments
Strengthen engagement with private sector, NEDLAC
More proactive, forward-looking
Greater scope and reach of policy
Expertise-intensive, knowledge-based
Relies on healthy relations with other departments, provinces and municipalities

8. Strategic Priorities 2004-2007
Accelerate growth and enhance social development
Strengthen job creation and poverty alleviation initiatives
Deepen budget reform agenda and enhance transparency
Sharper focus on financial management reforms and accountability
Procurement reform
Efficient debt and financial asset management
Review of division of revenue
Strengthen relations with multilateral orgs., e.g. IMF; World Bank; NEPAD; SADC and AU

9. Accelerate Growth and Enhanced Social Development
Formulating growth-enhancing macro policies that contribute towards investment and job creation
Maintaining a sound, growth oriented fiscal stance
Supporting step-up in national, provincial and municipal infrastructure investment
Partly through PPPs
Further progress in liberalising exchange controls
Ongoing tax policy reform

10. Strengthen Job Creation and Poverty Alleviation Initiatives
Expanding sectoral policy capacity and monitoring service delivery progress
Increasing resources to provincial and local government to extend coverage and improve quality of basic and social services
Strengthening provincial and local government planning, budgeting, financial management and delivery capacity

11. Deepen Budget Reform Agenda and Enhance Transparency
Increase oversight into spending and service delivery
Improve use of measurable objectives
Incorporate non-business public entities into budget process
Greater attention to long-term expenditure drivers
Strategic planning over five years

12. Sharper Focus on Financial Management Reforms and Accountability
Review success of PFMA implementation
Improve financial governance especially over public entities
Future reforms to focus on improved outputs and performance accountability
Introduction of standard chart of accounts and new economic reporting format
Roll out of MFMA

13. Procurement Reform
Roll-out of the implementation of supply chain management practices
Aligning the PPPFA Regulations with the principles of the BBBEE
Prescribe minimum norms and standards for supply chain management
Facilitate transversal contracts on behalf of Government
Extending the principles of supply management to the local sphere of government

14. Efficient Debt and Financial Asset Management
Continuing to focus on debt cost reduction
Continuing diversification of funding instruments
Broadening investor base in government debt
Pursuing international credit rating upgrades
Reducing the realised losses on the Gold and Foreign Exchange Contingency Reserve Account
Improving cash management practices
Improving transparency through efficient dissemination of information
Developing on integrated Asset and Liability Management System
Reviewing and implementing risk management framework
Undertaking corporate governance review of state owned enterprises

15. Review of Division of Revenue
Review local government fiscal framework
Review provincial and local government equitable share formulae
Review infrastructure grant formulae
Probe provincial and municipal tax powers

16. Strengthen Relations With Multilateral Organisations
Give economic content to NEPAD and AU programmes
Increase economic integration within SADC
Improve role in international financial institutions – IMF/World Bank; Global Stability Fund etc – set Africa’s development agenda
Minister chosen to serve on Commission for Africa – Treasury to play key support role

17. Organisational Overview
New DG appointed
Approved posts 850; 485 Filled
Restructuring completed
Excess staff 19 and vacant posts 365
Strategic Planning conference in July/August
Continuous improvement of financial manual
Consolidating parliamentary services
Continuing implementation of affirmative action and employment equity practices

18. Staff Profile as at 31 March 2004
Employees below Management
Management
GENDER
GENDER
RACE
RACE

19. Estimate of Expenditure
Operational Budget
Programme VOTED BUDGET Increase/
Decrease
2003/ /05
R’ R’ %
1. Administration
2. Economic planning and budget
management
3. Asset and Liability Management
4. Financial management and
systems
5. Financial accounting and reporting
TOTAL OPERATIONAL BUDGET

20. Estimates of Expenditure
Transfers
VOTED BUDGET Increase/
Decrease
2003/ /05
R’ R’ %
Operational budget
6. Provincial and local government
transfers
7. Civil and Military Pensions,
Contributions to Funds and
Other benefits
8. Fiscal transfers
TOTAL BUDGET

21. Fiscal Transfers Programme 8 Voted Budget MTEF MTEF
2003/ / / /07
R’ R’ R’ R’000
International transfers
Lesotho and Namibia
Contribution to HIPC
African Development Bank
SA Revenue Service
Development Bank of SA
World Bank Group
Financial and Fiscal
Commission
Secret Services
Financial Intelligence Centre
Commonwealth Fund
TOTAL FISCAL TRANSFERS
National Treasury

22. THANK YOU .