1. Gauteng Provincial Treasury Gauteng Provincial Government Finances 1

2. Table of Contents 1.Provincial Growth and Development Strategy 2.Gauteng’s Demographics 3.Gauteng’s Macroeconomic Indicators 4.Fiscal Sustainability 5.2014/15 Provincial Expenditure – GPG cash position – Own revenue collected – Summary of GPG financial performance Overall GPG financial performance Provincial Wage Bill issues Provincial performance on conditional grants Infrastructure Spending – Conclusion 2

3. 1.Provincial Growth and Development Strategy 3 Gauteng has determined its new priorities within the context of transformation, modernisation and re-industrialisation which resulted in the Ten Pillar Programme. Pillar 1: Radical economic transformation Pillar 2: Decisive spatial transformation Pillar 3: Accelerated social transformation Pillar 4: Transformation of the state and governance Pillar 5: Modernisation of the public service Pillar 6: Modernisation of the economy Pillar 7: Modernisation of human settlements and urban development Pillar 8: Modernisation of public transport infrastructure Pillar 9: Re-industrialisation of Gauteng province Pillar 10: Taking the lead in Africa’s new industrial revolution

4. TEN PILLAR PROGRAMME Pillar 1: Radical economic transformation Township Economy Revitalisation. Support for the SMMEs and Cooperative. Township Economy Strategy approved by EXCO in January 2015. Township SMMEs and Cooperatives support Expansion and transformation of key economic sectors Public employment programmes Youth economic participation Pillar 2: Decisive Spatial Transformation Strategic oversight and support to identified catalytic projects GCR-Wide human settlement planning in line with GSDF Planned and integrated urban development Improved integration of environmental aspects into land-use planning Planned and integrated urban development 4

5. TEN PILLAR PROGRAMME Pillar 3: Accelerated Social Transformation School Infrastructure ICT in Education Social cohesion Strengthening Health Systems and NHI Rollout Social Determinants of Health Prevention and Reduction of the Burden of Disease Reforming the welfare sector Combating substance abuse & gender-based violence Pillar 4: Transformation of the State and Gov. Improving the capacity of the state Reduction and Eradication of Fraud and Corruption Pillar 5: Modernisation of the Public Service Implementing e-Governance and harness ICT 5

6. TEN PILLAR PROGRAMME Pillar 6: Modernisation of economy Smart Economy Green Economy Pillar 7: Modernization of Human Settlement Human Settlements Turnaround Plan Universal access to basic services Integrated Urban and Spatial Development Pillar 8: Modernisation of public transport Strategic Transport Infrastructure Pillar 9: Reindustrialisation of Gauteng Agro-processing Partnership with state-owned enterprises Pillar 10: Taking the lead in Africa’s new industrial revolution Strengthen intra-African trade and investment Partnerships with BRICS countries 6

7. 2.Socio Economic Indicators of Gauteng Gauteng’s population grew by 3.6% per annum from 10.5m in 2009 to 12.9m in 2014 – an increase of 2.4m (22.6% increase) Number of households increased from 3.8m in 2009 to 4.2m in 2014 Average household size is 3.1 people Females number 6.4m while males are 6.5m About half of the population is under the age of 30 years 67.5% have secondary education, 20.8% have tertiary education, 9.6% have primary education and 2% have no schooling 7

8. 3. GAUTENG ECONOMIC OUTLOOK 8 The Gauteng province contributes more than a third of SA GDP, accounting for 36% of SA GDP in 2012 The forecast predicts a gradual increase of the share to 36.1% of GDP by 2017. The large share of the economy held by Gauteng is due in large part to the finance and business services sub-sector and administrative arm of government

9. 3. GAUTENG ECONOMIC OUTLOOK 9 2013 Gross Domestic Product – Region (GDP-R)

10. 3. GAUTENG ECONOMIC OUTLOOK The largest sector contributing to GDP-R is the finance, insurance, real estate and business services sector This sector is a good indication of the flow of foreign direct investment. However each unit of GDP-R added by this sector makes a lower contribution to employment than the other sectors Given the knowledge-intensive nature of this sector, it also has limited scope for absorbing less skilled staff Therefore, more investment should be directed to other sectors like manufacturing, wholesale and retail trade and transport 10

11. 4.Fiscal Sustainability 11 Summary of Provincial Receipts2015/162016/172017/18 R'000 Transfer receipts from national Equitable Share 73,413,414 78,236,773 83,601,741 Conditional Grants 17,123,410 18,947,908 20,474,958 Total Transfer receipts from national 90,536,824 97,184,681 104,076,699 Provincial own receipts 4,584,695 4,831,816 5,072,472 Total Provincial Receipts 95,121,519 102,016,497 109,149,171

12. Provincial Revenue for 2015MTEF 12 Provincial Own Receipts2015/162016/172017/18 R'000 Tax receipts Casino taxes 706,204 743,633 780,814 Horse racing taxes 97,813 102,997 108,147 Liquor licences - - - Motor vehicle licences 2,987,393 3,142,737 3,299,874 Total tax receipts 3,791,410 3,989,367 4,188,835 Sales of goods and services other than capital assets 652,239 686,878 720,481 Fines, penalties and forfeits 10,492 11,047 11,599 Interest, dividends and rent on land 92,011 104,222 109,431 Transactions in financial assets and liabilities 38,543 40,302 42,126 Total Provincial own receipts 4,584,695 4,831,816 5,072,472

13. 4.Fiscal Sustainability Provincial government is highly dependent on National transfers in the form of PES and Conditional grants National transfers makes up to 95% of the provincial resources. Provincial Fiscal sustainability is correlated to what happens to the National fiscal framework. In an environment of limited revenues being collected at a national level this will also affect transfers to the provinces. Currently provinces have to do with less resources as a results of fiscal cuts – Gauteng has managed to have a soft landing on this as a results of prudent financial management The biggest risks lies on how the provinces will be funded on the wage settlement which have been agreed upon recently. 13

14. 5.Gauteng Provincial Government Expenditure – 2014/15 1.2014/15 Provincial Expenditure – GPG cash position – Revenue Collection – Summary of GPG financial performance Overall GPG financial performance Provincial Wage Bill issues Provincial performance on conditional grants Infrastructure Spending – Conclusion 14

15. Provincial Cash Flow Position Total provincial receipts amounted to R90.5 billion, of which: – 68.7 billion was equitable shares – R16.9 billion conditional grants, and – R4.9 billion own revenue collection. Total provincial outflow was R89 billion, of which: – R87billion was GPG departmental requisitions, and – R1. 8 billion was direct charges. 15

16. REVENUE COLLECTION Total collection for 2014/15 FY is R5 billion The R4.3 billion target was exceeded by R700 million, or 16 percent GPT contributed R402 million more than its appropriation, due to interest income 16

17. OVERALL GPG FINANCIAL PERFORMANCE 17

18. OVERALL GPG FINANCIAL PERFORMANCE The overall GPG preliminary expenditure is R85.7 billion. GPG recorded overall under expenditure of R1.5 billion. Health; Education; Housing and; Roads and Transport contributed to the under spending. 18

19. OVERALL GPG FINANCIAL PERFORMANCE OVER 3 YEARS 19

20. OVERALL GPG FINANCIAL PERFORMANCE OVER 3 YEARS 20

21. PROVINCIAL WAGE BILL ISSUES 21

22. PROVINCIAL WAGE BILL ISSUES CONT……. GPG as whole appears to have remained with the 2014/15 FY CoE budget. Under spending recorded for DID, DED and DRT. Although GDE and GDoH remained within their overall CoE budgets, they are still facing pressures 22

23. PROVINCIAL PERFORMANCE ON CONDITIONAL GRANTS 23

24. PROVINCIAL PERFORMANCE ON CONDITIONAL GRANTS 24

25. PROVINCIAL PERFORMANCE ON CONDITIONAL GRANTS GPG overall expenditure on conditional grants is R 16.9 billion or 99 percent of the adjusted budget. A total of R167 million remained unspent at the end of financial year. Education (OSD); Health (Compr. HIV/Aids); Housing (HSDG), and Transport (PTOG) contributed to the recorded underspending. 25

26. INFRASTRUCTURE Department 2014/15 Main Budget 2014/15 Adjusted Budget End of Quarter 4 Expenditure Exp. % Pre-Audited Outcome Health1,747,3021,328,4661,340,380101%(11,914) Education1,690,5851,819,8851,760,62997%59,256 Social Development170,341110,041114,736104%(4,695) Human Settlement4,432,2534,578,9074,538,89899%40,009 Roads & Transport1,982,2991,661,584 100%- Agriculture and Rural Development19,45413,45410,81780%2,637 Sports, Recreation, Arts and Culture237,000184,661167,68891%16,973 Infrastructure Development365,967237,261221,68693%15,575 Total10,645,2019,934,2599,816,41899%117,841 26

27. INFRASTRUCTURE CONT…… Infrastructure expenditure is R9.8 billion or 99 percent of the budget. R117.8 million remained unspent. Human Settlements and Education contributed to the underspending. 27

28. Thank You 28