1. Medium Term Budget Policy Statement Presentation by the Department of Education November 2004

2. Background MTEF Inputs to Treasury 2005/62006/72007/8 NSFASR500mR500mR500m NSNPR270mR330mR550m FET SchoolsR990mR1049mR1112m FET CollegesR1000mR1021mR984m ECDR205mR211mR233m

3. Background 2 MTEF Inputs to Treasury 2005/62006/72007/8 ELSENR2mR74mR74m ABETR55mR130mR100m EMISR100mR109mR219m InfrastructureR1000mR1000mR1000m TOTALR4.172 bR4.424bR4.722b

4. Background 3 Expenditure on education has decreased from 21% of government spending to 17% Education spending has grown in real terms by only 1.3% per annum Funding for Higher Education has increased in real terms by 12% over 8 years, but student numbers have grown from 380 000 to 480 000, or 27%, over the same period.

5. Comments on the MTBPS Provinces have been under severe pressure, with declining shares of the budget, in some cases to below 30% of provincial spending

6. Importance of Education A key instrument in bridging the divide between the first and second economies The only sustainable means of development: increased spending on education should lead to decreases in welfare spending

7. National priorities Education Management Information Systems (EMIS) Further Education and Training – Recapitalisation of FET Colleges – Programme alignment (Schools and Colleges) NSFAS Higher Education restructuring All acknowledged in MTBPS

8. Provincial spending 1 Equitable share formula – Support for new approach to calculation of equitable share (50:50 basis rather than higher weighting for cohort – will encourage enrolment) Need for further reviews with introduction of national poverty quintiles: supporting provinces with largest share of poor learners

9. Provincial spending 2 Welcome statements like: “Increasing investment in further education and training” (p53) “Spending on school infrastructure to be accommodated to eliminate backlogs and improve maintenance” (p68) “The current trajectory of spending on LSM and equipment at around R2,2 billion will be sustained” (p68)

10. Provincial spending 3 Further welcome comments: “With the expanded resource envelope, provinces are able to: – Step up spending on education, including remuneration of educators, key curricular support material, and improved maintenance of infrastructure” (p67) “Strong growth in spending on school infrastructure will be accommodated in order to eliminate backlogs and improve maintenance of school buildings” (p68)

11. Provincial spending 4 Despite strong supporting statements … R33.5 billion added to provincial shares, but – R22.8 b tied up in Conditional Grants,and – R10.7 b to cover salary improvements. Therefore no additional discretionary money in provinces.

12. Provincial spending 5 Concern that education share of provincial budgets drops from 23.1% this year, to 22.1% in 2005, and below 22% for 2006 and 2007. Concern also that whereas Health grows by 8.9% over the MTEF period, and Welfare by 11.2%, Education only grows at 7.3%

13. Teachers Welcome confirmation that provincial Treasuries will be fully compensated for the 2004 salary agreement, including the carry through cost of the backlogs agreement with teachers (R800 million pa) Welcome commitment to provide an additional R5 billion “to address backlogs in pay progression, for career pathing and scarce skills.”

14. Conclusions Allocations do not come near the bid that was made for funds Education recognises the need to balance a variety of competing demands, and compliments the Treasury on the fair allocations in the MTBPS With provinces, we will continue to make the case for more funding on education, as an investment in the country’s future.

15. More conclusions Allocation for EMIS most welcome – will enable us to start to build a robust, real-time, monitoring system, which will enable us to identify, track and promote quality in education.