2010 Appropriation BillBriefing to Select Committee on

Appropriations

28 May 2010

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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

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2010 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

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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

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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 5 + 2 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

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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)

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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THANK YOU

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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 107 000 to 175 000

• Increase mathematics passes from 136 184 to 250 000• Increase science passes from 148 678 to 171 600• Increase university, technikon and artisan trade test pass

rates from 42% to 50%-70%

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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 69-91 to 30-35 per 1 000 live births

• Increase life expectancy from 47-51 to 55 years• Decrease HIV prevalence among 15-24 year olds from

10.7% to 5.2%• Increase number of Aids patients on treatment from

700 000 to 2 million• Increase successful TB treatment from 65% to 85% of

total cases

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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 37 459 to 22 100

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

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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

780 000 to 800 000 Increase percentage of small farmers producing for

sale from 4.1% to 10%

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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 R46 907 to R57 618 Achieve GDP growth average of 5% (2010-2014) 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

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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 600 000 Increase number of new affordable rental units from

5 000 to 20 000 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