Presentation to Parliamentary Staff - 26 February 2011Devan Naidoo – Chief Director, Economic Services, Public

Finance

INTRODUCTION

• 2011 MTEF Baseline budget 2011/12 to 2013/14• 9 Economics Services Departments 3 year allocation of R96,2 billion• Projects of public benefit that cannot secure private funding• Capital investment and creation of jobs• Build robust regulatory institutions to enhance public services• Human resources development• R800 million allocated for projects on the green economy and

environmental protection; disbursement shall depend on robust business plans to foster environmental protection

DEVAN NAIDOO: CHIEF DIRECTOR: ECONOMIC SERVICES devan.naidoo@treasury.gov.za

Vote 11Department of Public Enterprises

1. Strategic Focus• Provide decisive leadership and ensuring that the government

shareholder management model is implemented within the SOE’s• Optimise capital investment and operational efficiencies in SOE’s• Refining the policy and regulatory environment for SOE’s• Integrate Departmentprogrammes with industrial policy and

economic cluster programme

2. 2011 MTEF Baseline R640 million (R230m, R200m, R210m)3. Main Funding Item

• R40m for PBMR engagement of Nuclear Energy Corporation of SA to decommission and dismantle the fuel laboratories

4. No additional funding to SOEs over the MTEF5. Eskom R20 billion request under consideration

Vote 26Department of Agriculture, Forestry & Fisheries

1. 2011 MTEF Baseline R15.5 billion (R4.7bn, R5.3bn, R5.5bn)

2. Savings of R110 million (R33m, R38m, R39m) from goods and services

3. Main Funding Items:• Food security and agrarian reform: R4.2 billion (R1.2bn, R1.4bn, R1.6bn)

• Agricultural production and food safety: R2.9 billion (R892m, R994 m, 1bn)

• Forestry and Fisheries operations: R3.7 billion (R1.1bn, R1.3bn, R1.3bn)

Department of Agriculture, Forestry & Fisheries(continued)

3. Transfers to entities:• R2.4 billion (756m, R869m, R797m) for operational expenditure and

infrastructure (R176m for upgrading Foot and Mouth disease facility ending 2012/13) to the Agricultural Research Council, which provides agricultural related research

• R629 m (R191m, R251m and R187 m) to the Marine Living Resources Fund for operational expenditure, maintenance of patrol vessels and office space (R125m)

4. Strategic Focus• Increase smallholder farmers from 200,000 to 250,000 by 2014

• Accelerate implementation of the national extension recovery plan by recruiting 1,000 extension and technical services officers

• Establish crop, forestry, fisheries and livestock production schemes for 300,000 smallholder farmers by 2015

Vote 28Economic Development Department

1. 2011 MTEF Baseline R2 billion (R595m, R675m, R713m)

2. Savings of R5 million (R2m, R2m, R2m)

3. Departmental allocation: 22% of the total budget (R439m)• R267m for compensation of employees over the MTEF

Economic Planning and Coordination: R121m Economic Policy Development: R84m

4. 78% (R1.5bn) for transfers and subsidies:

• Competition Commission: increased staff compliment, establish a cartel unit: R461m

• Khula Enterprises: wholesale finance, indemnities: R230m• Khula Direct: direct lending pilot project: R55m in 2011/12• South African Micro-finance Apex Fund: wholesale finance and capacity

building support for retail micro-finance institutions: R282m

Economic Development Department(continued)

• IDC: Agro-Processing Competitiveness Fund: support for new and non-dominant firms in the sector: R250m

• International Trade Administration Commission: management of the trade administration system: R219m

4. Strategic Focus:

• Implement The New Growth Path• IDC Green Economy Fund – developmental financing to stimulate growth in

the sector. The fund will be self-financed through withdrawal of mature equity investments and higher borrowing.

• Rationalisation of Development Finance Institutions – align programmes, the development agenda and enhance value-for-money

Vote 30Department of Environmental Affairs

1. 2011 MTEF Baseline R7.8 billion (R2.8bn, R2.4bn, R2.6bn)

2. R527 million in projected forex savings in the purchase of the research vessel in 2012/13

3. R26 million general savings

4. R70 million is owed to the Department of Public Works, for maintenance and repairs of harbours, by the Marine Living Resources Fund on DEA’s behalf

Department of Environmental Affairs(continued)

5. Main Items:

• R1.8 billion (R529m, R589m, R695m) for EPWP projects.

• R409 million (R127m,R122m,R159m) for capex in the public entities (e.g.R30m in 2013/14 upgrading tourist accommodation at the Isimangaliso Wetlands)

• R200 million for climate change projects including the UN Climate Change Conference in November 2011, Durban

• R45 million to combat wildlife trafficking

• R15 million improve oil spill management

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Vote 32Department of Mineral Resources

1. Strategic Focus:• Rehabilitate of derelict and ownerless mines

• Manage acid mine drainage

• Implement the mining sector strategy and beneficiation strategy (targeting 10% pa growth in gross fixed capital)

2. 2011 MTEF Baseline R3.5 billion (R1bn, R1.1bn, R1.2bn)

3. Savings of R71 million (R23m, R24m, R24m) from goods and services

(*

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Department of Mineral Resources(continued)

5. Main Funding Items:• Mineral policy and promotion: R1.5 billion (R480m, R520m,

R559m)

• Mineral regulation: R506 million (R160m, R171m, R175m)

• Promotion of mine safety and health: R475 million (R148m, R158m, R170m)

• Council for Mineral Technology: R563 million (R177m, R197m, R188m) to fund operations

• Manage acid mine drainage: R140 million (R35m, R46m, R59m,) for providing water management solutions (R56m), assistance to mines(R54m), and to develop mine water technology to treat contaminated mine water (R30m)

• Department of Water Affairs also allocated funds (R225 million) for addressing acid mine drainage

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Vote 33Rural Development and Land Reform

1. 2011 MTEF Baseline R26.2 billion (R8.1bn, R8.7bn, R9.4bn) 

2. Savings of R84 million (R10m, R36m, R38m) from goods and services

3. Main funding items• R2 billion (R441m, R641m and R903m) for the comprehensive

rural development programme (developing schools, roads, clinics, etc.)

• R12.6 billion (R4.2bn, R4.4bn and R4.6bn) for the land reform programme (land redistribution)

• R7.9 billion (R2.5bn, R2.6bn, R2.8bn) for the settlement of restitution claims.

• R399 million(R133m pa.) for National Rural Youth Services Corp. The target is to employ 5 000 people annually.

Vote 34Department of Science & Technology

1. 2011 MTEF baseline is R14.8 billion (R4.4bn, R4.9bn, R5.5bn)

2. Square Kilometer Array (SKA) 2011/12 allocation of R547 million rescheduled to 2012/13 and 2013/14 (R219m and R328m); savings of R509 million in 2010/11

3. R43 million (R15m, R14m, R14m) in savings

4. Transfers:• National Research Foundation: R3.3 billion (R1.1b, R1.1b, R1.1b)R358 million

(R5m, R72m, R281m) bursaries for post-graduate students• Council for Scientific and Industrial Research: R2.2 billion (R687m, R728m,

R766m)

Vote 35Department of Tourism

1. Strategic Focus:• To create conditions for sustainable tourism growth and development and to

support the New Growth Path which focuses on job creation and economic growth

2. 2011 MTEF Baseline of R3.9 billion (R1.2bn, R1.3bn, R1.3bn)

3. Savings of R12 million

4. New head office R125 m (R49m, R37m, R39m)

3. SA Tourism: R2.1 billion (R669m, R702m, R740m)

4. EPWP budget of R771m (R283m, R237m, R250m)• In addition, R19m incentive when EPWP job targets are exceeded

• DPW reduced the EPWP incentive budget by R121 million (R22m, R48m, R50m)

Vote 36Department of Trade and Industry

1. 2011 MTEF Baseline R21.8 billion (R6.8bn,R7.4bn,R7.6bn)

2. Reprioritisation &/or savings of R R316 million (R30m, R32m, R254m)

3. Industrial Development Zones (IDZs) : MTEF R1.7 billion (R616m, R610m, R438m) for bulk infrastructure such as roads, pipelines

4. Regulatory Institutions: MTEF R1.1 billion

– South African Bureau of Standards

– National Regulator for Compulsory Specifications

– National Metrology Institute of South Africa

– South African National Accreditation System

Department of Trade and Industry2011 MTEF Transfers

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R million TotalSmall Enterprise Development Agency 1 626 South African Bureau of Standards 708 Export Credit Insurance Company 377 National Metrology Institute of South Africa 222 National Regulator for Compulsory Specifications 217 National Consumer Tribunal 165 National Consumer Commission 118 National Credit Regulator 97 South African National Accreditation System 82 National Gambling Board 75 Companies Intellectual Property Commission 53 Companies Intellectual Property Tribunal 0 Estate Agency Affairs Board 0 National Empowerment Fund 0 National Lotteries Board 0 TOTAL 3 739

DTI Incentive Schemes R11.1 billion (R3.3bn, R3.8bn,R4bn

• Small and Medium Enterprise Development Programme 912• Development Programme:

Production Allowance 3,009• Enterprise Investment Programme 2,366• Film and Television Production Incentive 844• Export Market and Investment Assistance 427• Critical Infrastructure Programme 493• Business Process Outsourcing 463• Black Business Supplier Development Programme 284• Co-operative Incentive Scheme 138• Small and Medium Manufacturing Development Programme 4• Sector Development Programme 10

Thank You

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