Speech by the honourable MEC for Finance, Mr MB Masuku (MPL) during the occasion of tabling of the provincial adjustment budget at the Mpumalanga Provincial Legislature
05 November 2013
Honourable Speaker and Deputy Speaker
Honourable Premier, Mr DD Mabuza
Honourable Members of the Executive Council
Honourable Members of the Provincial Legislature
Director General, Dr Nonhlanhla Mkhize
Head of Department of Finance, Ms Nombedesho Nkamba and other Heads of Department
Representatives of Labour, Business, Civil Society and the Media
Esteemed guests
Beloved People of Mpumalanga
It is an honour for me to address this occasion of tabling of the adjustment budget for 2013/14 to the people to Mpumalanga.
In the past 7 years I have occasionally shared with this house interesting extracts from Ian Martel’s book: “The Life of Pi.” My favourite being:
People Move, because of the wear and tear of anxiety. Because of the gnawing feeling that no matter how hard they work their efforts will yield nothing, that what they build up in one year will be torn down in one day by others. Because of the impression that the future is blocked up, that they might do all right but not their children. Because of the feeling that nothing will change, that happiness and prosperity are possible only somewhere else
Pi was the son of the Patels, who survived a cargo ship wreck and stay 227 days in a life boat at sea sharing it with a Bengal tiger.
Today I would like to take you to the end of the story.
Investigators from the Maritime Department in the Japanese Ministry of Transport came to speak to Pi.
They asked him to explain the whole story until the end of the 227 days. So, at the end, he asked them if they believed the story.
They said they would like it without the part with animals and the Bengal Tiger.
He then told them a concocted story without animals and they were completely satisfied.
In this adjustment we have chosen to tell the original story. Whether is palatable or not palatable, whether exciting or not exciting.
We do this because we subscribe to the principles of Transparency, Accountability, Responsibility and Fairness to our people.
ECONOMIC OUTLOOK
Honourable Speaker, the 2013/14 Mpumalanga Adjustment Budget, is tabled today in an environment of continued economic and fiscal uncertainty.
While the global economic prospects have improved, in a number of the advanced economies, the downside risks remain.
The Honourable Minister of Finance, Mr Pravin Gordhan, indicated in the Medium Term Budget Policy Statement, on 23 October 2013, that an economic growth rate of 2.1 per cent is expected this year for South Africa, as opposed to the 2.7 per cent forecast in the National Budget in February 2013.
The 2013 provincial economic growth rate has also been revised downward to 2 per cent.
We require however a growth rate of at least 5 per cent per annum, to fulfill the Mpumalanga Economic Growth and Development Path as well as the National Development Plan targets.
Provincial labour market
Honourable Members,
Mpumalanga experienced a net job creation of 30 000 jobs in the third quarter of 2013, and a huge 105 000 jobs on an annual basis. (Statistics South Africa, QLFS). The annual figure represents 27.4 per cent of the net job creation figure of South Africa as well as an employment growth of 11.3 per cent, which was by far the highest growth among the provinces
Community services, mining, construction and finance were the main contributors to the very high job creation in the province the last year.
The Province and those who contributed to this state of affairs must be commended for this resilience under difficult times.
However, it is important that, the province start looking at other potential employment creation areas, if we want to win the war against unemployment.
Small and home-based industries have proven to be the best means of creating jobs throughout the world, as evident through history of all successful nations.
It is therefore important that our municipalities intensify their spatial planning and Local Economic Development efforts to realize this.
We need to move with speed towards creation of decent and sustainable jobs for the 374 000 unemployed people in our province.
We have to do something, to improve the chances of employability of young people who constitute more than 70 percent of the unemployed people, through the above mentioned initiatives and skills development efforts.
It is important that we continue to convey positive message of hope and courage to our children, of the importance of diligence and innovation, as well as that of strategic resilience than of short cuts, hopelessness and despair.
Our children should know that the future of this country is in no one else hands, but theirs.
We must work hard to make them to understand that it is important to use their preparatory stage to shape their knowledge and skills to face the future.
Education remains a cornerstone towards the realization of any nation and any individual’s future dreams.
Let me take this moment to wish the grade 12 learners in our province a success in their exams.
Provincial inflation
The Provincial inflation rate is the third lowest among the nine provinces at the moment, at 5.7 percent. It is lower than the national headline inflation of 6 per cent.
The biggest threat to the inflation outlook remains the volatility of the rand exchange rate, but this seems to have stabilized in the last two months.
Food and non-alcoholic beverages as well as housing and utilities exert some upward pressure on the average price level of the province.
It is therefore critical that we intensify our support on community initiatives towards improving food security. The Comprehensive Rural Development Programme continues to make a huge difference to households in the targeted eight municipalities.
Poverty
The poverty rate in the Province declined from 43.7 per cent in 2009 to 36.9 per cent in 2012.
The number of people living in poverty declined by 180 000 in this period.
The social grants, although should be seen as a short term relief measure, provide a very important cushioning for many in our society.
The Financial and Fiscal Commission argues that social grants have proven, not to have provided social relief, but also played a role in the stimulation of the economy in socio-economically distressed communities.
ADDRESSING OUR CHALLENGES
Low economic Growth in the midst of a global financialcrisis
Honourable Speaker
The low economic growth affects both our national and house hold incomes and cash flows. Both government and households are under strain and begin to supplement budgets through borrowing. Many households are over-indebted and government is fighting hard to reverse runaway budget deficit.
The Honourable Minister, Pravin Gordan indicated that:
…we need faster, inclusive, job-creating growth. Without growth, we cannot generate the revenue needed to fund our social programmes, infrastructure investment and incentives to support important industries.
I agree with the Minister that we need greater cooperation and better alignment between labour, business, government and other relevant roleplayers, to get things done and building together a “smart” South Africa.
We must commend the Premier of the ANC led Provincial Government of Mpumalanga, Honourable D.D. Mabuza.
The Premier initiated a process of building partnership, with the private sector at home and sister provinces abroad.
This is making serious contribution towards enhancing the needed socio-economic investments in our province for growth.
However, it is important that our budget and expenditure, at all times, must also make a difference in, and impact on the lives of our more than 4 million provincial citizens.
It is therefore critical that we spend our money wisely and in the right areas, to maximize the impact, especially on the poor people of our province.
REVIEWING THE FIRST SIX MONTHS OF THE FINANCIAL YEAR
In the past six months, the ANC led Provincial Government continued to positively alter the course of our ugly historical past.
The reduction of unemployment, poverty and inequality, remain the central challenges of our country and also of our province.
In the beginning of the financial year we have committed to spend to every R100 in our budget:
Six months down the line, we remain on course towards fulfillment of this commitment.
Our adjusted budget allocation had insignificant impact to the proportional allocations to our priorities.
Our priority focus is still intact, besides the fact that, in this adjustment R 262. 8 million was shifted from other priorities towards funding security of the state strategic sites.
Areas of Significant Pressures to the Provincial Fiscal budget
The areas that exert pressure on the Provincial budget include infrastructure, accruals, scholar transport, and security services costs, amongst others.
During the beginning of the term we have put mechanisms to address them. They, however, continue to pose a challenge.
Accruals
Since 1994, each administration has inherited liabilities accrued from previous financial years.
This has put pressure on the resources budgeted to make a difference in each specific year.
The fourth administration of the ANC led Government ending in 2014, resolved to deal with this matter head on, and put it to an end once and for all.
We have determined the causes of the accruals and improved the systems to detect and respond to them, even before the annual performance plans are approved.
This financial year, departments are under serious pressures, as this is the final year of the term.
Departments have to wrap up all remaining accruals by the end of the 2013/14 financial year.
However, we need to report that two department could not stand the pressure and needed extra assistance.
The Department of Agriculture Rural Development and Land Administration, as well as, Department of Community Safety Security and Liaison, experienced the challenge of balancing performance with the allocated budget.
This situation led to the activation of section 18(2)(g) of the Public Finance Management Act of 1999
Infrastructure spending
The centralization of the infrastructure delivery to
the Department of Public Works, Roads and Transport is beginning to bear fruit.
There has been a drastic improvement in the
expenditure of infrastructure budget.
Our concern is no longer about under expenditure but
the threat of over expenditure if we do not slow down the pace.
However, escalation of cost and management of
variation orders still remain a challenge to be tackled.
The 2013 budget adjustment is informed by the above.
The Executive Council approved the Mpumalanga
Infrastructure Delivery Management System (IDMS), which sets the course to be
followed in delivering infrastructure in the Province.
The IDMS commits us to deliver infrastructure better
and more effectively. It provides for clear definition of roles and
responsibilities for each role player.
We hope that this will go a long way towards
improving our planning and reduce adjustments during the course of the
implementation of the projects.
Security budgets
The challenges faced on security budgets were hidden
for a longtime since 1994.
The security service has been largely underfunded in
departments.
Departments would either fund this item during
adjustments, or allow its cost to accrue to the following year.
The centralization of this function to the Department
of Community Safety, Security and Liaison, in the first year, had shown that the
balance between compliance and affordability was a problem.
It also enabled us to clarify what needs to be done.
The fourth administration of the ANC led government
has decided to deal with the challenge by the end of the 2013/2014 financial
year. This Budget adjustment makes us appreciate how serious this challenge was.
Learner-teacher support materials
The outcry on the shortage of learner teacher support
materials is now a thing of the past.
However, some schools have indicated some remnants of
this challenge. This adjustment budget speaks to this challenge.
We need to indicate that the bigger challenge of
total loss of books, due to non-return of text books by learners, and lack of
non-replacements mechanisms at school level, has been discovered.
It is a challenge that we have to deal with in the
next budget cycle.
Bursaries
There has always been a call for efforts to support
development of skills aligned to the economic potential of the province.
In this current term of office, bursaries and their
budgets were centralized, in the Department of Education.
This was done after the knowledge and skill
assessment of the Province was conducted, and a skills development strategy of
the Province was adopted.
This move has enabled the Province to focus on
delivery of critical skills.
However centralization has revealed that the
departments were managing this function by adjustment in budgets during the
course of the financial years. This compromised the base line for funding
bursaries.
In the next six months we are concluding the process
by finalizing all necessary transfers. Some of which this adjustment budget
speaks to.
Medicine
This administration is nearing finding complete
solution to the challenge of access to quality medicine in our health
facilities. We have dealt with a challenge of availability of medicine.
In the next six months we will be addressing the
risks associated with expired medicine, as well as extremely unpredictable
inflationary increase charged by suppliers.
Scholar transport
Scholar transport is one of those items that have
continuously been a challenge since 1994.
The alignment of scholar transport and placing it
under the Department of Public Works, Roads and Transport has allowed us to
define the challenge and deal with it.
This budget item has also been funded through
adjustments, and it continued to grow even within the financial years.
During the course of the term, we managed to
stabilize this item.
We are hopeful that the remaining challenges will
be addressed by the end of this financial year.
On the Public Entities
The public entities are stabilizing but there are
still challenges.
In the beginning of the financial year resources were
allocated towards stabilization of their budgets.
MEGA has been struggling to find its footing in
relation to its new mandate of infrastructure delivery. However, we are glad to
report that it has already been assisted by the Executive to find its course.
In the next six months we shall see MEGA accelerating
its water infrastructure delivery.
Other Emerging Challenges
Integrated Human settlements
The integrated Human Settlement priority was
confronted with numerous challenges.
However the intervention through the Honorable
Premier has restored the situation.
The department has developed a framework which
promises to stabilize the situation. We have to accelerate our delivery during
the course of the six months.
Building strong local government system
The strength of our municipalities is very important
in the delivery of basic services.
In the past six months, we have seen major
improvements in the functioning of our municipalities.
We have seen our councilors working closely with
communities. This improved a great deal in the development of our predetermined
objectives.
We appreciate the commitment of the Honorable Premier
in bringing all stakeholders together to collectively address the challenges in
the local government sphere on monthly basis.
The Provincial Treasury provided technical support,
with improved outcomes. All municipalities were able to submit monthly
legislated report on time, for the first time, by 30 September 2013.
We must also applaud all the municipalities in the
Province for having submitted their Annual Financial Statements to the AG on
time.
The regulatory audit on all municipalities is still
underway and will be concluded on 30 November 2013.
The past six months period has enabled us to look at
the pressures related to the Community Development Workers; interventions in
five municipalities and also the programme of supporting the establishment of
the Traditional Affairs.
Provincial Adjustment budget
The Provincial Fiscal Framework is adjusted by
R526.150 million.
The total budget increases from R33.659 365
billion to R34.185 515 billion.
A rollover amount of R23.3 million is approved
for the Provincial Legislature as well as the Departments of Culture, Sport and
Recreation and Agriculture, Rural Development and Land Administration.
This adjustment budget takes into account the
pressing needs of our people.
It also seeks to respond to the unforeseen and
unavoidable situations, including on policy decisions that were agreed at the
Executive Council.
Technical adjustments
Compensation of employees
The adjustments to the Provincial Equitable Share
include R44.2 million towards wage costs and R77. 2 million for
the re-grading of the clerks at salary levels 3 and 4.
FET Colleges Grant
The Province also receives an amount of R617
thousand, as an in- year adjustment for the increase of the compensation of
employees at the Further Education and Training Colleges, due to higher than
projected inflation.
Devolution of Property Rate Fund
The Province receives an amount of R28.2 million
as rollover from the national fiscus under the former Devolution of Property
Rate Fund Grant which was committed but was not paid at the end of the 2012/13
financial year.
Disaster Funding
We received the amounts of R 25.5 million to
cater for the repairs and replacement of Agricultural, education, health, roads
and human settlement related infrastructure, damaged by the flood.
The introduction of a new formula on the Provincial
Roads Maintenance grant led to a revision downwards on the provincial allocation
amounting to R16.7 million.
Conditional Grants rollovers
The adjustment provides for rollover of R 41.8
million conditional grants towards Community Library Services, Mass Sport
Participation Programme, National School Nutrition Programme, Technical
Secondary Recapitalization and for hospital revitalization.
SPECIAL ALLOCATIONS FROM OWN REVENUE AND EQUITABLE
SHARE FUNDING
The following special allocations were made from
special revenue and reprioritizations:
R6 million is allocated for the
Province to host national event - World Aids Day;
R1 million for Rapid Intervention
Unit, and
R4 million is allocated towards
the launch of the University of Mpumalanga.
R5.4 million is set aside to
allow the Provincial Legislature to implement its Public Education programme.
R17. 3 million is provided for
absorption of the Community Development Workers.
R4.7 million is made available to
support interventions in municipalities.
R67.8 million is allocated
towards Learner-Teacher Support Material.
R17.8 million is allocated
towards the stipends of child minders and gardeners.
R119 million and R85 million
is allocated to the Education and Health infrastructure respectively.
Provincial Revenue provides R262.8 million
towards security services;
R14.9 million is added to
increase the number of student in the Cuban Programme from 10 to 100.
A total of R4 million is added for
construction of sports facilities in municipalities.
R9.5 million is allocated as a
reimbursement for the hosting of the Women’s Day celebration in August 2013.
R299 thousand is set aside as
re-imbursement for the support that was provided in relation to Marikana
tragedy.
R30 million is set aside for
disaster related expenditure.
This adjustment takes care of function amounts on HRD
and bursaries amounting R8.1 million and R11.5 million
respectively.
Allocations per vote
Therefore the adjustments are as follows:
Vote 1: Office of the Premier
The budget of the Office of the Premier’s net
increase is R7.935 million from R200.492 million to R208.427
million.
Vote 2: Provincial Legislature
The Provincial Legislature received R7.971 million,
increasing the budget from R243.434 million to R251.405 million.
Vote 3: Finance
The budget of the Department of Finance decreases by
R1.863 million from R266.868 million to R265.005 million.
Vote 4: Co-operative Governance and Traditional
Affairs
The net increase on the budget of the Department
Co-operative Governance and Traditional Affairs amounts to R19.801 million.
This increases the allocation from R425.908 million to R445.709
million.
Vote 5: Agriculture, Rural Development and Land
Administration
The budget of the Department of Agriculture, Rural
Development and Land Administration decreases by R36.648 million from
R1.050 045 billion to R1.013 397 billion.
Vote 6: Economic Development, Environment and
Tourism
The budget of the Department of Economic Development,
Environment and Tourism decreases by R9.458 million from R821.567
million to R812.109 million.
Vote 7: Education
The allocation of the Department of Education
increases by R205.941 million from R14.896 956 billion to
R15.102 897 billion.
Vote 8: Public Works, Roads and Transport
The budget of the Department of Public Works, Roads
and Transport decreases by R17.862 million from R3.971 072 billion
to R3.953 210 billion.
Vote 9: Community Safety, Security and
Liaison
The Department of Community Safety, Security and
Liaison receives net increase of R262.800 million, adjusting the budget
from R841.748 million to R1.104 548 billion.
Vote 10: Health
The budget of the Department of Health net increase
is R37.469 million from R8.084 505 billion to R8.121 974
billion.
Vote 11: Culture, Sport and Recreation
The budget of the Department of Culture, Sport and
Recreation will have a net increase of R27.699 million from R351.808
million to R379.507 million.
Vote 12: Social Development
The Department of Social Development experience a net
increase of R25.339 million, adjusting its budget from R1.154 294
billion to R 1.179 633 billion.
Vote 13: Human Settlements
The budget for the Department of Human Settlements
will decrease by R2.974 million from R1.350 668 billion to
R1.347 694 billion.
CONCLUSION
Honourable Speaker,
I hereby, on behalf of the Honourable Premier and the
Executive Council collective table the Adjusted Estimates of Provincial Revenue
and Expenditure for 2013/14 and Adjustment Appropriation Bill for 2013/14 for
consideration by this august House.
Honourable Speaker,
Allow me to extend my gratitude to the Honourable
Premier for entrusting me with the responsibility to oversee the preparation and
present this budget to the people of Mpumalanga;
Many thanks to all Members of the Portfolio Committee
on Legislature Oversight, in particular, the Chairperson, Honourable V.V.
Windvoel.
To the Premier’s Office and Finance and colleagues in
the Budget and Finance Committee for sound advices, including during the
preparations of this adjustment budget;
To my colleagues in the Executive Council, thank you
for your continuous support and your participation in the MTEC discussions;
I would like to thank the Director General for making
the MTEC Technical discussions a possibility.
A word of thanks to the Head of the Department,
Senior Management and all officials in the Department of Finance who made this
day possible; and
Humble thanks to my extended family, and my beloved
kids and grandchildren.
Another writer and poet whose work I like to read
from my childhood is Ntate Wally Serote.
Last week I came across his newly published book,
titled “Rumours” and he never disappointed me.
I would like to leave you with some of his opening
writings in this book as he was capturing the Dream of a character KEKE.
Keke was dreaming of himself being chased by the
apartheid forces. He managed to out run them. Before he knew, he found himself
unknowingly and unwillingly running towards the headquarters of the enemy
itself. Only to wake up in a reality that he was already in a democracy, in its
fourth term.
He called his long standing comrade, Mandla, to share
the predicament of his dream. Mandla was in a bad space, because the university
where he was a professor was convening to determine his fate, on the ground of
suspected corruption.
I am doing this because I know that in the course of
our work, we sometimes get overwhelmed to a point where we feel like giving up.
Then we remember that we are in a mission to make a
better life a reality for everyone.
Sometimes we pick ourselves from ashes.
We must remember that while we are in a mission, and
so are our detractors.
All we can do is to keep running and make sure we
enjoy the good of being a step ahead.
The extract reads:….
Alluta Continuo! The struggle for better life for all
goes on!
ANNEXURE
Extract of KEKEs Troubled dream from “RUMOURS”
By Mongane Wally Serote
(as extracted by Madala Masuku for purpose of
reading during an Mpumalanga Budget adjustment speech of November 2013)
“KEKE WAS RUNNING.
HE HAD BEEN RUNNING a long time,
up and down steep slopes.
His chest was burning, ready to burst, and
he was pouring sweat as he pushed himself uphill.
His legs elastic, rubbery.
But he had to push; he dared not stop.
He had to run even faster, then downhill would
follow.
He had to be careful not to slip going down,
because his legs were lame and about to give in.
But he had to keep running;
He had to push as fast as he could.
He was on a mission and he could not fail.
He could not stop or slow down, he had to run and
run.
…The product of Oliver Tambo, of Moses Kotane, of
MmaMphsho.
Nothing could stop him unless his limbs broke or he
fell down dead.
Now he had reached the downhill.
He felt himself trip but he righted himself and ran
on.
…This wasn’t what he was raised for,
What he trained for!
No! yet a guerilla mustn’t be afraid to dodge and
evade,
to avoid a battle he clearly couldn’t win.
… the force was closing in!
He heard a familiar rumble.
It wasn’t one-it was many!
They weren’t trying to match his speed;
they had set their own pace.
Could he outrun this formidable force?
He had done so before he had evaded them in the
camps.
Their fire scorched the earth and burnt the trees,
leaving gunpowder heavy in the air.
But they had never found him as they roared and
raised the dust.
They were like animals with fire in their bellies.
Or had it just been a rumour?
No, no, here they were, alive and breathing, roaring,
puffing, steady and calculating, keeping his pace.
He had to leave them behind.
Their intentions were evil.
He had to run as fast as he could.
Even rumor said they were evil and they meant no
good.
But look! They were changing their course …!
Why?
To destroy the place and its people like plastics?
…Had they gone the wrong way?
No! This was their mission, they had been directed
there.
But he too had his mission.
So he had to run.
…He had tamed his legs that had threatened to betray
him;
he had brought them under control.
He had to get to Alexandra before the force!
…Keke Kept running,
And in his vision kept floating like dreams
Wher was he running to/
Pretoria? No!
He thrashed and tried to resist.
He was angry, exhausted,
His mission clouded and confused
He was struggling as if to wrench himself from the
claws of an eagle and yelling,
But he had no air…”
[This is abridged version of the dream]
Issued by the department of finance, Mpumalanga Provincial Government
