EMBARGOED UNTIL 11:00, 30 MAY 2013
SPEECH BY MR. MANDLA NKOMFE, GAUTENG MEC FOR
FINANCE, AT THE TABLING OF THE 2013/2014 BUDGET VOTE
OF THE GAUTENG PROVINCIAL TREASURY, GAUTENG
PROVINCIAL LEGISLATURE, 30 MAY 2013.
Madam Speaker;
Honourable Premier;
Colleagues in the Executive Council;
Honourable Members of this House;
The HOD and Management of the Gauteng Provincial Treasury;
Comrades and Friends;
Ladies and Gentlemen.
INTRODUCTION
I am grateful for the opportunity to present the 2013/2014 Budget
Vote Speech of the Gauteng Provincial Treasury. This is the last
financial year of Treasury in the 2009-2014 Political Term of Office.
Therefore, the department will consolidate its programme towards
key areas that support the achievement of our priorities as reflected
in the GPG Medium Term Strategic Framework. This will enable
Treasury, through its work, to tell a story of the provincial government
in this political term of office. This is the story that revolves around
our finances; the journey that we have travelled to arrive at the stage
that we find ourselves today.
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It is a story that is stored in the databases, bank accounts and
spreadsheets of this provincial government. It can and will be given a
voice this financial year through statistical narratives and other means
that bring quantitative information and stories to life.
REVIEW OF THE 2012/2013 FINANCIAL YEAR
Madam Speaker; this year’s Budget Vote is presented a few weeks
after the release of the provincial government’s fourth quarter
financial report, which reflects key milestones in areas of spending,
cash flow and revenue management.
These, undoubtedly, were achieved due to the fact that during the
journey that we travelled since the beginning of this political term of
office, we took hard decisions to “ensure that we remained prudent
about overall spending, putting emphasis firmly on reprioritisation and
better quality of expenditure”.
As a result, we are able to stand before this House today and
announce that, amongst other things, the provincial government
spent 99% of the total adjusted budget for 2012/2013 financial year.
This expenditure which amounted to 74.7-billion represented a
substantial improvement on the previous year and showed that
provincial departments continue to improve spending to meet the
service delivery needs of the people of Gauteng.
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Furthermore, a total of R8.7-billion was spent on infrastructure
projects, and this accounted for 96% of the total budget for the year
under review. This is an improvement of 8% year on year. To put this
in a proper context; the provincial government recorded a third
consecutive year of improvement in infrastructure service delivery
programme.
Total infrastructure expenditure has increased from around 73% in
2010/2011 to 86% in 2011/2012, before reaching 96% in 2012/2013.
This achievement has been made possible due to various initiatives
that have been implemented with regards to project planning,
budgeting and implementation. To ensure that we further enhance
our performance, Treasury will shortly present proposals on how to
improve supply chain management processes for all infrastructure
departments.
Madam Speaker; let me now turn to revenue enhancement. Our
message throughout this political term of office has been that we will
work with all departments to improve the collection of revenue from
various sources. We said this because Gauteng’s Own Revenue
Generated has been on the spotlight due to the ever-increasing
demands for resources to fund the delivery of public services in the
province.
In this context, emphasis has been placed on the Treasury to
optimise
revenue
collection
and
for
provincial
government
departments to present credible revenue projections. Our emphasis
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on credible revenue forecast is driven by the knowledge that it is a
key component of sound fiscal policies geared towards service
delivery enhancement.
I am proud to report to this House today that for a third year running
the provincial government has surpassed income generated from its
revenue sources. Total revenue collected by the province as at end of
March amounted to R3, 946 billion. This means that government
exceeded its targeted collection for the financial year by R166.981
million. This shows that the measures introduced during this political
term of office to enhance provincial revenue growth to fund public
service delivery programmes are working.
Madam Speaker; we implemented robust cash management
practices throughout this political term of office and this has resulted
in positive cash flow levels for the provincial government. This
essentially means that the province has sufficient cash to fund the
needs of departments. Equally important, prudent investment of our
revenues has improved liquidity in the province.
In order to ensure that departments use allocated funds in line with
applicable legislation, in particular, the Division of Revenue Act, we
ring-fenced conditional grants, infrastructure funds and transfers to
municipalities.
As Treasury, we approach our work from the point of view that, first
and foremost, we are a strategic partner to our immediate
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stakeholders. These are the departments and municipalities in the
province.
Our work is therefore framed from that perspective so that we could
provide leadership, stewardship and oversight in all that we do to
ensure efficient resource management and fiscal discipline.
Madam Speaker; driven by the strategic intent that we have outlined
above, the work to stabilise and build a strong Gauteng Department
of Health that provides quality health care services to the people of
our province is continuing as planned.
In this regard, we have appointed PricewaterhouseCoopers as the
Administrator who will work with the provincial government to reengineer business processes in Health. The Administrator has been
appointed for a period of two years, and will follow a detail work plan
containing a reporting framework with measurable targets and tight
timeframes.
We believe that a two-year period is enough to complete this work.
This is because our focus is on the provision of efficient and effective
public health services to the people of Gauteng. That is why Health
must be turned around urgently to fulfill this mandate.
I must emphasise that this intervention does not mean that Health is
under
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administration.
We
are
strengthening
the
financial
management capacity of the department so that it could continue to
provide quality health services to the public.
Madam Speaker, Treasury is committed to ensuring that local
government works better. In the year under review, we continued with
efforts to strengthen intergovernmental relations with particular
interest to municipal financial management.
Through the quarterly Municipal Finance Indaba forums, we
conducted vigorous bilateral engagements between the MEC of
Finance, MEC of Local Government and Housing and Members of
the Mayoral Committee for Finance to ensure coordination and
continued support.
Furthermore, the Debt Management Committee established in 2009
continued to receive great support from both municipalities and
provincial departments as a key platform to resolving outstanding
government debt owed to municipalities for rates, taxes and services
charges. To date, more than R2 billion has been transferred to
municipalities from various departments within the province.
Through the DMC, we have acquired a wealth of knowledge of the
local government sphere which will provide the basis to unlock
possible blockages in the intergovernmental transfer system. Work
has started in terms of extending the scope of this Committee to
interface with stakeholders such as national departments and
parastatals that have property located in our municipalities.
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THE 2013/2014 BUDGET VOTE
Madam Speaker; our budget for this financial year is three hundred
and twenty million, two hundred and ninety two thousand rand (R320,
292.000). We plan to use these resources to deliver outputs that
support the realisation of two provincial Outcomes that the
department responds to. These are “A responsive, accountable,
efficient and effective local government”; and “Efficient, effective and
development oriented public service”.
This will be done taking into consideration that because this is the last
financial year of this political term of office, we must consolidate our
programmes to reflect progress made on key areas that support the
achievement of priorities as presented in the GPG Medium Term
Strategic Framework.
Therefore, the Last Mile Agenda of Treasury will focus on the
following key areas:
 Operation Clean Audit;
 Payment of suppliers within 30 days;
 Supply chain management issues;
 Fraud and corruption
 Fiscal discipline;
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Madam Speaker; we remain committed to the achievement of clean
audits in departments and municipalities in the province. In the
2013/2014 financial year and in line with our stated view of
consolidating our work, we aim to maintain clean audits already
achieved and work to improve the audit outcomes of other
departments and provincial entities.
At local government level, we will strengthen the capacity of
municipal internal audit units, asset management units and audit
committees. We believe that these measures will ensure that we
achieve clean audits and improve service delivery to our people.
As we’ve said before in this House, payment of suppliers within
stipulated timeframes, which is 30 days from the date of receiving the
invoice, is a must. This enables in particular small businesses – the
engine of economic growth and employment all over the world – to
have positive cash flows.
Therefore as we said when we presented the Provincial Budget, we
are working tirelessly on improving the provincial performance on the
payment of suppliers within 30 days. We are fully aware that this
requires tightening the administrative loopholes throughout the whole
value chain of procurement and interventions have been put in place
to ensure that this happens.
Furthermore, conditional grants, infrastructure funds and transfers to
municipalities and non-governmental organisations will continue to be
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ring-fenced to ensure that they are used properly and suppliers are
paid on time.
As we said last year, improving supply chain management processes
in the province is one of the most important areas that the department
is focusing on, not only in this financial year, but over the medium
term period. Our key focus areas in 2013/2014 include monitoring
implementation of policies, rules and regulations, and ensuring that
there is compliance with procurement plans.
We will continue to focus on the reporting system across all
departments to assess preferential procurement policy outcomes. We
will review the process of resolving SCM related complaints to ensure
procurement practices in the province are fair and equitable.
These interventions will assist in reducing deviations from normal
procurement processes, and thus avoid irregular and unauthorised
expenditure.
Madam Speaker; one of the key priorities of this political term of office
is the fight against fraud and corruption. As Treasury, we are playing
a strategic role towards the achievement of this outcome. We share
this responsibility with Office of the Premier and the Gauteng
Department of Finance. We therefore call on all our departments and
municipalities to act decisively on issues of fraud and corruption, and
urge staff members to blow the whistle on any corrupt activity.
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Treasury will use this financial year to complete the process of
verifying all employees of the provincial government to ensure that
salaries are paid to people appointed in line with the approved
organisational structures. We launched this project, which is called
the Identity Verification Solution, in the Gauteng Department of
Health at the beginning of March, and we intend rolling it out to other
departments over the coming months to ensure that we complete it
before end of this financial year.
This project will enable us to maintain the accuracy of the payroll
system, match bank account details with authentic officials and
eliminate overpayment of salaries to employees who have terminated
their services.
In partnership with the State Security Agency, we are continuing with
the practice of vetting all SCM officials in the province. This forms
part of our efforts to root out fraud and corruption, which manifest
itself primarily in procurement processes. The interventions we have
mentioned above are in line with the Gauteng Anti-Corruption
Strategic Framework which identifies fighting corruption as one of the
key priorities of this political term of office.
Madam Speaker; in a tight fiscal environment difficult decisions are
always required to ensure that scarce resources are directed towards
financing priorities and more effective service delivery, while ensuring
that debt levels are sustainable.
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Treasury is committed to ensuring financial stability of the province,
while facilitating service delivery. Therefore we place greater
emphasis on improving the credibility of the processes and data
which
informs
the
in-year
monitoring
system
and
quarterly
performance reports used to guide decision making. This will improve
national and provincial policy making decisions, planning and
resource allocation.
We will intensify the monitoring of conditional grant expenditure and
outcomes in line with the grant frameworks as set out in the Division
of Revenue Act. We will interact regularly with grant managers to
ensure adherence to grant frameworks, attainment of intended
outcomes, and value for money and the impact to public service
delivery.
Madam Speaker, we will continue with our regulatory and monitoring
function on public private partnerships in the province. Our focus in
this financial year will be on diversifying the project portfolio and
exploring other sectors such as water, housing and transport. Our
view is that PPPs could play an important role in overcoming service
delivery and infrastructure challenges in these sectors and we need
to showcase their value add in this regard.
Furthermore, we will intensify stakeholder engagement in particular in
the local government sector. Our focus will be on encouraging
municipalities to explore PPPs as an alternative approach to address
the delivery of public services to our communities.
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CONCLUSION
In conclusion, Madam Speaker, let me say the work that Treasury
does is depended on stakeholders who are located in all spheres of
government, and the private sector. Let me express my sincere
gratitude to all of them for their ongoing cooperation and active
participation in our engagements.
I take this opportunity also to thank the Premier for her guidance and
input in the work of Treasury. I thank the Finance Portfolio Committee
and the Standing Committee on Public Accounts for the robust
engagements that we’ve always had during the oversight processes.
These engagements have, indeed, improved the way we do our work.
Lastly I thank the HOD Nomfundo Tshabalala, the management and
staff of Treasury for their dedication to the work that they do.
I present Budget Vote 14 – the Gauteng Provincial Treasury to the
House.
Thank You
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