R333m reprioritised for Gauteng broadband network
The Gauteng finance department had reprioritised R333 million towards the Gauteng broadband network and other information and communication technologies.
This is according to Gauteng finance MEC Barbara Creecy, who said that South Africa was at a crossroads as the weakening current account deficit and rising public debt highlighted the need for fiscal consolidation.
Presenting the prepared medium term budget policy statement (MTBPS) to the provincial legislature in Johannesburg, Creecy said the economic environment had changed significantly since 2009.
“When the recession took hold in 2009, government responded to the crisis by using the fiscal framework as a tool to stimulate the economy,” Creecy said.
“Borrowing was relatively cheap and low domestic inflation limited cost pressures on public sector budgets.”
The depreciation of the rand meant fuel and other imported goods were more expensive, which had led to a current account deficit.
“The cost of borrowing money has risen and the debt to GDP ratio is expected to rise to 42.8% by 2017/18,” the MEC said.
“We are at a crossroad: this weakening current account deficit and the rising public debt highlight the need to strengthen fiscal consolidation.”
However, slow economic growth required government to maintain its fiscal stimulus into the economy, and prioritise service delivery.
“We must maintain a proper balance between these two realities,” Creecy said.
She said Finance Minister Nhlanhla Nene highlighted these challenges in his MTBPS on October 22, with budget cuts taking place across the three spheres of government.
“The Gauteng contribution to the proposed budget reductions from our equitable share… is R1.3 billion,” Creecy said.
This meant that tough times were ahead, especially as the provinces’ needs had changed little.
“As the financial resources shrink, the Gauteng population is, as we all know on the increase, and is rising faster than the national average due to in-migration from other provinces,” Creecy said.
The provincial government sought to maintain spending on quality services, increase spending on infrastructure, eliminate waste and corruption, and look for ways to increase revenue and alternate funding.
“At the outset let me make it quite clear that while we are talking about improving discipline in government spending, we are absolutely not talking about austerity measures,” she said.
Total appropriation had been adjusted upward by R237.7 million to R87.2 billion.
In terms of re-prioritisation, the economic development department planned to use R24.7 million in its baseline, added to an extra R160 million redirected from the gambling board to fund township enterprise development.
R30 million was set aside for the Automated Fare Collection System.
This would see Gauteng residents travelling on different modes of transport using a single ticket.
“In addition, R22 million will be used to conduct a feasibility study on the extension of the Gautrain network to different regions within the province,” Creecy said.
The education department had reprioritised R60 million towards infrastructure delivery.
In terms of additional resources among certain departments, health was allocated R369.4 million, with R308 million of that amount set aside for increased expenditure on non-negotiable items.
“It will also be used for the maintenance of medical and allied equipment as well as diesel for the boilers used in hospitals,” Creecy said.
The education department received R300 million to fund an increase in personnel costs due to pupil growth in Gauteng, the opening of new schools and the filling of vacant teacher posts.
The human settlements department received R133.7 million to “kick-start the programme of radical spatial transformation”.
Community Safety received R58.9 million to fund spending pressures and initiatives for reducing road fatalities, while agriculture and rural development received R18.7 million.
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