Provincial Government Western Cape Provincial Treasury BUDGET 2009 OVERVIEW PR: 02/2009 ISBN: 978-0-621-38389-8 To obtain additional information and/or copies of this document, please contact: Western Cape Provincial Treasury Directorate Budget Office Private Bag X9165 15 Wale Street Cape Town Tel: (021) 483-5618 Fax: (021) 483-6601 E-mail: [email protected] This publication is also available online at http://www.capegateway.gov.za/eng/pubs/budgets/ Printed in the Republic of South Africa For the Government Printers Cape by Formeset Printers Cape Foreword The 2009 Western Cape Provincial Budget reaffirms this Government’s commitment to finding ways to provide improved access to quality public, social and economic services despite the current challenging economic environment. Our strategic focus over the medium term remains unchanged, however periodic refinements have allowed for adjustments in key service delivery areas. The Provincial Budget represents the end result of a number of discussions, technical scrutiny, political interaction and determination of absolute and relative priorities. The 2009 Budget Overview therefore focuses on the major service delivery highlights of departments and provides valuable insights as to what the allocations over the 2009 MTEF are meant to buy. It focuses on some of the more pertinent achievements and makes the case that departmental allocations over the MTEF should be seen in context of already strong baseline growths. Budget 2009 is derived from our collective efforts to acknowledge community needs, national policy priorities and provincial perspectives, summarised in the following broad themes: • Support of decent work opportunities and skilling; • Strengthening of Education and improving access and nutrition; • Strengthening health services, infectious disease control and health research and development; • Protecting and enhancing the focus on youth, women, elderly and the poor; • Rounding-off preparations for 2010 FIFA World Cup; • Improving the built environment, including housing and roads; • Extending agrarian reform and rural development and sustainability of food security; and • Strengthening financial prudence, corporate governance and intergovernmental relations (IGR). Departmental performance plans submitted confirm that there is a heightened awareness that the tasks ahead are about improving access, effectiveness, quality, efficiency, equity and service delivery. Our democracy and the budget process have grown in maturity and in response departments have a clearer focus on involving communities, through greater community and structured engagement in service delivery. These are evidenced in outreach programmes such as the service delivery jamborees, the Social Transformation Projects, the use of modern technology (ICT solutions) to promote awareness of government services and public participation, greater community involvement in personal safety and crime prevention through Community Policing Forums and initiatives such as the Hands Off Our Children Campaign; Protect Our Property (Education); to name but a few. Good governance and management practices also support the exploration of greater efficiency, efficacy, value for money, collaboration and improved accountability within departments and across spheres of government. These practices have become imperatives despite our economic fortunes. To leverage efficiency gains, the need for departmental collaboration and joint work has become a critical success factor. Achieving collective and or common goals, related negotiation around funding allocations, collaborative priority setting and trade-offs are considered institutional elements of the Provincial Budget process. In this regard the role of the provincial cluster system becomes crucial as a collaborative institutional mechanism to ensure coherent strategic direction and implementation. Exploring the detail of departmental baselines has become an important exercise to soften any adverse effects of the tightening fiscal envelope on key service delivery. Therefore, a renewed emphasis on credible budgets, which includes a revision of non-core spending items, underpins the broader goal of improving relative efficiency and value for money. The earmarking of expenditure priorities was revised to achieve greater flexibility in light of tighter fiscal conditions and adversely changing socio-economic factors, but also to enhance the focus on key spending areas. Earmarking of expenditure priorities have been combined in a number of cases, making it easier to track expenditure and monitor performance. Accountable management of earmarked allocations aims to amplify frontline services and promote collaboration across departments. Intergovernmental relations (IGR) have the potential to improve service delivery imperatives through strategic partnerships and agreements within and across departments, with other spheres of government as well as social partners. Refining the formulation and execution of the 2009 Western Cape Estimates of Expenditure so as to respond adequately to improving the lives of all people living in the Western Cape, is an arduous task entrusted to all working in this Government. Therefore my thanks to the Minister of Finance, Economic Development and Tourism: Mr Garth Strachan, the Premier and the Provincial Cabinet for their invaluable leadership throughout this exceptionally challenging budget process, my fellow Heads of Clusters and Departments and the ever diligent Provincial Treasury staff; Chief Financial Officers in Departments and to everyone else, without whose efforts these estimates would not have seen the light of day. DR JC STEGMANN HEAD OFFICIAL: PROVINCIAL TREASURY DATE: 24 February 2009 Contents Chapter 1 Executive Summary 1 Chapter 2 Socio-economic Backdrop to Budget 2009/10 9 Chapter 3 National Policy Framework and Provincial Priorities 23 Chapter 4 The 2009 Budget Process 39 Chapter 5 Receipts 49 Chapter 6 Summary of Aggregates 65 Chapter 7 Expenditure by Department 67 Chapter 8 Expenditure by Economic Classification 95 Chapter 9 Expenditure on Training 101 Chapter 10 Infrastructure 107 Chapter 11 Public-Private Partnerships 121 Chapter 12 Summary of Transfers to Public Entities 125 Chapter 13 Transfers to Local Government 131 Chapter 14 Provincial Payments and Estimates within Metro, District 135 and Local Municipalities i Tables Table 2.1 Overview of the world economic growth outlook projections 10 Table 2.2 Macro-economic overview for South Africa, 2008-2011 12 Table 2.3 Western Cape GDPR y-o-y % change 14 Table 2.4 South Africa and Western Cape population by racial group, 2001 - 15 2007 Table 2.5 Western Cape population estimates, 2007 16 Table 2.6 Distribution of income by source for the Western Cape households, 17 2000-2005/06 Table 2.7 Changes in household expenditure patterns in the Western Cape 18 between 2000 and 2005/06 Table 2.8 Measures of income poverty in South Africa and the Western Cape, 21 2000 and 2005/06 Table 3.1 Key deliverables for each cluster 34 Table 5.1 Fiscal Framework of the Western Cape 49 Table 5.2 Changes in PES component shares 53 Table 5.3 Summary of conditional grants by vote and grant 56 Table 5.4 Departmental shares of conditional grant transfers 58 Table 5.5 Summary of Provincial Own Receipts by Department 59 Table 5.6 Western Cape Own Receipts by Source 2008/09–2011/12 60 Table 5.7 Summary of donor funding 63 Table 6.1 Provincial budget summary 66 Table 7.1 Summary of provincial payments and estimates by vote 68 Table 8.1 Summary of provincial payments and estimates by economic 97 classification Table 8.2 Summary of personnel numbers and cost by vote 98 Table 9.1 Summary of provincial payments on training by vote 103 Table 10.1 Summary of provincial infrastructure payments and estimates by vote 112 Table 10.2 Summary of provincial infrastructure payments and estimates by 115 category and vote Table 11.1 Summary of departmental public-private partnership projects 122 ii Table 12.1 Summary of provincial transfers to public entities by transferring 125 departments Table 12.2 Summary of departmental transfers to public entities by transferring 126 department Table 13.1 Summary of provincial transfers to local government by category 133 Table 14.1 Provincial payments and estimates by district and local municipalities 138 Table 14.2 Summary of provincial payments and estimates per cluster by district 140 and local municipality Figures Figure 2.1 Age pyramid for the Western Cape population, 2007 16 Figure 2.2 Lorenz curves for the Western Cape and South Africa between 2000 19 and 2005/06 Annexures Table A.1 Conditional Grants: Information relating to Chapter 5 143 Table A.2 Details of total provincial own receipts: Information relating to 145 Chapter 5 Table A.3 Details of provincial payments and estimates by economic 147 classification: Information relating to Chapter 8 Table A.4 Summary of departmental personnel number and cost: Information 152 relating to Chapter 8 Table A.5 Information on training: Relating to Chapter 9 153 Table A.6 Transfers to local government by category and municipality: 154 Information relating to Chapter 13 Table A.7 Summary of provincial payments and estimates by policy area 155 Table A.8 Payments table summary by policy area 156 Table A.9 Details of provincial payments and estimates by policy area 158 Table A.10 Summary of Expanded Public Works Programme (EPWP) payments 162 and estimates iii Abbreviations ABET Adult Basic Education and Training ACE Advanced Certificate in Education