trends in intergovernmental finances: 2000/01 – 2006/07 01 september 2004
TRANSCRIPT
Trends in Intergovernmental Finances: 2000/01 – 2006/07
01 September 2004
Trends in Intergovt Finances
• Trends in Intergovt Finances is an update on 2003 Intergovt Fiscal Review– Mini-IGFR
• Prov revenue and spending trends from 2000/01 to 2006/07 and municipal budgets in 2003-04
• Past and future budgets (7 years)• Provides consolidated info of municipalities and
provinces– Allows comparison between provinces and
municipalities
• Covers 8 sectors
• 11 Chapter in the document:– Chapter 1: Introduction– Chapter 2: Trends in provincial budgets– Chapter 3: Local government finances– Chapter 4: Education– Chapter 5: Health– Chapter 6: Social development– Chapter 7: Agriculture and land– Chapter 8: Roads and Transport– Chapter 9: Housing– Chapter 10: Water and Sanitation– Chapter 11: Electricity
Document covers
Intergovernmental Fiscal System
• 3 spheres of govt, all with different functions• Biggest budgets at provincial level
– 2004 budgeted non-interest revenue R318,5bn in 2004/05
• National – R120,6 bn or 38,2 %• Provinces – R181,1bn or 57,3 %• Local government – R14,3 bn or 4,5%• provincial share grows to 58,0 per cent in 2006/07
– Provinces draw up their own budgets after national budget
• allocate national transfers (97,1%) plus own revenue (2,9%)• national transfers grows to 97,3% in 2006/07
Provincial budgets
• 2004 Budget consolidated and made comparable by function
• 2004/05 budget R186,7 bn • outer years R204,9 bn and R221,4 bn
– biggest budget KZN R37,8 bn, smallest NC (R4,4 bn)– social services 81,9%– Compensation of employees 47,3%– Capital 6,1% at R11,3bn, to R13,7 bn in 2006/07– Non-compensation non-capex R87,1 bn or 46,6%
• Housing, provincial roads, agriculture, economic affairs, tourism and other admin functions)– R107,8 billion over next three years– positive economic spin offs for provinces– improve the quality of provincial infrastructure
and contribution to EPWP– efficient delivery of other services– contribute to economic growth and job creation
Non-Social Services Spending
• Provinces are budgeting for a deficits of R215m in 2004/05 and surplus budgets in the outer years (R499m and R914m)
• Capital spending growing strongly between 2000/01 and 2006/07– Total prov capital spending (R4,1 bn to R13,7 bn)– Share in total spending also increase from 3,7%
to 6,2%– Education from R553m to R3,5 bn– Health from R1,0 bn to R3,8 bn
Key trends
Provincial Spending2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome
R million
Education 43 739 47 380 53 261 60 326 64 809 69 399 73 714
Health 25 953 29 352 32 802 36 929 40 550 44 154 47 378
Social development 20 894 23 833 32 426 42 444 47 586 55 286 61 880
Total social services 90 587 100 566 118 489 139 699 152 945 168 839 182 972
Contingency reserves – – – – 68 257 101
Non-social services 19 873 22 204 27 421 31 168 33 693 35 773 38 287
Total 110 460 122 770 145 910 170 867 186 705 204 869 221 359
Shares of total provincial expenditure
Social services 82,0% 81,9% 81,2% 81,8% 81,9% 82,4% 82,7%
Education 39,6% 38,6% 36,5% 35,3% 34,7% 33,9% 33,3%
Health 23,5% 23,9% 22,5% 21,6% 21,7% 21,6% 21,4%
Social development 18,9% 19,4% 22,2% 24,8% 25,5% 27,0% 28,0%
Non-social services 18,0% 18,1% 18,8% 18,2% 18,1% 17,6% 17,3%
Total 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0%
Percentage growth
Social services 11,0% 17,8% 17,9% 9,5% 10,4% 8,4%
Education 8,3% 12,4% 13,3% 7,4% 7,1% 6,2%
Health 13,1% 11,8% 12,6% 9,8% 8,9% 7,3%
Social development 14,1% 36,1% 30,9% 12,1% 16,2% 11,9%
Non-social services 11,7% 23,5% 13,7% 8,3% 6,7% 6,5%
Total 11,1% 18,8% 17,1% 9,3% 9,7% 8,0%
Preliminary outcome
Medium-term estimates
Social services share
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome
R million
Social services expenditure as percentage of provincial expenditure
Eastern Cape 82,9% 83,8% 81,2% 80,3% 81,6% 83,6% 83,9%
Free State 81,2% 80,4% 80,7% 82,3% 83,0% 83,7% 83,9%
Gauteng 85,0% 84,4% 80,6% 81,2% 80,2% 80,0% 79,6%
Kw aZulu-Natal 83,6% 84,8% 85,6% 86,0% 86,2% 86,1% 86,8%
Limpopo 79,6% 78,6% 78,8% 79,5% 80,3% 80,2% 80,3%
Mpumalanga 77,5% 74,9% 77,9% 79,5% 80,6% 81,0% 81,6%
Northern Cape 78,1% 75,4% 77,6% 78,7% 75,8% 77,2% 77,6%
North West 76,4% 77,9% 78,6% 79,6% 79,5% 80,9% 81,4%
Western Cape 84,7% 83,8% 82,1% 83,4% 82,3% 82,4% 82,2%
National average 82,0% 81,9% 81,2% 81,8% 81,9% 82,4% 82,7%
Source: National Treasury provincial database
Preliminary outcome
Medium-term estimates
Provincial spending2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome
R million
Current payments 78 816 85 474 95 775 107 111 117 211 125 787 134 130
Of which:
Compensation of employees 63 719 67 777 73 937 80 900 88 302 93 322 98 502
Goods and services 14 995 17 488 21 570 26 031 28 829 32 561 35 560
Transfers and subsidies 27 585 31 164 42 215 53 592 58 116 66 121 73 463
Payments for capital assets 4 059 6 132 7 920 10 165 11 311 12 705 13 665
Contingency reserve – – – – 68 257 101
Total 110 460 122 770 145 910 170 867 186 705 204 869 221 359
Non-compensation of employees 46 741 54 992 71 972 89 968 98 404 111 547 122 857
42 682 48 860 64 053 79 803 87 093 98 842 109 192
Percentage share of total expenditure
Current payments 71,4% 69,6% 65,6% 62,7% 62,8% 61,4% 60,6%
Of which:
Compensation of employees 57,7% 55,2% 50,7% 47,3% 47,3% 45,6% 44,5%
Goods and services 13,6% 14,2% 14,8% 15,2% 15,4% 15,9% 16,1%
Transfers and subsidies 25,0% 25,4% 28,9% 31,4% 31,1% 32,3% 33,2%
Payments for capital assets 3,7% 5,0% 5,4% 5,9% 6,1% 6,2% 6,2%
Contingency reserve 0,0% 0,0% 0,0% 0,0% 0,0% 0,1% 0,0%
Non-compensation of employees 42,3% 44,8% 49,3% 52,7% 52,7% 54,4% 55,5%
38,6% 39,8% 43,9% 46,7% 46,6% 48,2% 49,3%
Source: National Treasury provincial database
Preliminary outcome
Medium-term estimates
Non-compensation non-capital assets
Non-compensation non-capital assets
Provincial capital spending2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome
R million
Eastern Cape 263 416 998 1 755 1 898 2 196 2 349
Free State 126 380 453 578 607 721 764
Gauteng 722 1 192 1 651 2 082 1 850 1 997 1 953
Kw aZulu-Natal 1 044 1 943 1 859 2 404 3 082 3 407 3 611
Limpopo 328 389 650 895 999 1 058 1 113
Mpumalanga 352 498 610 708 809 1 062 1 256
Northern Cape 110 183 250 185 274 302 337
North West 560 401 627 646 787 828 893
Western Cape 555 731 823 912 1 005 1 132 1 388
Total 4 059 6 132 7 920 10 165 11 311 12 705 13 665
Percentage of total expenditure
Eastern Cape 1,4% 2,1% 4,0% 5,9% 6,1% 6,5% 6,5%
Free State 1,7% 4,6% 4,7% 5,0% 4,8% 5,3% 5,2%
Gauteng 4,0% 5,9% 6,7% 7,4% 6,2% 6,1% 5,6%
Kw aZulu-Natal 4,8% 7,7% 6,4% 7,0% 8,2% 8,1% 7,9%
Limpopo 2,3% 2,5% 3,5% 4,1% 4,1% 3,9% 3,8%
Mpumalanga 5,0% 5,9% 6,2% 6,1% 6,2% 7,3% 7,9%
Northern Cape 4,1% 6,2% 7,2% 4,5% 6,2% 6,3% 6,5%
North West 6,1% 4,1% 5,4% 4,8% 5,2% 4,9% 4,9%
Western Cape 4,8% 5,8% 5,7% 5,6% 5,5% 5,8% 6,5%
Total 3,7% 5,0% 5,4% 5,9% 6,1% 6,2% 6,2%1. Excludes capital transfers.Source: National Treasury provincial database
Preliminary outcome
Medium-term estimates
Provincial revenue2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome
R million
Transfers from national 109 223 121 398 136 925 161 532 181 130 199 704 216 344
Of which:
Equitable share 98 398 107 460 123 457 144 743 159 971 173 852 186 392
Conditional grants 10 825 13 938 13 468 16 789 21 158 25 853 29 953
Ow n revenue 4 531 4 942 5 984 6 613 5 361 5 663 5 929
Total revenue 113 754 126 340 142 909 168 145 186 491 205 367 222 273
Total expenditure 110 460 122 770 145 910 170 867 186 705 204 869 221 359
Surplus(+)/deficit(-) 3 294 3 570 -3 001 -2 722 -215 499 914
Share of total provincial revenue
Transfers from national 96,0% 96,1% 95,8% 96,1% 97,1% 97,2% 97,3%
Of which:
Equitable share 86,5% 85,1% 86,4% 86,1% 85,8% 84,7% 83,9%
Conditional grants 9,5% 11,0% 9,4% 10,0% 11,3% 12,6% 13,5%
Ow n revenue 4,0% 3,9% 4,2% 3,9% 2,9% 2,8% 2,7%
Total revenue 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0%Source: National Treasury provincial database
Preliminary outcome
Medium-term estimates
Chapter 3:
Local government finances
Overview
• Covers 2003-04 Budgets & growth since 2002-03:– Total municipal budgets - R86bn, up by 15,3%
– R16,7bn budgeted for capital expenditure, up by 27,5%
– 3 largest municipalities – Joburg (R12,2bn), Cape Town (R10,3bn) & eThekwini [Durban] (R9,8bn)
– Continued real increase in national transfers, up by 39%
– Municipalities displaying varying dependence on transfers from 3% to 92% of budgets
Key Challenges faced
• Personnel costs – Up by 15,2% since 02-03
• Revenue Collection– Outstanding consumer debtors up to R28bn
• Pro-poor policies:– Adequate infrastructure
– Appropriate targeting mechanisms
– Affordability
Reforms within LG sphere
• Municipal Property Rating Act– Broaden rates base
– Harmonise valuation methods to land + improvements
– Municipalities to monitor impact of new system
• Municipal Finance Management Act– Primary legislation governing municipal finances
• Review of LG fiscal framework – inc. equitable share formula & RSC levies
EDUCATION SPENDING
Education spending trends
• Largest share at 34,7% of total budget• Highest share in Mpumalanga (38,9%) and Limpopo (38,2%)• 11,9 million learners and 364 000 teachers (86% of staff) • 27 000 schools
• Total budget - R64,8 bn (2004/05) R73,7 bn (2006/07)– R53,2 billion personnel or 81,6%
• Highest in North West at 86,3%, lowest on Gauteng at 77,2%– Capital rises to R3,0 bn in 2004/0 to R3,5 bn in 2006/07– Public ordinary schools R53,9 billion (83,3%)
• Non-compensation recurrent spending (eg textbooks, LSM)– Rises from R3,8 bn in 2000/01 to R11,3 bn in 2006/07– Per capita spending averaged R5 011 per learner in 2003/04– highest in NC at R6 455, lowest KZN R4 359
Education spending2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome Medium-term estimates
R millionEastern Cape 7 282 7 948 9 268 10 308 10 858 11 820 12 663
Free State 3 025 3 201 3 551 4 087 4 512 4 848 5 145
Gauteng 6 856 7 314 8 129 9 519 9 457 10 044 10 556
Kw aZulu-Natal 8 286 9 384 10 534 12 131 13 184 13 997 15 028
Limpopo 6 463 6 740 7 450 8 258 9 282 9 773 10 413
Mpumalanga 3 027 3 364 3 922 4 529 5 091 5 634 5 981
Northern Cape 974 1 031 1 181 1 305 1 435 1 586 1 668
North West 3 732 3 996 4 416 4 896 5 331 5 691 5 973
Western Cape 4 094 4 402 4 811 5 293 5 659 6 006 6 289
Total 43 739 47 380 53 261 60 326 64 809 69 399 73 714
Eastern Cape 12,3% 7,1%
Free State 10,6% 8,0%
Gauteng 11,6% 3,5%
Kw aZulu-Natal 13,5% 7,4%
Limpopo 8,5% 8,0%
Mpumalanga 14,4% 9,7%
Northern Cape 10,2% 8,5%
North West 9,5% 6,8%
Western Cape 8,9% 5,9%
Total 11,3% 6,9%1. Includes primary school nutrition programme.Source: National Treasury provincial database
Preliminary outcome
Percentage growth(average annual)
2000/01 – 2003/04
2003/04 – 2006/07
Education spending by economic classification
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome Medium-term estimates
R million
Current payments 41 938 44 693 49 471 54 806 59 076 62 989 66 774
Of which:
Compensation of employees 39 381 41 602 45 558 49 607 53 228 55 937 58 962
Transfers and subsidies 1 248 1 719 2 239 3 057 2 698 3 111 3 439
Payments for capital assets 553 968 1 550 2 462 3 035 3 299 3 501
Total 43 739 47 380 53 261 60 326 64 809 69 399 73 714
Percentage change (average annual) 2000/01 – 2003/04 2003/04 – 2006/07
Current payments 9,3% 6,8%
Of which:
Compensation of employees 8,0% 5,9%
Transfers and subsidies 34,8% 4,0%
Payments for capital assets 64,5% 12,4%
Total 11,3% 6,9%Source: National Treasury provincial database
Preliminary outcome
Provincial Education spending by programme
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome Medium-term estimates
R million
Administration 2 470 3 225 3 843 4 304 4 501 4 733 5 052
Public ordinary school education 37 410 39 880 44 672 50 371 53 959 57 684 61 030
Of which:
Primary schools 20 073 21 604 23 733 27 793 29 914 31 679 33 143
Secondary schools 15 802 16 982 19 339 21 007 22 405 24 211 25 859
Other 1 535 1 294 1 600 1 572 1 640 1 794 2 028
Independent school subsidies 206 187 228 269 273 291 309
Public special school education 1 134 1 356 1 418 1 566 1 750 1 895 2 047
Further education and training 827 869 979 1 159 1 325 1 445 1 686
Adult basic education and training 410 401 512 536 600 639 678
Early childhood development 208 268 309 378 444 489 558
Auxiliary and associated services 918 989 1 044 1 438 1 620 1 871 1 979
Other programmes 157 205 257 306 338 351 377
Total expenditure 43 739 47 380 53 261 60 326 64 809 69 399 73 714
Economic classification
Current payments 41 938 44 693 49 471 54 806 59 076 62 989 66 774
Of which:
Compensation of employees 39 381 41 602 45 558 49 607 53 228 55 937 58 962
Transfers and subsidies 1 248 1 719 2 239 3 057 2 698 3 111 3 439
Payments for capital assets 553 968 1 550 2 462 3 035 3 299 3 501
Preliminary outcome
Provincial Education spending by programme (percentages)
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome Medium-term estimates
R million
Percentage of provincial education expenditure
Administration 5,6% 6,8% 7,2% 7,1% 6,9% 6,8% 6,9%
Public ordinary school education 85,5% 84,2% 83,9% 83,5% 83,3% 83,1% 82,8%
Of which:
Primary schools 53,7% 54,2% 53,1% 55,2% 55,4% 54,9% 54,3%
Secondary schools 42,2% 42,6% 43,3% 41,7% 41,5% 42,0% 42,4%
Other 4,1% 3,2% 3,6% 3,1% 3,0% 3,1% 3,3%
Independent school subsidies 0,5% 0,4% 0,4% 0,4% 0,4% 0,4% 0,4%
Public special school education 2,6% 2,9% 2,7% 2,6% 2,7% 2,7% 2,8%
Further education and training 1,9% 1,8% 1,8% 1,9% 2,0% 2,1% 2,3%
Adult basic education and training 0,9% 0,8% 1,0% 0,9% 0,9% 0,9% 0,9%
Early childhood development 0,5% 0,6% 0,6% 0,6% 0,7% 0,7% 0,8%
Auxiliary and associated services 2,1% 2,1% 2,0% 2,4% 2,5% 2,7% 2,7%
Other programmes 0,4% 0,4% 0,5% 0,5% 0,5% 0,5% 0,5%
Total expenditure 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0%
Economic classification
Current payments 95,9% 94,3% 92,9% 90,9% 91,2% 90,8% 90,6%
Of which:
Compensation of employees 93,9% 93,1% 92,1% 90,5% 90,1% 88,8% 88,3%
Transfers and subsidies 2,9% 3,6% 4,2% 5,1% 4,2% 4,5% 4,7%
Payments for capital assets 1,3% 2,0% 2,9% 4,1% 4,7% 4,8% 4,7%Source: National Treasury provincial database
Preliminary outcome
Matric learners and pass rates in Mathematics
Province
Eastern Cape 1 496 3,9% 15 076 39,2% 4 609 12,0% 38 473 55,1%
Free State 1 346 10,8% 6 503 52,3% 1 106 8,9% 12 423 72,1%
Gauteng 6 710 15,7% 19 262 45,0% 3 357 7,8% 42 852 68,4%
Kw aZulu-Natal 5 205 7,9% 26 386 39,9% 6 536 9,9% 66 068 57,7%
Limpopo 1 768 5,1% 10 878 31,7% 2 686 7,8% 34 359 44,6%
Mpumalanga 1 226 6,2% 6 570 33,2% 1 746 8,8% 19 760 48,3%
Northern Cape 395 14,8% 1 682 62,9% 201 7,5% 2 676 85,1%
North West 1 328 6,7% 6 916 34,9% 1 818 9,2% 19 791 50,8%
Western Cape 3 938 17,9% 11 433 52,1% 1 749 8,0% 21 950 78,0%
Total 23 412 9,1% 104 706 40,5% 23 808 9,2% 258 352 58,8%Source: Report on the Senior Certificate Examination, (EMIS, national Department of Education)
Learners passing
LG
Learners passing LG as % of those
that wrote
Learners who
wrote exam
% who wrote
and passed
Learners passing
HG
Learners passing HG as % of those
that wrote
Learners passing
SG
Learners passing SG as % of those
that wrote
Province
Eastern Cape 1 487 6,5% 11 970 52,3% 4 749 20,7% 22 893 79,5%
Free State 1 688 20,7% 4 450 54,7% 953 11,7% 8 139 87,1%
Gauteng 7 070 25,5% 13 952 50,3% 3 047 11,0% 27 733 86,8%
Kw aZulu-Natal 6 124 17,8% 17 052 49,5% 4 415 12,8% 34 472 80,0%
Limpopo 2 522 13,3% 8 258 43,4% 1 681 8,8% 19 017 65,5%
Mpumalanga 1 459 10,8% 6 166 45,6% 2 202 16,3% 13 513 72,7%
Northern Cape 375 23,1% 1 047 64,5% 118 7,3% 1 623 94,9%
North West 1 451 11,8% 6 377 51,8% 1 900 15,4% 12 308 79,0%
Western Cape 3 892 32,1% 6 418 53,0% 1 139 9,4% 12 110 94,5%
Total 26 068 17,2% 75 690 49,9% 20 204 13,3% 151 808 80,3%Source: Report on the Senior Certificate Examination, (EMIS, national Department of Education)
Learners passing
HG
Learners passing HG as % of those
that wrote
Learners passing
SG
Learners passing SG as % of those
that wrote
Learners passing
LG
Learners passing LG as % of those
that wrote
Learners who
wrote exam
% who wrote
and passed
Matric learners and pass rates in Physical Science
Chapter 5:
HEALTH SPENDING
Health services• Strong spending in 2003/04 outcome • Stabilisation of health budgets – real
annualised growth 4.9% over 7 year period • Stabilisation and improvement in health
personnel numbers• Substantial recovery in NPNC expenditure,
including medicines• Strengthening of capital spending and
hospital revitilisation (27 projects)
• Inter-provincial equity improving• Significant increases in spending on primary
health care, emergency medical services• Scarce skills and rural allowances
implemented and backdated to July 2003• HIV/AIDS spending significantly increasing
with implementation of comprehensive programme
• Other pressures: Health inflation; hospitals; PHC function shift
Health services
Health spending trends
• Health 21,7% of total budget declining to 21,4% in 2006/07
• Two types of provinces– those with central hospitals have v high share– those without central hospitals
• Capital R1,0 bn in 2000/01 to R3,8bn in 2006/07• Primary health care (R7,1 bn)• HIV and Aids spending – R60 m in 2000/01 to R2,2 bn
2006/07• EMS spending – R719 m in 2000/01 to R1,6 bn in 06/07
Health spending by programme
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 Average
Outcome Medium-term estimates annual
growth
R million
Administration 959 1 194 1 247 1 539 1 650 1 744 1 836 11,4%
District health services 10 581 11 633 12 758 14 326 16 285 18 403 20 133 11,3%
Emergency medical services 719 793 907 1 284 1 352 1 479 1 572 13,9%
Provincial hospital services 7 272 7 869 8 769 9 929 10 298 10 968 11 940 8,6%
Central hospital services 4 843 5 026 6 003 6 046 6 308 6 546 6 491 5,0%
Health sciences and training 472 652 774 987 1 203 1 285 1 342 19,0%
Health care support services 370 419 510 675 711 772 847 14,8%
Health facilities management 686 1 698 1 770 2 144 2 767 2 983 3 242 29,5%
Other 52 70 64 -1 -24 -24 -25 -11,2%
Total expenditure 25 953 29 352 32 802 36 929 40 550 44 154 47 378 10,6%
Source: National Treasury provincial database
Preliminary outcome
2000/01– 2006/07
Health spending by economic classification
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 Average
Outcome Medium-term estimates annual
growth
R million
Current payments 23 057 25 712 28 926 32 247 35 215 38 131 40 849 10,0%
Of which:
Compensation of employees 16 452 17 812 19 165 21 126 23 175 24 643 26 052 8,0%
Goods and services 6 590 7 886 9 713 11 074 12 033 13 481 14 789 14,4%
Transfers and subsidies 1 869 1 792 2 070 2 127 2 267 2 536 2 757 6,7%
Of which:
Municipalities 899 661 709 743 817 893 1 055 2,7%
Payments for capital assets 1 027 1 848 1 805 2 555 3 068 3 487 3 773 24,2%
Of which:
395 1 230 1 028 1 416 1 792 2 066 2 169 32,8%
Machinery and equipment 630 615 777 1 139 1 277 1 421 1 604 16,9%
Total 25 953 29 352 32 802 36 929 40 550 44 154 47 378 10,6%Source: National Treasury provincial database
Preliminary outcome
2000/01– 2006/07
Buildings and other fixed structures
Health spending per capita
Rand
Eastern Cape 899 89% 795 97%
Free State 1 157 114% 895 109%
Gauteng 1 217 120% 854 104%
Kw aZulu-Natal 1 030 102% 893 109%
Limpopo 773 76% 711 86%
Mpumalanga 789 78% 711 86%
Northern Cape 1 199 118% 935 114%
North West 771 76% 691 84%
Western Cape 1 383 137% 936 114%
Weighted average 1 013 100% 822 100%Source: National Treasury provincial database and 1999 Octoberhousehold survey
Including grants
% of weighted average
Excluding grants
% of weighted average
Public health expenditure trends in 2004 prices,
Figure 5.1 Public health expenditure trends in 2004 prices,
1992/93 to 2006/07
Health personnel numbers by category
December 2001 February 2003 April 2004
Medical practitioners 7 363 7 694 8 146 452
Medical specialists and registrars 3 807 3 571 3 449 -122
Total doctors 11 170 11 265 11 595 330
Professional nurses 41 063 40 846 42 263 1 417
Radiographers 2 058 2 078 2 043 -35
Pharmacists 1 239 1 256 1 336 80
Dental practitioners 625 568 626 58
Physiotherapists 455 667 725 58
Occupational therapists 399 574 611 37
Dieticians 250 378 404 26
Speech therapists 118 215 240 25
Dental specialists 44 63 33 -30
Total 57 421 57 910 59 876 1 966 Source: Vulindlela
Change:February 2003 to April 2004
Chapter 6:
Social Development
Overall Expenditure and Budget Trends
• Provincial spending growing strongly from R21 billion in 2000/01 to R42,4 billion in 2003/04
• An annual average growth of 26,6 per cent• Further accelerated growth over the period
from R42,4 billion in 2003/04 to R61,2 billion in 2006/07
• An annual average growth rate of 13,4 per cent
• Overtaken health as second biggest expenditure item after education
Dominance of Social Grants in Budgets
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome Medium-term estimates
Eastern Cape 90,5% 90,4% 90,7% 89,5% 90,6% 91,1% 91,7%
Free State 81,6% 83,6% 85,2% 85,3% 82,9% 83,9% 84,8%
Gauteng 77,2% 77,4% 80,7% 84,4% 83,2% 84,8% 84,7%
Kw aZulu-Natal 87,4% 88,0% 88,5% 89,1% 87,2% 87,6% 87,8%
Limpopo 91,7% 92,1% 91,8% 90,1% 89,7% 89,5% 90,1%
Mpumalanga 89,6% 89,5% 87,7% 90,0% 90,2% 90,9% 88,2%
Northern Cape 83,8% 82,0% 83,3% 82,0% 78,7% 79,8% 80,8%
North West 92,1% 86,2% 86,9% 86,7% 87,6% 88,1% 89,0%
Western Cape 79,2% 79,6% 81,0% 81,4% 82,2% 83,6% 85,1%
Total 86,5% 86,3% 87,1% 87,4% 87,0% 87,6% 88,0%
Source: National Treasury provincial database
Preliminary outcome
Social Grants Spending• Continued dominance of social grants within social
development budgets as a result of the continuing expansion of the social grants and welfare services for the poor
• Social grants spending is at an annual average of around 87 per cent within all provinces
• Proportions are particularly high in a poor provinces such as EC and MP at around 90 per cent over MTEF
• Especially extension of the child support grant to children up to their 14th birthday, an average annual growth of 87 per cent
• Strong overall growth in grants spending from more than R18 billion to R37,1 billion expenditure between 2000/01 to 2003/04
• This spending grows to R54,4 billion in 2006/07
Social Grants Spending by Province
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome Medium-term estimates
R million
Eastern Cape 3 682 4 216 5 826 7 560 8 286 9 219 10 291
Free State 1 029 1 240 1 789 2 483 2 623 3 052 3 411
Gauteng 2 027 2 337 3 207 4 495 4 769 5 887 6 307
Kw aZulu-Natal 3 789 4 444 6 085 8 168 9 025 10 738 12 154
Limpopo 2 424 2 733 3 936 4 902 5 606 6 695 7 565
Mpumalanga 1 183 1 366 1 788 2 421 2 833 3 296 3 677
Northern Cape 549 573 758 939 877 992 1 117
North West 1 638 1 761 2 322 3 064 3 664 4 398 5 132
Western Cape 1 750 1 899 2 543 3 085 3 701 4 178 4 789
Total 18 070 20 569 28 254 37 117 41 383 48 455 54 445
Source: National Treasury provincial database
Preliminary outcome
Social Grants Beneficiaries• Rapid growth in beneficiary numbers • 2000 beneficiary numbers were more than
2.9 million• By April 2004 beneficiary number more than
7.9 million• An increase of more than 5 million over 5
years• Highest growth in child support and disability
grant beneficiary numbers – more than 4.3 million children by end of April 2004
Social Grants BeneficiariesApril 2000 April 2001 April 2002 April 2003 April 2004
Type of grant
Old age 1 860 710 1 877 538 1 903 042 2 009 419 2 060 421 2,6%
War veterans 7 554 6 175 5 266 4 594 3 961 -14,9%
Disability 612 614 627 481 694 232 953 965 1 270 964 20,0%
Grant-in-aid 8 748 9 489 10 332 12 787 18 170 20,0%
Foster care 79 937 85 910 95 216 138 763 200 340 25,8%
Care dependency 24 438 28 897 34 978 58 140 77 934 33,6%
Child support 352 617 974 724 1 907 774 2 630 826 4 309 772 87,0%
Total 2 946 618 3 610 215 4 650 840 5 808 494 7 941 562 28,1%
Province
Eastern Cape 599 578 722 440 903 975 1 071 448 1 501 031 25,8%
Free State 164 717 205 003 275 018 366 979 503 063 32,2%
Gauteng 359 078 425 615 517 070 701 962 976 533 28,4%
Kw aZulu-Natal 621 494 792 144 1 024 408 1 344 936 1 836 975 31,1%
Limpopo 395 284 491 680 646 972 808 553 1 152 621 30,7%
Mpumalanga 195 655 250 849 314 734 395 636 580 684 31,3%
Northern Cape 90 682 100 271 124 021 138 969 169 102 16,9%
North West 242 938 304 075 411 123 462 418 637 312 27,3%
Western Cape 277 191 318 136 433 520 517 593 584 241 20,5%
Total 2 946 618 3 610 215 4 650 840 5 808 494 7 941 562 28,1%Historical numbers adjusted for the phasing out of the state maintenance grant.Source: Socpen system
% growth (average annual)
Prov Social grants spending
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome Medium-term estimates
R million
Eastern Cape 3 682 4 216 5 826 7 560 8 286 9 219 10 291
Free State 1 029 1 240 1 789 2 483 2 623 3 052 3 411
Gauteng 2 027 2 337 3 207 4 495 4 769 5 887 6 307
Kw aZulu-Natal 3 789 4 444 6 085 8 168 9 025 10 738 12 154
Limpopo 2 424 2 733 3 936 4 902 5 606 6 695 7 565
Mpumalanga 1 183 1 366 1 788 2 421 2 833 3 296 3 677
Northern Cape 549 573 758 939 877 992 1 117
North West 1 638 1 761 2 322 3 064 3 664 4 398 5 132
Western Cape 1 750 1 899 2 543 3 085 3 701 4 178 4 789
Total 18 070 20 569 28 254 37 117 41 383 48 455 54 445
Source: National Treasury provincial database
Preliminary outcome
Percentage of total social development spending
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome Medium-term estimates
Eastern Cape 90,5% 90,4% 90,7% 89,5% 90,6% 91,1% 91,7%
Free State 81,6% 83,6% 85,2% 85,3% 82,9% 83,9% 84,8%
Gauteng 77,2% 77,4% 80,7% 84,4% 83,2% 84,8% 84,7%
Kw aZulu-Natal 87,4% 88,0% 88,5% 89,1% 87,2% 87,6% 87,8%
Limpopo 91,7% 92,1% 91,8% 90,1% 89,7% 89,5% 90,1%
Mpumalanga 89,6% 89,5% 87,7% 90,0% 90,2% 90,9% 88,2%
Northern Cape 83,8% 82,0% 83,3% 82,0% 78,7% 79,8% 80,8%
North West 92,1% 86,2% 86,9% 86,7% 87,6% 88,1% 89,0%
Western Cape 79,2% 79,6% 81,0% 81,4% 82,2% 83,6% 85,1%
Total 86,5% 86,3% 87,1% 87,4% 87,0% 87,6% 88,0%
Source: National Treasury provincial database
Preliminary outcome
Social grants beneficiary numbers by grant type
April 2000 April 2001 April 2002 April 2003 April 2004
Type of grant
Old age 1 860 710 1 877 538 1 903 042 2 009 419 2 060 421 2,6%
War veterans 7 554 6 175 5 266 4 594 3 961 -14,9%
Disability 612 614 627 481 694 232 953 965 1 270 964 20,0%
Grant-in-aid 8 748 9 489 10 332 12 787 18 170 20,0%
Foster care 79 937 85 910 95 216 138 763 200 340 25,8%
Care dependency 24 438 28 897 34 978 58 140 77 934 33,6%
Child support 352 617 974 724 1 907 774 2 630 826 4 309 772 87,0%
Total 2 946 618 3 610 215 4 650 840 5 808 494 7 941 562 28,1%
Province
Eastern Cape 599 578 722 440 903 975 1 071 448 1 501 031 25,8%
Free State 164 717 205 003 275 018 366 979 503 063 32,2%
Gauteng 359 078 425 615 517 070 701 962 976 533 28,4%
Kw aZulu-Natal 621 494 792 144 1 024 408 1 344 936 1 836 975 31,1%
Limpopo 395 284 491 680 646 972 808 553 1 152 621 30,7%
Mpumalanga 195 655 250 849 314 734 395 636 580 684 31,3%
Northern Cape 90 682 100 271 124 021 138 969 169 102 16,9%
North West 242 938 304 075 411 123 462 418 637 312 27,3%
Western Cape 277 191 318 136 433 520 517 593 584 241 20,5%
Total 2 946 618 3 610 215 4 650 840 5 808 494 7 941 562 28,1%Historical numbers adjusted for the phasing out of the state maintenance grant.Source: Socpen system
% growth (average annual)
Chapter 7:
AGRICULTURE AND LAND
Agriculture• Spending on Agriculture rises from R3 billion in 00/01 to
R5,5 b in 06/07 – growth of 10,6%• Provinces account for just under 80% of total sector
spending• Provincial budget grows by 16,9% from R3,2b in 03/04 to
R3,8b in 04/05, rising to R4,2 b in 06/07– spending on personnel account for largest share but
declined from 71,9% in 00/01to 60,4% in 02/03, will further fall to 56,7% in 06/07
– Non personnel spending increases to enhance farmer support programmes including infrastructure
– Additional funds through conditional grant (R750m over 2004 MTEF) to implement a new framework for farmer support – Comprehensive Agricultural Support Programme
Land• Spending on land reform programme increase
from R518 m in 00/01 to R1,3 b in 2003/04 , further rising to R2,2 b in 06/07– Restitution programme account for the largest
increase in spending from R265m in 00/01 to R839m in 03/04, budget to rise to R1,4 b in 06/07
– 60,8% (48,463) claims settled at cost of R3,7 b benefiting 616,429 beneficiaries
– 64% of unsettled claims are urban, mostly in metros– By 06/07 settlement of restitution claims will be
completed
Key Challenges & Initiatives
• Increasing access to farmer support services to enable effective land use– Linking land reform programme with post transfer
farmer support– High spending on personnel but shortage of
appropriate skills mix – Newly settled farmers need access to capital but
difficult to access financial markets– Need to support research on appropriate technology
for small scale farmers • Comprehensive Agriculture Support Programme
provides a new framework to increase farmer support services targeting small scale farmers and land reform beneficiaries
Chapter 8:
TRANSPORT AND ROADS
Overview
• All spheres have some responsibility for – Roads– Public Transport and – Traffic management and safety
• Government spending on roads amount to R9,8 bn in 03/04 – municipalities account for 34,1% (R3 bn) of which
51% is spent by metros– National (SANRAL) 13,1% or R1,3 bn rising to R1,7
bn in 06/07– Provinces account for 65,5% or R5,6 bn– Provincial spending rises to R7,6 bn in 06/07– Maintenance account for 52,3% of prov road
spending
Public Transport & Traffic
• National government spending on transport subsidies increase from R3,2 bn in 00/01 to R5,3b in 06/7– Bus subsidies account for about 45%, and
rail 53%• Provincial spending on public transport rises
from R308 m in 00/01 to R771 m in 03/04, budget to increase to R1,4 bn in 06/07
• National and provinces spent R1,1bn on traffic & safety, with province accounting for 84% or R960m
Key Challenges and Initiatives• Sector is complex & presents challenge
for coordination between spheres– Developing new framework for road sector
to facilitate inter-sphere coordination in planning and prioritisation
– Reforming the current subsidy system which is fragmented and inequitable
– Improve effectiveness of traffic control and management
– NaTIS being upgraded to improve on its current weaknesses
Chapter 9:
Housing
Delivery trends• Delivery to March 2004 – 1,6 million housing opportunities• Audit and clean up of HSS data – issues of reconciliation
between DOH and provincial figures
1999/00 2000/01 2001/02 2002/03 2003/04 Total
Number
Eastern Cape 63 393 20 345 34 021 10 816 58 662 27 119 214 356
Free State 48 434 7 177 16 088 7 005 9 155 16 746 104 605
Gauteng 185 333 45 384 38 547 46 723 24 344 49 034 389 365
Kw aZulu-Natal 149 126 28 997 28 547 14 379 24 485 33 668 279 202
Limpopo 49 750 12 401 20 996 16 667 14 953 15 810 130 577
Mpumalanga 47 595 4 808 16 457 14 584 21 649 21 232 126 325
Northern Cape 13 821 2 600 4 148 2 588 6 056 3 787 33 000
North West 60 631 12 944 14 109 13 885 23 784 10 484 135 837
Western Cape 103 730 26 916 17 730 16 634 20 500 15 735 201 245
Total 721 813 161 572 190 643 143 281 203 588 193 615 1 614 512 1. Historical delivery figures have been adjusted since 2003 as a result of audits carried out in the provinces.Source: National Department of Housing
1994/95 – 1998/99
Expenditure trends• Conditional grant expenditure up by 13,5 per cent from R3,9
billion in 2002/03 to R4,5 billion in 2003/04.• Success of national intervention to unblock constraints to
delivery and expenditure.
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Outcome Medium-term estimates
R million
Eastern Cape 470 305 465 793 599 569 604
Free State 218 252 191 325 386 391 414
Gauteng 610 560 1 147 970 1 117 1 314 1 392
Kw aZulu-Natal 560 665 755 912 748 783 830
Limpopo 272 387 413 442 370 390 413
Mpumalanga 153 309 246 275 296 315 333
Northern Cape 58 65 50 105 89 78 83
North West 262 259 322 364 421 458 486
Western Cape 341 329 348 282 446 447 474
Total 2 945 3 132 3 938 4 468 4 474 4 745 5 030
Preliminary outcome
Understanding the impact of the housing programme
• A Housing beneficiary survey showed:– a notable sense of security, independence and
pride in home-ownership. – Beneficiaries are not satisfied with the quality of
houses or the access to social services and amenities provided in new residential areas.
• Census 2001 showed that while a greater proportion of households now live in formal housing, – the housing backlog has grown and;– more households are also living in inadequate
housing in informal settlements.
Understanding the impact of the housing programme
• The Township Residential Property Markets Study showed that:– 60 to 90% of households living in townships are
not willing to sell their property and – the values of township residential properties have
not increased at the same rate as property values in suburbs.
This means that the asset value of subsidised houses is limited by the absence of a functioning secondary residential property market.
Policy developments and future challenges
• The Second National Housing Summit in November 2003 confirmed the need for partnerships in providing sustainable housing solutions.
• New policy priorities in the housing sector include:– Informal settlement upgrading, – integrated human settlement development, – strengthening partnerships in housing delivery, – extending social housing and rental options and; – greater support for municipalities.
• Housing delivery capacity (particularly municipal capacity) and the institutional arrangements for housing delivery remain a challenge.
Chapter 10:
Water and Sanitation
Overview
• Crucial for improving health, alleviating poverty and facilitating economic development
• Substantial backlogs in water and sanitation• Represents a significant commitment of
resources– National budget allocation is R3,9 billion– Municipal budgets contribution is R6,8 billion– Water boards - approximately R3 billion– Staff complement : 4 200, 19 100 and 6 700
respectively for national, municipalities water boards’, about 30 000 personnel
Institutional & Legal Framework
• Complex sector involving a wide range of organisations– Primary responsibility for water services rests with
municipalities as water services authority (WSA)– DWAF performs functions in both water resources and water
services– Water boards’ are mainly responsible for bulk water
provision
• Complexities has implications for coordination and accountability and capital investment for new infrastructure and rehabilitation
• Institutional reforms are still in early stages and are likely to take several years to complete
Trends in expenditure
• Authorisation of district municipalities as WSA resulted in a substantial increase in their budgeted expenditure
• Transfers by DWAF to municipalities decline by 51,6% as MIG is created on the vote of DPLG
• However, R8,1 billion for water and sanitation available through MIG over the MTEF
• Water boards revenue increase by 5,8%– Operating expenditure increase by 7,2%– Capital expenditure decrease marginally
Chapter 11:
Electricity
Overview
• Electricity, gas and water sectors contribute around 2% of the country’s GDP
• 68% of South Africans had access to electricity by end 2002, compared to 50% in 1995– Largest backlogs remain in rural areas– Progress made in the roll out of free basic electricity in
municipal and Eskom areas
• South Africa rated among cheapest coal and electricity producers and suppliers in the world
• Eskom is projected to run out of excess capacity by 2007– first station to be built in more than 20 years
Reform of generation and transmission industries
• Electricity consists of generation, transmission and distribution
• Reform of the electricity supply industry (generation and transmission) will introduce – Competition by separating transmission from
generation– Private sector participation of up to 30% in the
generation market (10% to BEE)– Original timeframe of 2003 shifted so that necessary
regulatory and governance framework can be put in place
Reform of electricity distribution industry (EDI)
• Arrangements result of historical developments– Both municipalities and Eskom distribute electricity
• Proposed reforms to EDI– 6 regional electricity distributors (REDs) consisting of
Eskom and municipal electricity distribution businesses– 1st RED to be established by 2005 and process to be
completed by 2007
• Local government authorised i.t.o Constitution to reticulate electricity– Municipal buy-in critical to process– Restructuring should not adversely affect municipal
finances
Conclusion
• Building sustainable communities remain a major issue
• Budget choices must balance effective subsidisation of the poor and on one hand creating an enabling environment for growth and development
• There remains a need to assess performance of critical sectors in the provision of public services
• Both local and provincial govts require dedicated capacity building support
• Lack of non-financial information and common methodologies for comparisons in the whole of government remains a concern