R3 billion knocked off GP budget
The fiscal consolidation and cost-cutting measures announced in the national budget are starting to trickle down as Gauteng is expected to experience a R2.9-billion cut in its budget.
This was unveiled in the Gauteng 2016-2017 provincial budget presented in the legislature yesterday.
Finance MEC Barbara Creecy said the equitable share of the province would be cut by R2.9-billion over the next three years as a contribution to Finance Minister Pravin Gordhan's R25-billion cuts.
In his speech Gordhan said the budget deficit would be reduced to 2.4% by 2018-2019.
The expenditure ceiling will be reached mainly by curtailing personnel spending.
Gauteng only gets 5% of its revenue from its own operations and the rest is received from Treasury.
Most of this revenue comes from car licences, gambling taxes, patient fees and interest earned on investments.
Creecy announced cost containment measures aimed at reducing expenditure on non-core items.
"In order to accommodate cuts in the equitable share and prioritise spending on quality services for our people, we must save money on non-core activities," said Creecy.
A circular will be sent to all departments stipulating cost-cutting measures that include limiting travel, accommodation, and catering and telecommunications contracts.
The office of the premier and the provincial treasury will also assess head counts to ensure that positions not linked to service delivery are abolished.
Despite the cost-cutting measures, Gauteng has retained an increase in expenditure in education, health and infrastructure.
The province will spend R41.6-billion over the 2016 medium-term expenditure framework on infrastructure.
- Education's allocation increased by R2.63-billion to R39.06-billion;
- The health budget increased by R2-billion to R37.4-billion;
- Human settlements department was allocated R5.8-billion;
- Roads and transport increased 7% to R7.3-billion;
- Social development received R4.2-billion;
- Sports, arts, culture and recreation received R821-million; and
- Community safety was allocated R718-million, an increase from R652.8-million.
To further weather the low economic growth, Gauteng committed to ensuring that it paid all municipalities in the province and ensured their sustainability.
An additional R1.2-billion was given to the department of infrastructure development to provide for payment of rates and taxes to municipalities over the next three financial years.
Creecy also announced a cash injection of R1.3-billion to be allocated to the department of economic development to drive growth in the province.
This amount includes R195-million set aside to enhance local economic activity by establishing and refurbishing existing industrial zones in townships.
Provincial government will also expand its open tender system, which allows the public to view the adjudication of government con-tracts.