The MEC for Finance, Economic Development and Tourism, Abraham Vosloo, tabled the 2022 Northern Cape main appropriation bill in Douglas on Wednesday.
THE MEC for Finance, Economic Development and Tourism, Abraham Vosloo, said drastic interventions would be implemented to reduce the wage bill of state employees during the tabling of the 2022 Northern Cape main appropriation bill in Douglas on Wednesday.
He highlighted how it was necessary to contain spending on the compensation of employees as well as the goods and services budgets.
“In response to the government’s wage freeze directive in the 2020/21 financial year, departments’ compensation of employees’ budgets have been rebased by using the 2021 baseline and adding back 1.5 percent over the medium-term expenditure framework (MTEF) in line with the National Treasury guidelines,” said Vosloo.
He stated that expenditure budgets would be prioritised to stimulate economic growth.
“Therefore, it is necessary for departments to continue to contribute towards maintaining the current wage bill ceilings.
“The 2021 wage agreement included a once-off non-pensionable cash gratuity payment to all public servants in government. Funds are set aside in the 2022/23 financial year to fund the carry-through costs of this cash gratuity in the absence of a new agreement.”
The total budget of the Province over the next three years will amount to R60.3 billion.
“Despite a net reduction of R24 million over the MTEF, an additional amount of R1.8 billion is added to provide for various policy interventions including our response towards the Covid-19 pandemic. In the main, these interventions are targeted at health and education. Furthermore, an additional amount of R367.8 million has been added for the 2022/23 wage agreement.”
Vosloo stated that the net effect of these adjustments on the fiscal framework resulted in a net surplus that was derived from the unallocated wage agreement carry through costs, as well as funds set aside towards the debt redemption strategy.
“The Department of Transport remains the main driver behind the own revenue of the Province with motor vehicle licences being the main collection item.”
He added that R8.9 million would be allocated for infrastructure over the medium-term expenditure framework (MTEF) of which R 2.9 billion would be spent in the 2022/23 financial year, R 2.9 billion in 2023/24 and R3 billion in 2024/25 financial year.
“The Department of Education will be delivering on maintenance at identified schools as well as the construction of additional classrooms and replacement schools such as Oranje Oewer Replacement School, the Petrusville Primary Replacement School, the Carlton van Heerden Replacement School and the construction of a New Kimberley English Medium School.”
Vosloo said the Department of Health would implement maintenance and refurbishment projects at all health-care facilities, finalise construction of the nurses accommodation and facilitate upgrades to the Tswaragano Hospital in the John Taolo Gaetsewe (JTG) )district.
“The Department of Roads and Public Works will continue to provide maintenance to the provincial road network in the Province with a key focus to the roads in the JTG district.
“It is envisaged that through the economic and public sector infrastructure projects identified, approximately 29,200 jobs will be created. We are focusing on creating full-time employment versus short periodic employment opportunities.”
He said all schools, clinics, hospitals and offices in the Province under the leadership of the ANC was proof of quality public infrastructure and social investment.
He stated that R86 million was invested in Douglas Primary School, which can accommodate 968 pupils and 22 educators.
“A multi-pronged approach is being employed by government through various interventions such as the school nutrition programme, substance abuse centre and other programmes that deal with teenage pregnancy… to assist communities and the broader Province in managing these social-ills.”
He added that education and health remained a priority while development plans were central to putting an end to joblessness and poverty.
“Young people and women in particular continue to bear the brunt of obstinate rising numbers of unemployment, which condemns them to unprecedented levels of poverty and squalor. Although our Province has registered some improvement on youth employment, the current state of affairs remains a concern, hence our deliberate efforts on job creation initiatives.”
Vosloo stated that impediments had delayed the establishment of the state-owned construction company that would be located under the Northern Cape Economic Development Agency (Nceda).
“We can confirm that most of the encountered bottlenecks and challenges have now been resolved and implementation will be fast-tracked with the speed that it deserves.”
He indicated that the construction company would be launched before June 2022, once it was registered.
“Over time the company will have self-sufficiency as it will initially be allocated 30 percent of work in a tripartite agreement between user departments, public works and Nceda.”
He added that human resources and financial resources from big infrastructure departments such as education, health, sport and social development would be allocated to the construction company.
He further indicated that all security contracts had been extended for between 18 to 24 months while they were finalising the insourcing of security personnel.
“The first phase entails the creation of a corporate structure in the Department of Transport, Safety and Liaison to facilitate the transition. This will include moving all security personnel already in the employ of government over to the Department of Transport, Safety and Liaison. It is envisaged that once the current security contract ends, the security personnel will be part of the staff establishments of departments with full benefits. This will be done in a phased-in approach, starting with your smaller departments.”
Vosloo estimated that cabinet was set to stabilise its debt levels by 2024.
“Government remains committed to reducing the budget deficit and improving medium-term expenditure framework (MTEF) revenue projections. This has provided us with some fiscal space to finance key spending pressures, including the presidential youth employment initiative.
“Additional resources are earmarked towards solidifying our response towards Covid-19 in the Department of Health.”
He added that the fiscal environment forced government to deal with mismanagement and inefficiencies to allow the system to direct scarce resources in areas of greatest need.
“Non-negotiable priorities include medicines, blood services, learner transport and other core programmes driving our costs in the Province.”
He said funding would be allocated to appoint 740 critical front-line posts during the 2022/23 financial year including educators, officials at district offices and support staff at schools and hostels.
“This commitment will be beneficial to schools in all districts across the Province to ensure quality education is realised.
“Furthermore, as part of the Presidential Youth Employment Initiative, the department is allocated a further amount of R366 million in the first two years of the MTEF.”
Vosloo said Provincial Treasury would observe all proceedings in all government departments.
“Other steps are being taken to ensure that the provincial administration is having an effective and independent internal audit capability, deployed in all the provincial departments. Effective internal audits serve as a deterrent to fraudulent and corrupt practices.”
He stated that the premier was always at the forefront in requesting Provincial Treasury to support law enforcement agencies such as the Special Investigations Unit and the National Prosecuting Authority in dealing with any suspicion of wrongdoing.
“We have taken a conscious and bold decision to improve provincial audit outcomes and to reduce the accumulated unauthorised, irregular, fruitless and wasteful expenditure over the medium-term strategic framework by embarking on a clean audit and good governance drive.
“We cannot talk about clean governance without addressing the non-compliance to laws and regulations that are reaching unacceptable levels and this cannot be tolerated. The cumulative irregular expenditure balance accumulated over a number of years, some of it dating back as far back as 2002.”
Vosloo said the Office of the Premier was assisting in investigations into departments with “a legacy of irregular expenditure”.
“The focus of this co-ordinated approach is on the three departments that are the top three contributors accounting for just over 90 perent of the cumulative irregular expenditure total. The process requires commitment by the targeted departments with providing information of irregular expenditure to expedite the investigation of the transgression.
“We are advocating for the institutionalisation of preventative controls and consequence management to ensure that the current accumulated balance does not further increase.
“Departments will be closely monitored to ensure that they do not accumulate any additional unwanted expenditure.”
He noted that the majority of municipalities in the Province were in serious financial crisis, where they were unable to pay their creditors and third parties.
“The Covid-19 pandemic aggravated the situation, with workers being retrenched, where they were unable to pay for services. The income of municipalities was drastically affected by non-payment.
“Not only revenue was affected but the processes of procurement could not move with speed, leading to delays in spending of conditional grant funding. To circumvent the situation we are looking at an all-inclusive programme of action that will detail tailor-made support mechanisms to our municipalities. This will be accompanied by signing of service delivery agreements between Provincial Treasury and municipalities.”
Vosloo stated that a team of financial experts from Provincial Treasury would assist struggling municipalities.
He reported that they had managed to contain the deficit budget without impacting on service delivery programmes, where finances were reduced to R5.3 billion in March 2021.
“This will ensure that any future additions on the equitable share are directed towards emerging priorities in the Province. Additional resources have been made available in the 2022 framework to deal with specific national and provincial priorities.”
Governance and administration: R4.1 billion
Seed funding for an Information Technology Shared Service Centre (ITSSC), housed at the Office of the Premier: R100 million and R10 million to resuscitate the ITSSC initiative
Government communication strategy: R5 million
Municipal interventions in the Province: R35 million
Caucus Fund: R10 million
Security upgrades and protection of national key points: R4 million
Transfer of Early Childhood Development function from the Department of Social Development to the Department of Education with effect April 1, 2022: R86 million
Department of Education: R410 million
Department of Social Development to support welfare non-governmental organisations: R26 million
Economic Sector: R11 billion
Department of Roads and Public Works for the payment of rates and taxes of municipalities: R20 million
Upscaling job opportunities through the Expanded Public Works Programme (EPWP): R30 million
Northern Cape Economic and Development, Trade and Investment Agency: R10 million
Department of Cooperative Governance, Human Settlements and Traditional Affairs for the Informal Settlements Upgrading Partnership grant: R60 million
Department of Roads and Public Works Provincial Roads Maintenance grant: R29 million