FFC’s RESPONSE TO MTBS 2001 ----------------------------------------------------------------
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FFC’s RESPONSE TO MTBS 2001 ---------------------------------------------------------------- BUDGET COMMITTEE 09 NOVEMBER 2001
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FFC’s RESPONSE TO MTBS 2001 ---------------------------------------------------------------- BUDGET COMMITTEE 09 NOVEMBER 2001. INTRODUCTION. FFC’s overall response to MTBS General Comments per Category Revenue Assignment Expenditure Education Sector Health Sector Welfare Sector - PowerPoint PPT Presentation
Transcript of FFC’s RESPONSE TO MTBS 2001 ----------------------------------------------------------------
FFC’s RESPONSE TO MTBS
2001----------------------------------------------------------------
BUDGET COMMITTEE
09 NOVEMBER 2001
INTRODUCTION
• FFC’s overall response to MTBS• General Comments per Category
– Revenue Assignment– Expenditure
• Education Sector• Health Sector• Welfare Sector• Local Government
– LG Revenue • Provincial Infrastructure
• Analysis of Provincial Expenditure as per IGFR expenditure 1997-2001 for CMBS
• Analysis of MTBS 2001-2004 Macro Trends and Projections
GENERAL COMMENTS
• Real growth in nationally budgeted expenditure – stimulatory fiscal policy
• Tax: GDP ratio projected to remain constant but increased room for deficit financing for municipal and provincial spheres
• Contingency reserves
SOCIAL SERVICES
• Real increases enable progressive realization but shift towards infrastructure in allocations.
• Provinces spending on CMBS increases to 72% of PES
• HIV/AIDS and ECDP conditional grants
LOCAL GOVERNMENT
• Significant increases in LES and conditional grants for municipal basic services. Own revenue raising potential high but threatened by electricity restructuring. Personnel spending could rise disproportionately with amalgamations and function shifts.
ANALYSIS OF THE NATIONAL BUDGET
Financing the National Budget Counter-cyclical fiscal and monetary policy Tax: GDP ratio projected constant. Deficit financing to rise.
Debt-servicing costs decline over short- to medium-term. Contingency reserves for risk management
Vertical Division of Revenue
Relative shift to local and national government infrastructure programs
ANALYSIS OF PROVINCIAL BUDGETS
Financing Provincial Budgets
Provincial surpluses continue Reliance on transfers from nationally-raised revenues increasing
Expenditure Trends Real growth in all sectors but relative shift to infrastructure and welfare
Constitutionally Mandated Basic Services
ANALYSIS OF MUNICIPAL BUDGETS
• Metropolitan municipalities most self-sufficient. Other urban and especially rural municipalities are most reliant on LES and conditional grant transfers.
• Sharp real increase in LES and conditional grant transfers.
-
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
1997/98 1998/99 1999/00 2000/01 2001/02
Series1
1997-2001 TRENDS IN THE PROVINCIAL EQUITABLE SHARE
ProvincesR ('000) 1997/98
R ('000) 1998/99
R ('000) 1999/00
R ('000) 2000/01
Overall Percentages
ShareEastern Cape 14,337,775 14,491,840 15,238,337 16,749,624 17%Free State 5,767,389 5,610,466 5,917,643 6,536,235 7%Gauteng 13,491,413 12,077,227 12,931,659 14,517,183 15%KwaZulu-Natal 16,264,370 15,979,129 17,168,556 19,241,488 20%Mpumalaga 5,029,270 5,366,699 5,789,859 6,539,827 7%Northern Cape 2,045,263 2,011,968 2,131,297 2,341,651 2%Northern Province 10,808,964 10,772,538 11,506,052 12,866,332 13%North West 6,939,334 7,033,359 7,411,956 8,158,360 8%Western Cape 9,161,864 8,199,006 8,499,193 9,235,141 10%Total 83,845,642 81,542,232 86,594,552 96,185,841 Percentage Growth -2.8% 5.8% 10.0% 4.3%
CONSTITUTIONALLY MANDATED BASIC SERVICES (CMBS)
Provinces 1997/98 1998/99 1999/00 2000/01Average
1997-2001
EC 8,255,140 9,346,745 11,371,046 12,345,437 17%FS 3,740,831 3,879,988 3,896,312 4,267,506 6%GP 7,876,884 8,340,345 8,752,104 9,734,989 14%KZ 11,902,107 12,114,717 12,629,861 14,528,851 21%MP 4,086,223 4,154,360 4,519,337 4,852,564 7%NC 1,498,587 1,597,419 1,676,431 1,705,637 3%NP 6,598,849 7,268,010 8,389,095 9,240,219 13%NW 4,442,391 4,850,905 5,197,129 5,955,704 8%WC 6,129,776 5,984,166 6,081,212 6,395,974 10%Total 54,530,788 57,536,655 62,512,527 69,026,881 100%Percentage Share of PES 65% 71% 72% 72%Percentage Growth 5.2% 8.0% 9.4% 7.5%Real growth 3,005,867 4,975,872 6,514,354
• Basic Education = Public Ordinary School Education and Education in specialised schools, Independent ordinary school education• Basic Social Welfare = Social Security and • Primary Health care = District health care services
CAPTURING CMBS
INTER PROVINCIAL CMBS SPENDING
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2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
EC FS GP KZ MP NC NP NW WC
1997/98
1998/99
1999/00
2000/01
INTER-PROVINCIAL SPENDING TRENDS ON CMBS
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
1997/98 1998/99 1999/00 2000/01
EC
FS
GP
KZ
MP
NC
NP
NW
WC
BASIC EDUCATION
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
1997/98 1998/99 1999/00 2000/01
Eastern Cape
Free State
Gauteng
Kw aZulu-Natal
Mpumalaga
Northern Cape
Northern Province
North West
Western Cape
PRIMARY HEALTH CARE
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
1997/98 1998/99 1999/00 2000/01
Eastern Cape
Free State
Gauteng
Kw aZulu-Natal
Mpumalaga
Northern Cape
Northern Province
North West
Western Cape
SOCIAL SECURITY
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
1997/98 1998/99 1999/00 2000/01
Eastern Cape
Free State
Gauteng
KwaZulu-Natal
Mpumalaga
Northern Cape
Northern Province
North West
Western Cape
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