VOTE 28EDD BUDGET 2011/12

Lwazi Mahlangu

Parliament Research Unit

22 March 2011

1. Contextual Background

2. Policy Priorities for 2011/12

3. Performance and Service Delivery Information

4. Budget Analysis/Expenditure trends

5. Programme Analysis

6. Transfers and subsidies

7. Key Issues for Consideration by Parliament

Overview

• Moderate positive economic growth (2.9% 2010 vs. – 1.8% 2009)

• Contributing factors to GDP• commodity prices• low interest rates• faster global growth

• Key components of GDP (Y) in the 2nd Q2010

(C + I + G + X-M)• Consumption = 4.4%• Government spending = 6.0%• Merchandise Exports = 6.3% • Current Account = -3.6% compared to -4% 2009

1. Contextual Background

GDP since 2000

Real

GDP PPP per capita

• South Africa’s growth has not created significant jobs • low ratio of employment to adult (ages15-64) • South Africa (41.4%) compared to African countries -

Uganda (83%), Rwanda (80%), Tanzania (78%), & Malawi (78%)

• Militancy on the part of trade unions • Impact of labour laws (new amendments)• Lack of development of small businesses

• Lack of infrastructure

Challenges

“Unemployment, Inequality, and Poverty”

• NGP – 10 year plan in unlocking the employment potential in six key sectors and activities

– Infrastructure– Agricultural sector (agric value chain/agro-processing)– The mining value chain– The green economy– Manufacturing sectors – Tourism and certain high-level services

2. Policy Priorities for 2011/12

3. Performance and Service Delivery

Information

Response to the financial crisis:

• Of the IDC R6.1 billion, by Dec 2010 R3.6 billion committed and jobs saved or created were 23 322

• Of the UIF R2 billion (jobs fund), R219 million has been committed

• R2.9 billion training layoff scheme, was a collaboration between EDD, DOL, IDC and CCMA

• As of January 2011, scheme benefited a total of 6351 workers • ITAC - revised timeframes for investigations from 12 to 9 months

for trade remedies• By end of 2009, 750 tons of smuggled clothing and textile ( value

of R90 million) were seized by SARS• ITAC has responded by increasing the tariffs on 35 items of

clothing and textile sector

4. Budget Analysis

Programme

BudgetNominal

Rand change

Real Rand

change

Nominal % change

Real % change

R million 2010/11 2011/12 2012/13 2013/14 2010/11-2011/12 2010/11-2011/12

Administration 45.1 55.0 60.5 63.7 9.9 7.4 21.95 % 16.37 %

Economic Policy Development 18.6 23.3 29.3 30.9 4.7 3.6 25.27 % 19.53 %

Economic Planning and Coordination 374.6 499.9 566.6 599.5 125.3 102.4 33.45 % 27.34 %

Economic Development and Dialogue 11.5 16.3 18.3 19.3 4.8 4.1 41.74 % 35.25 %

TOTAL 449.8 594.5 674.7 713.4 144.7 117.5 32.17 % 26.12 %

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Budget allocations

Administration 45.1 55.0

Economic Policy Development 18.6 23.3

Economic Planning and Coordination 374.6 499.9

Economic Development and Dialogue 11.5 16.3

2010/11 2011/12

Programme as a % of Total Budget

2011/12

Admin = 9.3%

Econ Policy = 3.9%

Econ Plan = 84.1%

Econ Dev = 2.7%

5. Programme Analysis

  Medium-term expenditure estimate

R million        

Programme 1: AdministrationBudget

  2010/11 2011/12 2012/13 2013/14

Ministry 17.4 19.6    

Office of the Director General 4.6 5.8    

General Management Services 23.1 29.6    

TOTAL 45.1 55.0    

5.1 Programme 1: Administration

5. Programme Analysis

  Medium-term expenditure estimate

R million        

Programme 2: Economic Policy Development

Budget

  2010/11 2011/12 2012/13 2013/14

         

Growth Path and Creation of Decent Work 5.2 6.1    

Economic Policy 6.6 8.4    

BBBEE 3.3 6.1    

Second Economy 2.1 2.7    

TOTAL 17.2 23.3  

5.2 Programme 2: Economic Policy Development

5. Programme Analysis

  Medium-term expenditure estimate

R million        

Programme 3: Economic Planning and Coordination

Budget

  2010/11 2011/12 2012/13 2013/14

         

Spatial, Sector and Planning 10.5 16.8    

Economic Development, Financing and Procurement 3.8 5.2    

Investment for Economic Development 162.2 260.1    

Competitiveness and Trade for Decent Work 200.4 217.8    

Green Economy 0.0 0.0    

TOTAL 376.9 499.9    

5.3 Programme 3: Economic Planning and Coordination

5. Programme Analysis

Programme 4: Economic Development and Dialogue

  Medium-term expenditure estimate

R million        

Programme 4: Economic Development and Dialogue

Budget

  2010/11 2011/12 2012/13 2013/14

         

National Social Dialogue and Strategic Frameworks 7.2 11.0    

Sector and Workplace Social Dialogue 0.4 0.5    

Capacity Building for Economic Development 1.7 2.6    

Productivity, Entrepreneurship, Innovation 1.5 2.2    

TOTAL 10.8 16.3  

6. Transfers and subsidies

The Development Finance Institutions

Khula R128.9 million, SAMAF R90.5 million IDC R34.0 million

The regulatory Bodies

Competition Commission R126.6 millionCompetition Tribunal R15.2 million ITAC R69.6 million

TOTAL R464.8 million

Since 2011 has been declared a year of job creation

Parliament has a role in the following (as an oversight

tool):

• Number of jobs created/reducing unemployment • GDP growth • Employment ratio or absorption rate • Households in poverty • Distribution of earned income

7. Key Issues for Consideration by Parliament

Thank You