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GAUTENG APPROPRIATION BILL 2000/2001

Introduction

Honourable Speaker, Honourable Premier, Honourable Members, Ladies & Gentlemen.

It is with great honour that I present to this House, budget proposals for the 2000/2001 fiscal year.

With the reforms introduced to budgeting in the public sector over the past five years, there is indeed very few surprises or mystery in this budget.

However, with the commitment shown to fiscal discipline over the recent past, we are now in the position to begin to reap the benefits.

Overview of the 1999/2000 financial year

The 1999/2000 financial year has proven to be a landmark year for Gauteng. Our projections show that Gauteng will end the year with a better than anticipated surplus. The spectre of overspending has been effectively dealt with. It is with great pride that I can safely predict that even the department of Health, under the inspired stewardship of my colleague Ms Ramakgopa, will not overspend.

I tabled our main budget estimates in this house last year of R15,7 billion. 90 per cent of the total was set aside for social services, Education, Health and Welfare. We had committed R982 million to capital projects in the province, again with a substantial portion earmarked for schools, hospitals, clinics and roads.

This house appropriated an additional R614 million in November 1999 in the adjustment budget. The total expenditure appropriated for the 1999/2000 financial year was thus RI 6,3 billion. At the time of presenting the adjustment budget, a surplus of R287 million was projected. Expenditure projections are R140 million under budget and we are on target with own revenue collections. The projected surplus is thus R427 million. This has enabled us to speed up the redemption of our debt overhang and in doing so, to free up resources to apply to priority expenditure areas.

Capital expenditure continues to receive focused attention. Projected expenditure for 1999/2000 is R957 million. This reflects a 20 per cent improvement on actual capital expenditure in the 1998/1999 financial year. In total almost 2 800 projects are under way in the province. We have in the process created 3 170 permanent jobs through the maintenance programme, 6 100 direct jobs through major contract works and an estimated 9 150 indirect jobs, an estimated total of 18 420 jobs.

Gauteng has not shirked its responsibilities with regard to policy implementation. We have increased the number of child support grant beneficiaries from 2 000 in March 1999 to 39 000 in January 2000 providing much needed support to the most vulnerable of our children. In total almost 343 000 individuals receive welfare grants totalling R168 million in Gauteng each month.

There are 1,3 million pupils in our classrooms across Gauteng today. Approximately 14 000 patients will be treated at our hospitals and clinics across Gauteng today. It will cost us approximately R33 million to provide these services today. But we do not see that as a cost but an investment, an investment in our people, our crown jewels and our future.

Honourable Speaker, we continue to strive towards our goal of bringing about a better life for all; and a future, where the quality of life of all citizens is enhanced.

Returning, however to the business on hand today, the 2000/2001 budget. In order that the budget is placed in the correct context, I now turn my attention to the economic outlook.

Economic overview

I have the welcome task this year of announcing the implementation of a number of significant initiatives that the Gauteng Province is undertaking with the aim of promoting the regional economy. My task has certainly been made easier through the work of the Minister of Finance, who this week presented what could only be described as a dramatic budget. It is with this positive background that I present the prospects for Gauteng

Economic indicators and prospects

1999 was a year of economic recuperation for the Gauteng economy, following the interest rate shock and economic downturn in the aftermath of the Emerging Markets Crisis in late 1998. Although initial projections predicted recession, or at best a stagnant economic situation, strong recovery on the back of lower interest rates, improved commodity prices and recovering demand in the East resulted in moderate growth for 1999. Preliminary figures show that the South African economy grew at a 1% over 1999. Gauteng's diversified economy is projected to have grown at 1.6% over the same period, slightly higher than the national rate.

Prospects for the future look healthy, with a strong recovery predicted for the next three years as the South African economy is expected to grow at an average annual rate of 3.4 percent. Due to the stronger representation of certain sectors such as the finance and trade, Gauteng's economy is likely to outstrip the projected national growth rate for 2000 of 3.5%, with strong consumption spending boosting the regional economy. Economic indicators are already picking up strong growth in sectors such as retail, and the previously depressed property market. Certainly, with over 55% percent of tax revenue originating from this geographically small, but economically powerful province, the substantial reduction of income tax by R9.9bn will have major, positive implications for disposable income, and hence household consumption in Gauteng.

The positive domestic outlook, and the consequent benefits for Gauteng is underpinned by favourable developments in a number of macro-economic factors. The general upswing in commodity prices, particularly in 'hard' commodities such as base metals, coupled with recovering demand in emerging and other Asian economies, bodes well for export revenue. High oil prices, currently at levels higher than $25 a barrel, remain a worrying inflationary factor. Projections of increased OPEC production towards the second half of 2000 are likely to ease oil prices down to lower levels of between $17 and $22 a barrel, and hence ease pressures off the CPI-X, which stood at 7.4% for 1999, and is predicted lower to 6.8% in 2000.

Investment and savings are critical factors for economic growth. Following the completion of a number of major Parastatals projects in 1998, Gross Fixed Capital Formation slowed down in 1999, contracting by 6.1%. Similar trends were discernible in Gauteng where new capital investment is predicted to have contracted by 1.1% in 1999. South Africa's Gross Fixed Capital Formation will accelerate from 2000 onwards, and is expected to grow at 3% for 2000, rising to 7.1% and 6.2% in 2001 and 2002 respectively. In similar vain, capita! investment is projected to grow robustly in Gauteng, with the Gauteng Province also boosting investment though the formation of the Strategic Economic Infrastructure Investment Fund (SEIIP), which will inject R1.2bn into the region economy over the next three years - but more about that later.

Although Gauteng's unemployment rate is markedly lower at 28.3%, than the national rate of 33.9% (as measured by the 1996 census), joblessness continues to pose a serious problem. Whilst the larger than national representation of sectors with higher employment growth such as trade and finance/business services, and lower representation of declining sectors such as mining, has resulted in a lower unemployment rate, job losses in well represented sectors such as manufacturing remain a serious concern. The tax rebate for SMME's laid out in the national budget, allowing for a corporate taxation of 15% for income under R100 000, is a positive step in acknowledging the growing importance of small business in job creation.

With inflation figures edging downwards, renewed capital flows enabling sharply reduced interest rates, and international investor confidence growing, Prospects for the Gauteng economy in 2000 are favourable.

The Economic Policy Frame work, the Gauteng SDI and the SEIIP

Similar to the Minister of Finance, I also believe that bold efforts are required to foster economic growth. This year marks the culmination of a process years in the making, a process aimed at identifying and targeting areas in the Gauteng economy that will set us on a path for sustainable future growth. Following a period of intensive, detailed economic policy research, we have launched a range of economic infrastructure investments that are set to change the face of Gauteng's economy.

The key component of our economic vision rests on gradually moving Gauteng away from its low-value, heavy industrial base dependant on mining and upstream secondary industries, to a highly dynamic services and high value based economy. The strategic thrusts of our policy are the re-alignment of the manufacturing and other sectors towards higher value added activities, the development of the finance and business services sector, including business tourism, and the development of high tech sectors. We aim to transform Gauteng into the smart centre of South Africa, and to both grow the indigenous high tech industries and promote Gauteng's competitiveness through technological inputs.

In progressing from vision to substance, a Spatial Development Initiative was considered the most appropriate vehicle to spearhead the implementation of the policy findings. Gauteng's SDI is unique in that it is the first SDI that has large-scale provincial financial backing, and follows the dual route that promotes the province as a smart province, whilst retaining; the traditional notion of an SDI as a mechanism whereby public infrastructure can be leveraged to grow the economy. The SDI is a collaborative effort by government in partnership with public enterprises and the private sector.

The Gauteng SDI covers three strategic areas in the regional economy: The need to increase transport efficiencies for both business and commuters, the identification of tourism and cultural heritage, and in Gauteng's case, business tourism, as a strong booster of both economic and employment growth, and the targeting of a number of high tech high value added industrial projects in order to propel the province into the information age. We will focus on critical success factors such as ready access to information, skilled people, effective government leadership as already demonstrated by our Premier in his opening address, and private sector participation. Before I go into the details of each of these projects, I would like to spell out the innovative manner in which we have funds available for these projects.

The Gauteng Provincial Government has set aside R1.2bn over the next three years to invest in the Gauteng SDI. This amount will not affect our budgeted social, capex or personnel spending - prudent fiscal management of our national allocation and accumulated savings has resulted in surplus revenue, which has been allocated for economic infrastructure investment. In order to manage these funds, we have created the Strategic Economic Infrastructure Investment Programme (SEIIP) as a special programme with a separate accounting officer within the Department of Finance and Economic Affairs.

A small, highly skilled team of professionals will be tasked with the overall co-ordination and delivery of the projects. Furthermore, a tender will be run for the procurement of the services of a consortium made up of project financiers, project managers, merchant bankers, lawyers, economists and accountants to work with the Programme Manager in assessing and monitoring projects. In this manner we can attract the levels skills required for a fund of this magnitude, without incurring unnecessary overheads. The SEIIP will begin its work on 1 April 2000, with an allocation of R200m for the financial year 2000/01.

The horizon of the Gauteng province economic vision, as implemented by the SDI and funded by the SEIIP, is a medium to long term one. We are embarking on a long journey, and will not transform Gauteng's economy overnight. The value of the Gauteng SDI lies in the impact on the growth trajectory of the province, and the large-scale creation of highly skilled labour in the long run. We do not intend to do away with low skilled, low income jobs, but rather to create a much bigger pool of, and greater demand for skilled, highly paid workmen and women. In the short run, the implementation of the numerous SDI projects will generate employment. However, the key to the long run transformation of the economy will lie in ensuring that we have appropriately skilled labour. The creation of short-term employment at levels near the breadline will not achieve sustainable growth, nor ensure long-term job creation. We will focus on human resource development, and forge partnerships to ensure that in the long term Gauteng has a highly skilled workforce.

The following ten projects will be implemented through the Gauteng SDI, to be partly funded by the SEIIP over the course of the following three financial years:

* The High Speed Train - A new rapid rail transport system is planned to serve Gauteng's major economic centres of Johannesburg, the Johannesburg International Airport and Pretoria. The area between the two cities, incorporating the Johannesburg International Airport, is by far the most rapidly growing development corridor in South Africa. Considering the increasing road traffic congestion, optimum development of the corridor will not take place without a mass transport system. A pre-feasibility appraisal has been completed and detailed feasibility studies are due to commence in the first quarter of 2000. The feasibility will be completed by the end of November 2000 and will cost about R6 million. The primary objective of the feasibility study will be substantial and detailed consultations with all role-players on the project. This will include local government, parastatals, other transport providers and interested parties. An international tender, given the international interest already expressed on this project, will be issued early in 2001 with the train operational in 2005. The high speed train will not be funded off the SEIIP, but through a B0T arrangement. Preliminary figures indicate a cost of roughly R1.9bn. The infrastructure costs, the tracks and stations will cost roughly R1.2 billion with the rolling stock costing approximately R700 million.

* The Innovation Hub - In partnership with the CSIR and the University of Pretoria (UP), the provincial government aims to increase the "smart" sector's contribution to GGP by new IT and electronics businesses. It aims to do this by supporting the skills and ideas of new, dynamic entrepreneurs. The project is located north-east of Pretoria near the CSIR and the university. Facilities will include sophisticated fibre optic/ISDN infrastructure, an entrepreneurial business support centre, educational support, and an "e-Incubator" with sophisticated research capacity. A budget of R147m over the three financial years has been submitted, of which an estimate R60.6m will be spent in the upcoming financial year. Investments will be targeted at the construction of bulk external infrastructure at a cost of roughly R3m, internal infrastructure, including roads, services and the construction of buildings at RI 5m, a substantial investment in IT infrastructure, the life blood of the GIH, of R24m and Rl7m towards IT implementation and a broad range of operational activities, Expenditure in year 2 is estimated at R34.7m rising to R60m in the final year of roll-out.

* Johannesburg International Airport (JIA) and Surrounds - Africa's busiest airport, JIA is the passenger and freight hub for Southern Africa. Linked by means of road and rail to the City Deep container terminals and to warehousing and cargo movement capacity in the vicinity, it sets the platform for international trade and investment. The airport, and a proposed adjoining IDZ, will allow manufacturers of high-value, low-bulk goods access to international markets. Investment targets are in tourism, transport and freight, electronics and IT, perishables, and in aerospace and avionics. Gauteng has committed to funding infrastructure in the north-east area of the airport area looking at improving the road access around Atlas Road and the communications infrastructure. Gauteng will fund approximately R47 million over a three-year period.

* The City Deep Container Terminal - It is envisaged that this will be an important transport and logistics centre in the province, allowing manufacturers easy and cost effective access to export markets by rail and road through the ports of Durban, Maputo and others. An industrial development zone is planned for this area which will provide manufacturers with direct access to container terminals and inter-modal freight transport services. Investment targets include the freight, transport and logistics industry, as well as manufacturers of transport sensitive products. The key initial investment of R50m will be to construct a Heriotdale off-ramp to facilitate access to and from the terminal. Other infrastructural investments include the establishment of a City Improvement District and a logistics/business support centre.

* Newtown Cultural Precinct - In Newtown, a dedicated implementation agency will take the lead to build a vibrant cultural and creative industries hub to contribute towards the revitalisation of the Johannesburg CBD. Investment projects being promoted are in arts and crafts, jewellery, design, music, film and multi-media production. Besides promoting these investments the agency will concentrate on upgrading existing facilities, and improving the business environment. The infrastructure planned is construction of a bridge connecting Braamfontein to Newtown and off-ramps to provide easier access from the highway. A budget of R85m has been submitted, which includes the construction of a Braamfontein to Newtown bridge and off-ramps, costed at roughly R20m, a traffic management project, Metromall, to facilitate access to the area, costed at R142m for total project cost, of which roughly R50m will be drawn down in year 1, and numerous catalytic investment in the upgrading of existing buildings in the precinct costed at a total of Rl5m.

* The Cradle of Humankind - The Cradle of Humankind World Heritage Site covers over 47000 hectares located in the north-western corner of Gauteng. It is an area that contains a complex of paleo-anthropological sites that have yielded valuable evidence of the origins of humankind. A detailed plan has been drawn up to promote public and private sector investment in a carefully worked out programme to promote environmental, cultural and ecological resource management and to promote the tourism potential of the area. R131,7 million of required infrastructure investment has been identified. Capital improvements will include the construction of additional access roads to link the site with the existing network, at a projected cost of R26m. Bulk infrastructure extension will be required during the initial 10 year horizon, with investments in water reticulation, sewer and effluent treatment, electricity supply, refuse disposal and the purchasing of utility servitudes adding to a total of R36.8m over the period. Construction of the visitor hub is estimated at a cost of R35.8m, the bulk of which will be drawn down in years 2 and 3 of construction. Other infrastructure investment include the construction of a secondary interpretation centre at R7.6m, site specific interpretation at a cost of R2.4m for three such projects, and R2.9m for the development of trails on the site. Following the initial construction of the museum centre, and research and education Centre will be built in years 6 and 7, at a total Cost of R19.3m.

* North Eastern Gauteng Initiative - This initiative aims to establish a biosphere type reserve in the north-east quadrant of the province. The main objectives are to establish a reserve that can accommodate the `Big Five' and to promote a local economy based on eco-tourism and wildlife. A feasibility study has been conducted and eight strategic interventions for implementation have been set in motion. The Provincial Department of Agriculture, Conservation and Environment is managing the project. The key interventions include land use planning and zoning, a Big 5 anchor project to be established over a 5 to 15 year timeframe at a rough estimate cost of R100m, a range of community based projects, the establishment of an advisory centre, and investments in law enforcement and regulation. The private sector has already indicated a keen interest in the tourism potential of this project.

* The Alberton-Germiston Industrial Regeneration Corridor - This area currently hosts a high concentration of manufacturing enterprises, yet it has experienced poor levels of economic growth in the last decade. The project will help firms in the area retain jobs and compete in international markets through upgrading technology, improving productivity and re-investing in the business environment. Collaboration among firms and between business and government is seen as vital for regeneration of industry in the area. The Gauteng province will be investing in the improvement of the physical environment and infrastructure, and the construction of a Manufacturing Advice Centre (MAC), estimated to cost in the region of R5 million in capital costs and a further R5 million in operating costs.

* Rosslyn Auto Cluster - This project aims to further develop an already growing automotive sector by promoting collaboration between firms, promoting technology development and improving skills of the work-force. An important focus will also be investment in the infrastructure and systems for efficient logistics in the automotive sector. We welcome the weekend announcement that Volvo will be manufacturing the S40 at the Ford plant in Rosslyn. This is a further boost to the auto cluster and enhances the potential of a world class automotive industry.

* Constitution Hill - This project is a joint venture between with the departments of Justice, Public Works, the Johannesburg Metropolitan Council and the Gauteng Provincial Government to build the constitutional court and other constitutional committees. It will be located at the old Johannesburg Fort site. The project will be fully integrated into the surrounding areas and will promote access to the public to create a vibrant community oriented environment. Gauteng government will be funding R138m over the three financial years out of a total budget of R716m, spread the three years at R133m in year 1, R228m in year 2 and R354m in year 3. Specific interventions include investing R15m in roads and services, R38m in public space infrastructure, R37m in the conversion of the women's prison to commissions office, R7.3m on the rehabilitation of recreational grounds, including the provision of sports facilities and refurbishment of the Governor's residence at a cost of R8.7m as a public space. Further proposals include the development of a commercial and housing precinct.

An important element of the mandate of the Gauteng Provincial Government is to ensure that the Gauteng economy grows and provides for its people. In Iaunching the Gauteng SDI, and enabling its implementation through the SEllP and the R1.2bn allocation, we show that we are serious about making Gauteng a world competitive, smart province that caters to its people's needs.

Reinventing government

In today's environment where there is a great demand for limited government resources, government has to prioritise its activities and provide services in a cost-effective manner in order to maximise the benefits to its citizens. Therefore there is constant pressure for senior government managers to not only prioritise, but to also improve the service delivery mechanisms.

Accounting officers in government departments are confronted with multiple programmes that need duplicative supporting processes and staff. They are faced with a need to modernise computer systems and telecommunications. They are also faced with increasing pressure to deliver a quality service at the lowest cost.

One way that government can took at solving some of the problems of poor service delivery, is to streamline processes that are not central to the departments' strategic functions or core processes. This is done through bundling some of those supporting processes and non-strategic activities into a separate organisation, which in turn treats the processes and activities as the core of its own business. This concept is known as shared services.

The concept of shared services, simply brings together functions that are frequently duplicated and inconsistent across departments, and provide these services at a lower cost and more efficiently, through a Shared Services Centre. Often these functions are not core to the department and are neglected.

Shared services centre operates as a free-standing business, usually based at an independent location led by a senior executive providing service-minded leadership.

The focus is on delivering customer satisfaction using the benefits of centralisation, such as economies of scale; standardisation of process based on best practice and the provision of a single technology based on maintenance and improvement.

For Gauteng Provincial Government the focus is on achieving efficiency and effectiveness, which will ensure that, we can reduce the cost of providing support services by a significant amount of between 20 to 50 percent. This will allow the province to focus or economic growth opportunities and on improving the quality of social services delivery in the province.

To illustrate the point: Gauteng currently spends about R4 billion per annum on procuring goods and services. If we were to target 5 per cent savings on procurement through the introduction of the shared services centre that will pool our buying power, manage inventory better and through efficiencies, we will realise R200 million per annum. Mind boggling numbers to say the least.

Gauteng Provincial Government Shared Services centre, will be known as Gauteng Business Services. This centre will provide enterprise wide support services, such as financial administration, Human resource management, IT support provisioning and internal audit.

Internal auditing provides an excellent opportunity to articulate the benefits of shared services centres. Section 38 of the PFMA requires that an accounting officer establish a system of internal audit under the control and direction of an internal audit committee. Section 77 provides for internal audit committees to be established for two or more departments if the relevant Treasury deems it to be more economical. Internal audit skills and capacity are scarce in the public sector and in broader South Africa. For each department to establish its own capacity is costly and will stretch an already thin skills base further. By concentrating all our capacity and skills in a shared services centre, we benefit from economies of scale, better utilising of our capacity and providing a consistently high quality service.

The shared services centre will be based on the principles of customer-focused service, using standard processes and common systems. It will be a business support organisation with the aim of providing world class processes and knowledge based services to its customers (departments).

Shared services, is not a centralised corporate function with the "corporate" mentality even though it has similarities. Centralised corporate functions have little accountability for their service and costs. Departments/business units have no choice on the services provided by the corporate function, they take what they get, and have no recourse. In a shared service environment customers/departments are choosers of services and the centre must justify its prices to its customers. Services in a shared service centre are governed by a service level agreement between the parties.

Gauteng has appointed a world leader in shared services. PriceWaterhouse Coopers, in partnership with a consortium of empowerment partners, as our business partner in implementing our shared services vision. An allocation of R25 million is set aside in this budget for the implementation.

The interest generated by our efforts has grown beyond Gauteng, with several provinces interested in learning from our work. The departments of Finance and Public Service and Administration are currently considering the model as one for the whole of government. Clearly, Gauteng leads the way again.

Main features of the 2000/2001 budget

Revenue side

The now familiar budget process and the formula based revenue sharing that occurs between the three spheres of government yields R14,2 billion as the equitable share for Gauteng for 2000/2001. This is projected to rise to R16,1 billion in 2002/2003. Gauteng will receive a further R2,9 billion of conditional grants in 2000/2001. For the first time, due to the sustained efforts of members of this house, the allocation for housing, R718 million for 2000/2001 is included as a conditional grant.

Revenue from our own sources is projected to yield R1,0 billion, that is 6 per cent of the funds available to Gauteng this year. This represents an increase of 8,5 percent from the previous year.

I want to provide this house with further information about our own revenue sources.

Motor vehicle license fees is budgeted to raise R548 million. Motor vehicle licence fees still remain the main source of provincial own revenue, accounting for more than 50 per cent. Licence fees will be increased by 9 per cent as from July 2000.

Patient fees have been held at the agreed levels tabled last year of R75 million. This is the result of the incentive scheme for Health that I announced in my last budget speech Treasury is committed to our challenge to Health. Any revenue collected in excess of budget will be for the account of Health. The early indications are that will have to make good on my undertaking this year.

We have maintained our conservative outlook on gambling and gambling taxes with a moderate increase projected on actual collections. We have budgeted for R270 million from gambling taxes, which however, represents a 27 per cent increase on last year's budget. Gambling has certainty come of age in Gauteng.

Interest revenue has been doubled to R34 million. This is the result of stringent cashflow management instituted by Treasury and the tough fiscal discipline message drilled into departments. The surplus generated for the year has all but wiped out our overspending of the previous years. Our overdraft will have been repaid by the first week of April.

Expenditure side

Revenue from all sources is expected to total R18,481 billion during 2000/2001. We again are proposing that not all revenue be appropriated. The appropriation bill tabled makes provision for expenditure of R18,182.

Social services remain a priority for us with Health, Education and Welfare getting 86 per cent of the total expenditure budget. We propose to maintain this ratio over the medium term. The budget proposals before you allocate R6,1 billion to Health, R6,8 billion will be allocated to Education, and R2,6 billion allocated to Welfare.

Other departments make up the balance of R2,6 billion. Each one of the functions that we as provincial government engage in are equally important, but time does not permit me to list each one separately.

Capital

Capital expenditure has received special attention by Gauteng. The proposals before you further demonstrate our commitment to creating the necessary infrastructure to ensure economic growth and service delivery. In total R1,9 billion has been earmarked for capital projects. This amount includes R718 million housing funds. Excluding the housing funds, R1,2 billion has been allocated for capex, a 25 per cent increase on budget from 1999/2000. These funds are targeted at both social infrastructure in the form of schools, clinics, hospitals, community centres, libraries and housing and economic infrastructure such as roads and the SEllP.

We have widened the net in respect of special capex allocations this year. The departments of Sports, Recreation, Arts and Culture, Agriculture, Conservation and Environment, Welfare and Safety and Liaison have all received targeted capital allocations. Community centres, libraries and police stations will be built over the next year.

R200 million has been set aside to fund the SEIIP for this year with a further R500 million allocated in each of the next two years. As already covered earlier, this allocation is intended to create infrastructure that will shift the trajectory of the Gauteng economy over the medium to long term creating sustained growth and thus jobs.

Special allocations

There are five other special allocations over and above those already covered.

HIV/Aids

HIV/Aids is a serious threat to our country. In keeping with our previous allocations of R47 million in 1998/9 and R36 million in 1999/2000 to combat the spread of HIV/Aids, R38 million is provided to the department of Health to co-ordinate an interdepartmental programme.

Tourism

Tourism is a critical component of the growth trajectory envisaged for the province and indeed the country. To ensure that sufficient resources are available to realise the potential of Gauteng, a special allocation of R25 million is made. R10 million is earmarked for increased marketing initiatives and R15 million on tourism development. Tourism development will include the implementation of the Gauteng Tourism Act.

The new statutory board will be inaugurated in March 2000 and together with the CEO of the Gauteng Tourism Authority, will be responsible for the efficient utilisation of these resources to enhance tourism in Gauteng.

Public Finance Management Act implementation programme

The PFMA is by far the most radical transformation of public sector finance in Africa. Once implemented, the Act brings us in line with best practice in the world. We are on the brink of being at the cutting edge of public sector financial management. However, at present, the Act is but a dream. Resources, both people and finances are needed to turn that dream into reality. We have allocated R25 million to focus on the implementation of the Act and ensure that the dream is realised.

Health financial management

Much has been said and written on health financial management and the management of our health institutions. We have done a lot that we can be proud of in health care. But more and sustained work and effort is required to improve the quality of our care. We have targeted financial management in health for special attention over the next year. R25 million has been included in the health budget as a special allocation for this purpose.

The current lack of capacity arises from both having insufficient numbers of people and shortages of relevant skills in financial areas. Systems to improve financial and asset management are also lacking.

The special allocation is targeted at developing capacity in budget planning and the filling of critical high level financial posts in institutions. Revenue generation is a key area that will receive attention with the incentive system introduced by Treasury playing a driving role. Cost centres will be set up in each institution to ensure proper budget planning and expenditure monitoring. Basic systems to improve stock controls in ail hospitals wilt be implemented and asset management systems looked into.

This funding is not a once on allocation but a programme envisaged to run over the next three years with an annual R25 million allocation.

Traffic policing

In 1998 we had 1 728 fatal accidents, 8 551 serious trauma accidents and 16 521 slightly injured accidents in Gauteng. In 1999, we had a monthly average of 151 accidents causing fatalities, 571 accidents causing serious injuries and 1 604 accidents causing slight injuries. Our Health department spends approximately R400 million per annum treating trauma patients caused by motor vehicle accidents. Drunken driving, speeding and unlicensed drivers are a major cause of road accidents. Overloading on our costs as about R317 million annually. A further R25 million is lost each year in revenue for vehicles that are not licensed. Of the 2,4 million vehicles in Gauteng, about 130 000 have not renewed their licences.

In order to impact on these costs, R25 million is allocated to Transport for traffic poIicing, thereby doubling the budget. This allocation is made for the next three years. This will be utilised to employ an additional 115 traffic officers and properly equip them to carry out their duties. We have agreed a target for 2000/2001 with the department of Public Transport, Roads and Works that we will reduce accidents and reduce costs in all categories mentioned by 10 per cent. We intend to blitz our roads. Zero tolerance on speeding, drunken driving, reckless driving, unlicensed vehicles and drivers. Step out of line and we will throw the book at you.

Clearly the allocations for the SEIIP and the shared services centre are special allocations that fall into this category. These allocations are not once off allocations but are ongoing medium term allocations. However, in order to ensure that these priorities are adequately funded, Treasury has introduced these as special conditional allocations. The conditions are that the funds cannot be utilised for purposes other than those set out. Furthermore, specific targets, goals and outputs are determined for each allocation that has to be met, failing which future funding is jeopardised.

Presentation of budget information

Gauteng continues to break new ground in the presentation of budget information. Today, only the new budget statements that were piloted last year by Gauteng is presented. New government finance statistics (GFS) classification of expenditure is used in drawing up the budget statements.

We have made a first attempt at detailing output indicators for each programme. As can be imagined, this has been a major exercise and a fundamental paradigm shift for the public sector. We acknowledge that the information is not perfect, but we believe that it is the first step, the most important step, in changing the way we manage public sector finances. This is evidence of our implementation of the PFMA.

Acknowledgements

The documents that are tabled today are the end result of almost 10 months of sweat and grind. I will be amiss if did not acknowledge the efforts of those that make this possible.

Each of the heads of departments, their financial teams and programme managers on whom Treasury places sometimes impossible demands, thank you.

My colleagues in the Executive who never shied away from making the tough decisions. This is a collective exercise and we have reached a leve of maturity in Gauteng that is the envy of some first world countries that I have visited. Thank you. The Premier under whose guidance and stewardship we operate, you help create the vision and keep us on course in achieving that vision. Thank you.

Special mention has to be made of the team of the South African Reserve Bank and Stats South Africa, for their work in converting our data into the new classifications. Thank you for the sterling effort.

Finally, my Treasury team under the leadership of Pradeep Maharaj. Their professionalism and skills in managing the process never cease to amaze me. They work at times under the most tying conditions and deadlines. It is incumbent on me to introduce the latest member of that team, the new head of department, Ms Thenjiwe Hlatshwako, a chartered accountant by profession. Her appointment strengthens an already formidable team. In introducing the new member of my team, I also bid farewell to one of our treasures, Mankodi Moitse. She is our second contribution to the Johannesburg Metro. I am sure that we will see marked improvements in financial management in Johannesburg. We wish her well.

Just to share with this house: other members of my team have also moved on - Zakes Dube is now the head of Finance in Mpumalanga and lvan Maswanganye is Chief Director at Stats SA. Gauteng Finance is certainly the training ground for skilled managers.

Treasury's innovations and creativity helps keep us ahead of the pack. I would like to borrow from an unknown source, a quotation:

"Every morning in Africa, a gazelle wakes up
It knows it must outrun the fastest lion or it will be killed

Every morning in Africa, a lion wakes up
It knows it must run faster than the slowest gazelle or it will starve

It doesn't matter whether you're a gazelle or a lion
When the sun comes up, you'd better be running"

That quotation epitomises my Treasury team. My sincere gratitude goes out to each of you.

Conclusion

Honourable Speaker, I today table the following documents for the consideration of the House:

The Gauteng Appropriation Bill, 2000
The Explanatory Memorandum to the Bill,
Budget statements 1,2 and 3
The budget booklet for 2000/2001
A copy of my speech

To end with words from our esteemed President:

'... at no point during its entire history has our country been in a better position to confront the challenges we face than it is today.'

Mr President, we hope that we have outlined just how Gauteng plans to meet those challenges and meet your expectations and those of the citizens of our beloved country.

I thank you.

Issued by the Office of the MEC