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Honourable Speaker
The Premier
Honourable Members
Distinguished Guests
Ladies and Gentlemen

It is with pride that I place before this House the adjustment budget proposals for the 2003/04 financial-year.

Once again, we table the adjustment budget at an appropriate period in the financial year, to ensure that the necessary adjustments to the main budget are effected in time to influence actual delivery and spending.

MAIN FEATURES OF THE ADJUSTMENT BUDGET

The following adjustments to the main budget are placed before this House for consideration within the framework provided by section 32(2) of the Public Finance Management Act - PFMA (Act 1 of 1999:

Revenue side: National allocations

The provincial fiscal framework for 2003 has been revised to cater for the following:

a. Personnel related pressures due to higher than originally budgeted public sector wage settlement and;
b. Higher than anticipated take up rate in social security grants beneficiaries.

Gauteng has been allocated an additional R 477 million in this regard, which caters for:

* Funding for the adjusted salary settlement amounting to R38 million
* R78 million has been allocated to cater for the increase in the take up rate for the Extension of Child Support Grant.
* R361 million has been allocated to cover spending pressures in welfare resulting from the increase in the take up rate for the Child Support Grant and disability.

Provincial Sourced Revenue

The own revenue budget for the 2003/04 financial year remains unchanged at R1.4 billion.

Expenditure side

The additional appropriations sought by the Bill tabled here today are done within the criteria set out in the PFMA.

Adjusted salary settlement

The departments of Health and Education has been allocated an amount of R111 million, to cater for the difference between this year's wage agreement, effected from 1 July, and the assumed increase at the time of preparing the budget.

Welfare grants

When the 2003 Budgets were put together, certain assumptions were made around growth in beneficiary numbers. Current trends in actual beneficiaries (as at September 2003) and projections for the remainder of the financial year indicate that the growth in beneficiaries is higher than previously anticipated. This is due mainly to the sharp growth in disability and child support grants were growth of 40% in beneficiary numbers have been experienced.

An additional amount of R439million has been allocated to Department of Social Service and Population Development.

Suspensions and virements

Sections 31 and 42 of the PFMA provides for the shifting of funds between departments and within Votes. The following shifts have been accommodated in the Adjustments Bill:

a. R86million has been suspended from various departments to GSSC to cater for the transfer of staff (migration) to GSSC.
b. R23.6million has been suspended from Health to various departments in respect of HIV/Aids provincial conditional grants for financial year 2003/04.
c. R28.7million has been suspended from DACEL to Department of Transport and Public Works for implementation of capital projects and R690,000 suspended from DACEL to the Department of Education for schools cleaning up campaigns
d. R24 million has been suspended from Department Social Services for new facilities, upgrading and maintenance.
e. R1.3 million has been suspended from Department of Finance & Economic Affairs to DACEL for the implementation of the Blue IQ projects.

Other Additional allocations to departments

The Provincial Executive Council has approved additional funding amounting to R186.5million, which has been allocated to cater for spending needs in the following departments:

* An amount of R10.1 million was allocated to Legislature to cater for the City Hall Building.

* As part of the implementation of the revenue incentive scheme for the Department of Health, an amount of R46.7 million will be appropriated. This is the amount by which a target for collection of revenue in financial year 2002/03 was exceeded.

* The Department of Education has requested for funds to write off irrecoverable debts amounting to R41.6 million. These irrecoverable debts are as a result of student teachers who were offered bursaries and did not work with the department after completing their studies due to a moratorium on the filling of posts and ex-employees that have been reported by the state attorney's office as untraceable.

* R10.2 million is allocated to Development Planning and Local Government for the establishment of Community Development Workers to ensure effective and efficient service delivery.

* An amount of R3.7million has been allocated to Safety and Liasion for the lease of 25 BMWs for the highway patrol fleet for Gauteng.

* An additional R1.2 million has been allocated to Agriculture, Conservation, Environment and Land to deal with costs related to the fire at their building.

Roll-overs

A total amount of R 327.7 million included in the adjustment budget is attributable to rollovers approved by Treasury in accordance with the criterion contained in the Public Finance Management Act. The major portion of the roll-overs cover committed capital expenditure and unspent conditional grants

Conclusion

We table before this House today, an Adjustment Appropriation Bill totalling R760.5million

This will bring provincial expenditure for the year to R27.79billion.

Acknowledgements

In closing, I would thank the Premier and my colleagues in the Executive for their support and understanding.

Thank you to my Treasury team in managing the process of putting together all of the documents for this adjustment budget.

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

* The Gauteng Adjustment Appropriation Bill 2003
* The Explanatory Memorandum to the Bill
* The Adjustment Budget Statement, 2003/04
* A copy of my Speech

I thank you.

For more information contact Saras Naidoo on (011) 355 8481 or 082 774 0245

ISSUED BY THE DEPARTMENT OF FINANCE AND ECONOMIC AFFAIRS, GAUTENG PROVINCIAL GOVERNMENT

For media releases, speeches and news visit the Gauteng Provincial Government website at www.gpg.gov.za

13 November 2003