KZN receives biggest slice of provinces’ budget

2014-02-27 00:00

KWAZULU-NATAL was allocated R78,14 billion in the Budget yesterday, a figure that is lower than last year, but nevertheless it represents the biggest slice of government funds to be received by the provinces.

The Budget Review said yesterday that 97% of the spending by the nine provinces is financed through the so-called equitable division — based on 2011 census population statistics — of revenue from the national government.

The provincial equitable share is expected to grow by an average of 6,7% per year.

For 2014/15, Gauteng will receive R68,67 billion, Eastern Cape R52,15 billion, Limpopo R43,3 billion, Western Cape R35,6 billion, Mpumalanga R29,4 billion, Free State R20,9 billion, North West R24,7 billion and Northern Cape R9,65 billion.

Health, education and social development services account for over three quarters of provincial spending.

“These are labour-intensive services and, as a result, more than 60% of provincial budgets are spent on compensation of employees,” according to the Budget Review­.

Minister Gordhan had written to the premiers and finance MECs, directing them to outline measures to avoid duplication in departments, use assets and leases better and propose other efficiencies.

Provinces spend 40% of their budgets on education, and 30% on health.

Over the next two years, R1,9 billion has been set aside from the human settlements development grant to create an indirect grant to upgrade sanitation infrastructure. Some R180 million has also been added to the grant to accelerate the upgrading of informal settlements in mining towns, on top of the R1,1 billion added for this purpose in the the 2013 Medium Term Expenditure Framework.

Provincial departments of roads, transport and public works made capital investments amounting to R9,8 billion in 2012/13.

The national government would provide R15,2 billion over three years to subsidise provincial bus lines that serve commuters and pupils.

“Over the three-year spending period ahead, provinces are allocated R147,6 billion through direct and indirect grants for infrastructure, mainly for health, education, roads and housing.”

When it comes to local government, only 27% of their income is financed through the divisions of revenue.

The eight biggest municipalities have budgets of R196,9 billion in 2014/15, of which 17% is funded through nationally raised revenue.

In contrast, the 70 most rural municipalities have total budgets of R17,1 billion, 73% of which is funded from national transfers.

Treasury said the new local government equitable share formula meant that over 50% of the 2014/15 allocations for local government would go to the more rural local and district municipalities.

It said in the Budget Review that eThekwini Municipality was conducting 125 internal investigations related to procurement fraud allegations, non-compliance with supply chain management regulations and financial misconduct by employees.

“While much work has been achieved in the roll out of municipal infrastructure over the last decade, significant work remains to be done,” the review said.

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