Provincial Treasury presented to the Committee on the 2018 provincial and municipal economic review and outlook.
The Finance MEC reported that this was the last budget process leading to the general elections. He further indicated that the budget was R63 billion and the benchmark from the Provincial Treasury for repairs and maintenance was 8%.
The Department stated that it was continuing with the integrated management approach: this is a coordinated and integrated approach to provincial and municipal government planning, budgeting, and implementation and which is spatially responsive to create service delivery impact. The approach was to create public value through budgets that were responsive to the socio-economic environment and were underpinned by the principles of good financial governance. The provincial government was also pursuing with infrastructure-led growth to support socio-economic development and building economic resilience.
Members asked about the maintenance of municipal roads, how unforeseen expenditure would be accommodated and risk factors.
Briefing by Provincial Treasury
Dr Ivan Meyer, Western Cape Finance Minister (MEC), took the Committee through a graph detailing the integrated policy, planning, budgeting and implementation cycle. He noted that the month of August was usually the start of the planning process, and that this was the last budget process leading to the general elections. They were looking at a budget of R63 billion. The benchmark from the Provincial Treasury for repairs and maintenance was 8%. What they had is a diagnostic assessment containing questions and comments raised by the Committee. For proposals and responses to PERO (Provincial Economic Review and Outlook), he indicated they would come back to the committee during the month of November 2018.
Ms Ronel Slinger, Director: Provincial Budget Office, Western Cape Provincial Treasury, briefed the Committee on the responses to be encapsulated in the Department’s Medium Term Budget Policy Statement (MTBPS). This Department was continuing with the integrated management approach: this is a coordinated and integrated approach to provincial and municipal government planning, budgeting, and implementation and which is spatially responsive to create service delivery impact. The approach was to create public value through budgets that were responsive to the socio-economic environment and were underpinned by the principles of good financial governance.
She further indicated the Department was maintaining policy principles of constitutionalism; rule of law; creating public value; partnerships, and citizen-centric approaches. It was also continuing to give effect to the fiscal strategy and budget policy principles. The provincial strategic plan and goals would continue to be reflected in the provincial medium term policy priorities and statement. The provincial government was also pursuing with infrastructure-led growth to support socio-economic development and building economic resilience.
DiscussionMs M Maseko (DA) wanted to understand if it was true that the maintenance of the tarred roads was cheaper than building new roads, and asked if there was a contingency plan for municipal roads.
Dr Meyer admitted it was cheaper and better to maintain roads than to wait until they collapse. Building new roads was an expensive exercise. The Department was trying to maintain existing roads at all times.
Ms Julinda Gantana, Chief Director: Public Finance, Western Cape Provincial Treasury, added there is a shrinking fiscal environment. It was better to invest money in maintenance than building new roads. The budget of municipalities makes a distinction between investment in existing infrastructure and investment in new infrastructure. Provincial Treasury has been advising municipalities on creating a right balance between these two infrastructure investments.
Mr B Kivedo (DA) wanted to find out how unforeseen expenditure would be accommodated seeing there were influx and migration challenges which have resulted in increased population and new houses to be built. He also wanted to know how the lines of communication were between the municipalities and province in terms of what has been achieved because feedback on executed service delivery should be provided to the province by municipalities.
Dr Meyer replied that the Department would return to explain to the Committee on the criteria, formula and calculations for unavoidable and unforeseen expenditure. He had met with the City of Cape Town and there were guidelines that have been formulated on unforeseen and unavoidable expenditure. Population figures from the Education Department have shown that demographic shifts were being taken into consideration when making calculations for adjusting budget. He added there has been a change in the determination of the education equitable share.
Mr Malcolm Booysen, Acting Chief Director: Public Policy Service, Western Cape Provincial Treasury, explained there was constant interaction with the municipalities around integrated work. Disparities were discussed with municipal managers. Municipalities were allowed to present their plans to see if they were aligned to those of the province. Then the municipalities and the province would identify areas that needed to be prioritised.
Ms B Schafer (DA) asked what the government was going to do to counteract risks that would impact on the sector of the economy to ensure reasonable growth of jobs in the Western Cape was created because water and electricity have been cited as risk factors that have been negative for growth during 2013.
Mr Harry Malila, Deputy Director-Genera: Economic and Fiscal Services, Western Cape Provincial Treasury, said they have seen the impact of that in the economy and were acutely aware of the issues and they would come with proposals to the Committee.
Adoption of Minutes
24 August 2018 minutes
The Chairperson took the members through the document, page by page.
Mr D Mitchell (DA) moved for the adoption of minutes.
Ms Schafer seconded the motion.
The minutes were adopted with no amendments.
The meeting was adjourned.
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