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Appropriation Bill, now tabled, adds R170m to state spending plan

August 4, 2009

Portfolio Committee on Finance

When presenting his medium term budget statement to the National Assembly on 21 October, Trevor Manuel, minister of finance, tabled at the same time this year’s “mini budget” Appropriation Bill. In it he has called for R170.8 billion to be added to government’s spending plans over the next three years.

This takes the total proposed spending, including any social security funding, over the next three years, to R2.4 trillion.

The Appropriation Bill represents the movement of such funds from the National Revenue Account to the desired state organs in respect of adjustments carried out mid term for the year ending on 31 March 2009. Manuel said that planned government infrastructure investment expansion would continue over the decade ahead, alongside strengthened initiatives focused on job creation and poverty reduction.

Priorities in spending will include the improvement of both the quality of education and skills development to broaden opportunities and raising levels of productivity, and the provision of healthcare “with particular emphasis on reducing infant, child and maternal mortality and broadening prevention and treatment programmes tackling tuberculosis and HIV and AIDS”.

Manuel said government would also focus specifically on the criminal justice system, with key priorities being to further expand police numbers and to invest in investigative capacity, forensic laboratories and enhanced IT network infrastructure. There would be further investment in the built environment to improve public transport and additional focus on meeting targets on universal access to water, sanitation, electricity and additional housing.

Economic growth in South Africa, he said, is expected to be slower in 2008 and 2009 than the 5% per year since 2003. Accordingly, he revised projections downward from 4% (in the February budget) to 3.7% and 3 % respectively.

However, growth prospects will probably strengthen from 2010 (4%) and further improve in the following years. He advised against gloom in terms of such forecasts, saying that South Africa had so far weathered the global financial crisis particularly well.

Additional adjustments will amount to R59 billion over the next three years for higher salaries and other costs associated with the expected rise in inflation and over R60 billion allocated to new programmes or expanded spending on key priorities, including increasing old age, child support, disability and care dependency grants, as well as an expanded public works programme of R10 billion this year and a further R50 billion over the period ahead.

A schedule of appropriations for each government entity or department with breakdowns forms part of the bill.