The Western Cape has undoubtedly benefited from the current good fortune of the South African economy. The 2006 Provincial Economic Review and Outlook (PERO) indicates that real GDP growth in the region reached 5,3 per cent in 2004/05. In the same fiscal year, total output in the Western Cape contributed 16,0 per cent of South Africa's GDP. Based on current trends, the provincial economic growth is set to maintain its high pace of 5,3 per cent in 2005/06 and then average 4,8 per cent a year over the medium term.
Given the potential we encompass, we must set our expectations high and aim for above-average growth by getting those difficult things in place, both provincially and locally, which will allow us to reach and maintain the target of an annual 6-8 per cent shared growth rate within the next three to four years. Within the public sector, this is going to require a great deal of political leadership to see this through, as it asks politicians and private sector investors, amongst others, to think far beyond the horizon of their current term of office and to consider the type of legacy they wish to leave behind.
Shared growth means that we must ensure that the gains from higher economic growth reach the poor, as we cannot afford to contribute to greater income inequality in this country, nor this province. As I noted at the tabling, these ideas are at the core of the Western Cape's Budget 2006/07.
This Budget provides for expenditure totalling R18,4 billion in 2006/07, representing a nominal increase of 12 per cent from 2005/06. Today I wish to first remind ourselves of the four main themes of the 2006/7 Budget tabled in this chamber on 17 February. I do this by highlighting developments since then, in order to contextualise our debate on the budget in this Chamber.
Speaker, over the last three weeks, my colleagues MEC Essop and MEC Dyanti and I have led a provincial team from Treasury, Economic Development and Local Government to visit each of our 30 municipalities including the Metro. The immediate purpose of the engagements was to assess the draft municipal budgets in terms of our MFMA responsibilities and to consider whether these adequately reflect the evolving municipal IDP's and LED strategies. In other words, we asked: Is there a credible link between the medium term municipal strategic plans and the 2006/07 municipal budgets? In many cases we were pleasantly surprised, and gained much from this exposure, auguring well for the future development of this Province.
But more so, the exercise was an illuminating and productive two-way exchange between our spheres of government on the constraints and imperatives for real economic growth and development in our province. Our chances of success with ASGISA, the Ikapa Elihlumayo strategies, and the emerging Provincial Growth and Development Strategy (PGDS), fundamentally depend upon our municipalities as building blocks for growth and development. If we are to achieve an aggregate level of 8 per cent growth in this province, local governments must be empowered - with the required leadership and technical capacity, and the appropriate national and provincial assistance - to generate the required resources to properly carry out their core responsibilities of providing and maintaining bulk infrastructure; supplying basic services; and boosting local economic development.
My two colleagues, MEC's Dyantyi and Essop will expand more on this with respect to their portfolios when presenting their votes to this House.
The April/May provincial-municipal engagements additionally served to reinforce key elements which the 2006 Provincial Budget seeks to address. First, we saw that although economic growth is apparent at the local level, we are also seeing growing poverty, income disparities, and unemployment in our municipalities. Challenges of rising drug-related crime, high TB and HIV rates, and illiteracy are also common to many areas of the Western Cape.
The 2006 PERO, released since the tabling of this Budget, tells the same story. The research it contains provides the economic backdrop and reinforces the objectives expressed in this budget. It shows that all individuals in the province experienced an increase in their per capita expenditure over the five-year period from 1995 to 2000, but the per capita of the poorest group grew the most slowly. Clearly the gains and pains of economic trends are not felt equally among us.
The second clear message which emerged from the provincial-municipal engagements, was that our bulk infrastructure at the local level is under severe strain, as seen from the perspective of our nascent Strategic Infrastructure Plan under development by MEC Fransman. If government doesn't focus on building infrastructure, our water, sanitation and electricity systems will become over burdened due to population and economic growth and will subsequently become serious constraints to growth and development.
We must make sure the bulk infrastructure is put in place by our local government partners so that we can unlock that economic potential and share its benefits, particularly in areas where viable and sustainable economic opportunities exist. Furthermore, this investment in bulk infrastructure is required to prevent sanitation problems, severe environmental degradation and river pollution with all its concomitant detrimental social and economic hazards. This could most likely require a different approach to augmenting municipal budgets through the MIG and local equitable share arrangements.
Through its four themes, the 2006/07 Budget addresses these core issues, in alignment with national and municipal priorities. Let me now recap the main points of the 2006 Western Cape Budget and what it will buy:
Developing the educational and skills base is a central priority for South Africa and the first theme of this Budget. The PERO provides further evidence of the unemployment situation in this province and the particular skills shortages we confront in the Western Cape. It shows that we are confronting a clear mismatch between the skill levels required in the workplace, and the levels of educational attainments and skills of our school-leavers and young graduates.
The Human Capital Development Strategy, launched in March, provides the Province with an overall plan for improved education and skills development. In meeting this challenge the Department of Education receives 38 per cent of the total provincial Budget-that is R7 billion, or R728 million more compared to Budget 2005.
The need to ensure that all learners have access to good quality education and skills opportunities is central to ensuring that all South Africans are able to participate and benefit from the economic growth gains that our economy is currently experiencing. Furthermore, it is only by providing a solid foundation in the area of human capital, that we can place the economy on a sustainable higher economic growth path.
The main areas that the Department of Education will concentrate on in 2006/2007 are:
- Improving access and equity by declaring the poorest quintile of our schools no-fee schools and ensuring more learners have access to quality Grade R programmes;
- Taking steps to make schools safer, build new schools and provide better equipment in existing schools;
- Re-capitalising our FET colleges; and
- Improving the quality of our education outcomes, particularly in the areas of mathematics, science and technology by strengthening schools and their link to skills development and the labour market.
Growing the economy and providing employment opportunities forms the second overall theme of this year's budget. The Department of Economic Development and Tourism receives R188,433 million in 2006/2007, which is R43 million, or 30 per cent more, than was budgeted last year. The Department will proactively support sector strategies in those areas of the economy that have high potential to create jobs and foster Broad Based Black Economic Empowerment. Key sectors for support include: business process outsourcing; the ICT industry; film; creative and craft industries; clothing and textile; oil and gas; metals and engineering; agribusiness; fishing and aquaculture.
The goal of accelerated and shared growth calls us to make interventions which can ensure that all our people have access to the opportunities offered by economic growth and can share in its benefits. To achieve this, the Department will play an active role in building bridges between the first and second economies. The RED Door centres help provide the business support services that small businesses require so that they can get the advice and support they need to grow and develop. Similarly, the support offered to local economies through the 'Plek Plan' will assist municipalities to finalise their local economic development plans and to start moving on implementation.
To play its role in facilitating the increased participation of previously marginalised actors in the agricultural sector, the Department of Agriculture receives R254 million in 2006/07, which is R15,8 million more than what was budgeted in 2005/06. Over the MTEF, the extra resources will be used to increase access to water for new land reform beneficiaries and to improve water use; as well as to build capacity and improve skills in the sector. Skill development initiatives include technical training programmes for farm workers; programmes to recognise prior learning; and financial support for children of farm workers to study at Elsenburg College.
As part of government's job creation and skills development strategy, this year the Expanded Public Works Programme will be rolled out in the social sector. An amount of R53 million in 2006/2007 is allocated for the expansion of services for Early Childhood Development as well as Community Home-Based Care Workers and Community Health Workers. We have learned that the success of our EPWP programme, whether in the social sector or with roads or construction projects, is dependent on us striking the correct balance between short-term poverty relief, medium-term skills development, and longer term expansion of services and the creation of essential infrastructure. Right now our EPWP projects pursue dual aims: the goal of skills development and employment creation, alongside the goal of infrastructure and service expansion. We therefore must work to reach a consensus and common understanding on what constitutes EPWP projects, and when and how labour-intensive methods are best applied.
As I already alluded to earlier, the right type of physical investment at the right time and in an optimal location has the power to improve social and environmental conditions, open up economic opportunities and reduce costs for businesses (particularly start-ups) in the Western Cape. Physical investment is therefore another critical part of our provincial strategy for achieving shared economic growth. Total infrastructure spending, across all departments, is budgeted to reach R2 billion in 2006/07 - 21,6 per cent higher than in the 2005/06 Budget.
We also know that transport infrastructure is a crucial constraint to our growth and development in this province and must be addressed with urgency and sound planning. Good infrastructure enables the timeous and affordable movement of people and goods across areas, connecting economic nodes in the space economy of the province. Allocations for transport infrastructure on the budget of the Department of Transport and Public Works total R2,1 billion in 2006/07 - a 21 per cent increase compared to what was originally allocated to the Department for 2005/06. The Province has prioritised expenditure on roads and protected that priority through earmarked allocations which amount to R3,5 billion over the MTEF. Key highway infrastructure will be upgraded to allow better connection with the rest of the province and to accommodate dedicated public transport lanes, especially relevant to hosting 2010 FIFA Soccer World Cup. Extra funds for public transport will be used to restructure the public transport network in the metro area in partnership with the City; to improve public transport in large towns in the province; and to address safety and regulation enforcement in the sector.
Supporting families and communities forms the third theme of the 2006 Budget. The hope of a "Home for All" cannot be realised in a society characterized by broken families, discrimination, crime, poverty and poor health. The Social Capital Formation Strategy (SCFS) with an emphasis on youth is an attempt by the Western Cape government to address these social ills. In alignment with national priorities, the SCFS aims to strengthen social cohesion by creating safer and healthier communities, strengthening networks, and increasing access to government services and information.
In 2006/07 the Departments of Health, Social Development, Cultural Affairs and Sport and Community Safety will together spend R7,420 billion, including expenditure to accelerate and expand their SCFS programmes.
In 2006/07 the Department of Social Development will continue working with non-governmental organisations to support, protect and equip our most vulnerable groups-women, children and youth-to participate in economic activities and opportunities. It will begin work to implement the Children's Bill and the Child Justice Bill, as well as the Older Person's Bill as soon as they are passed. Additional amounts of R4,8 million have been given in 2006/07, R34,6 million in 2007/08 and R72 million in 2008/09, for the progressive realisation of these three bills to protect our children and the aged.
As substance abuse appears to be on the rise throughout the Province, initiatives will be strengthened to reduce the supply and demand for drugs and make quality treatment available to those who seek it. The Department of Social Development is adding 40 per cent to its substance abuse budget to a total of R32 million in 2006/07. One thousand community-based fieldworkers will be recruited to support substance abusers after their first phase of rehabilitation, to assist them to avoid relapse. The Department of Health has set aside R1,6 million for the upgrade and expansion of detoxification facilities at Stikland Hospital.
The Department of Community Safety has joined forces with the Western Cape Department of Education to create a safer environment at schools. An extra R6,7 million has been provided this year to deploy 500 volunteers to schools most at risk. The focus will be on enhancing security at the same time harnessing community energy and promoting participation and social networks.
When it comes to motor vehicle accidents on our roads, our fatality and injury rate remains unacceptably high in the Province. Community Safety in liaison with municipalities and the Departments of Transport and Public Works and Health, will implement the Motor Vehicle Accident Intervention strategy to create a safer road system in the Province.
The Department of Cultural Affairs and Sport's budget includes R2 million to begin the process of establishing a sport school at the Old Education College in Kuilsriver, to keep our youth away from drugs and violence by providing them with positive alternatives. The total allocation made available for the establishment of the School Sport over the MTEF period is R10,4 million.
R14,5 million has also been allocated over the next three years to prepare the Province for the Western Cape leg of the 2010 FIFA World Cup. The Department of Cultural Affairs and Sport will use these funds to capacitate a high-powered unit to co-ordinate preparations for the Western Cape leg of this event.
In the current year Health's budget grows by 10 per cent and makes up 34 per cent of the total provincial budget, amounting to R6,3 billion. The key priority for the Department of Health in the 2006/07 will be the finalisation and implementation of the service plan, which will give effect to Health Care 2010. The Department will also continue with the research conducted with the four provincial institutions of higher learning on the burden of disease, so that we can better understand the causes and risk factors for disease in our communities.
Emergency medical services receive an injection of R62,5 million over the MTEF period to allow for the implementation of the new expanded and improved national ambulance model, cutting response times and improving patient transport systems.
Funds totalling R20 million in 2006/07 and R127 million over the MTEF have been provided to ensure that highly trained and experienced staff are recruited and retained in our hospitals and clinics, especially nurses. In 2006/07 the Department expects to conclude the provincialisation of Primary Health Care services that were previously the domain of the non-metro municipalities. An additional R27,9 million has been set aside for this in the new financial year to bring the total allocation for PHC to R1,4 billion in 2006/07.
Over the MTEF, an additional R94,8 million will be spent to replace medical equipment in specialist hospitals, strengthen cancer oncology services and increase the number of medical specialists, while R382 million will be used to revitalise provincial hospitals.
The HIV and Aids epidemic remains a key concern. R12,5 million is set aside to strengthen the tuberculosis programmes, while conditional grants and grant funds from the Global Fund are also available to strengthen and expand programmes to effectively manage the dual epidemic caused by TB and HIV. The Department, working with the NGO sector, plans to recruit, train and deploy 4876 HIV and Aids peer educators in communities and schools to guide and counsel young people on the prevention of diseases and the adoption of healthy lifestyles.
Speaker, the fourth theme of this Budget is sustainable human settlements. The Province has to make sure its investment into housing and infrastructure is used to the maximum effect and that it has the greatest economic spin-offs. The Department of Environmental Affairs and Development Planning has received additional resources of R2 million in 2006/07 to facilitate the implementation of the Provincial Spatial Development Framework (PSDF), the policy framework for achieving sustainability in our settlements. This Department will also continue guiding legislative reform aimed removing a key block on development in the province, the time taken to get a decision on an application, and improving the quality of the decision. The draft Bill for Integrated Law Reform is due for release soon.
Environmental Affairs is also spearheading the development of a comprehensive, cross-departmental response to climate change in the Western Cape. This strategy will have a strong focus on improving the management of water quality and demand, addressing the serious constraint that water exerts on the growing provincial economy.
In 2006/07 the Department of Environmental Affairs and Development Planning receives a total budget of R175,5 million or R16,8 million more than in 2005/06.
The Department of Local Government and Housing will soon unveil a strategy to expand the number of subsidised housing units that are delivered, improve the quality of subsidised housing, the coverage of basic municipal services, and the overall governance of neighbourhoods and settlements in which they fall. At present the Housing Programme receives R2,4 billion over the MTEF and R663 million in 2006/07. This is a sizable R135 million or 26 per cent more than was allocated for 2005/06. As municipalities finalise their spatial development frameworks, in line with the Provincial Spatial Development Framework, it will be necessary for us to be willing to take the tough decisions required to realise our long-term goals of sustainable development and integrated housing settlements, thus reversing the apartheid spatial planning which has divided us in the past.
Over the MTEF the Department aims to establish a network of emergency management centres at district-level in collaboration with municipalities, drawing on approaches to resource-pooling with Departments of Health and Community Safety in the setting up of the provincial centre. Such integration will allow for better response times to emergencies.
The Department will also spend R14,5 million over the MTEF on a new capacity building programme for local government. The programme is different from past attempts in that it aims to create measures to retain and expand existing capacity from within local government itself, and to encourage municipalities to take ownership of the process. Overall the Department receives R777 million in 2006/07, up 23 per cent from its 2005/06 allocation.
As demonstrated in its four themes, this 2006 Budget internalises the visions and goals of ASGISA and Ikapa Elihlumayo. This type of internalisation will be necessary in every municipal budget as well as provincial departmental strategic plan if we are to effect change. The important research, strategising and planning associated with our Ikapa Elihlumayo strategies will come to fruition when the rubber hits the road in implementation. The purpose of all our development planning is to bring the provincial and local spheres together and to be jointly proactive, rather than reactive - to alleviate backlogs at the same time that we identify and address future needs that we only see hints of at present.
With 2006/07 as the year when the implementation of the Ikapa Elihlumayo strategies moves forward full-force, it will be important that we have effective monitoring and evaluation systems to track our progress and identify blockages. The Key Deliverables listed in the 2006/07 Budget Overview provide a succinct provincial list of what this budget will buy, and will give us a reference point as we progress through the year. We must hold ourselves accountable for these our commitments to shared growth and development, as we work closely with local government and the private sector to reach these aims.
