Treasury MEC, Seaparo Sekoati, during a virtual legislature meeting on Tuesday said due to adjustments, the provincial budget will shrink from R72,796 billion to R71,610 billion.
This followed on an already decreased budget for most departments for this financial year, but all departments will be required to revise and amend their Annual Performance Plans to take into account amendments to their approved budgets.
The newly sworn in Speaker of the Provincial Legislature, Rosemary Molapo presided over the tabling of the provincial special budget adjustment.
President Cyril Ramaphosa announced earlier this year that government will make available social and economic support, commonly referred to as stimulus packages of around R500 billion and R130 billion towards the R500 billion will come from the National and Provincial 2020/21 Budgets.
R30 billion of the R130 billion will be sourced from the already tabled provincial budgets. Limpopo’s contribution to the R30 billion was R3,5 billion.
Sekoati said Covid-19 had increased poverty levels and that the province is likely to see an increase in the demand for government social services, resulting in an increased fiscal burden on the province’s coffers.
The sectors that will be most affected by increasing unemployment are mining, manufacturing, construction, transport, wholesale, retail, the motor trade, catering and accommodation.
To accumulate the province’s R3,5 billion contributions, all departments and public entities were requested to revisit their equitable share allocations to identify programmes or activities that could temporarily be suspended without negatively impacting the longevity of such programmes.
National Treasury has decided that provinces will retain their equitable share contributions in the respective provinces, and there will be no change to Limpopo’s Equitable Share allocation of R62,3 billion, but the province must reprioritise the said contribution to fund Covid-19 projects.
Cuts made to the equitable share budgets of the departments and their public entities totalLing R3,5 billion:
• Office of the Premier – R56,5 million
• Legislature – R21 million
• Education – R417,9 million
• Agriculture and Rural Development – R299,4 million
• Provincial Treasury – R80,2 million
• Economic Development, Environment and Tourism – R420,9 million
• Health – R1,029 billion
• Transport and Community Safety – R154,1 million
• Public Works, Roads and Infrastructure – R649,8 million
• Sport, Arts and Culture – R58,4 million
• Co-Operative Governance, Human Settlements and Traditional Affairs – R114,3 million
• Social Development R198,5 million
These funds are reallocated to departments and public entities to address Covid-19 projects. An amount of R500 million is also made available for Provincial Socio-Economic Recovery Projects.
An amount of R686 million has been reserved to fund a shortfall due to a Covid-19 surge in the province.
The provincial allocation on conditional grants was adjusted downwards by R543.2 million from R9.890 billion to R9.347 billion.
The departments affected include:
• Department of Education conditional grant allocations are reduced by R295,8 million.
• Department of Agriculture conditional grants are reduced by R76,7 million.
• Department of Public Works, Roads & Infrastructure’s Provincial Roads maintenance grant is reduced by R196,1 million.
• Department of Co-Operative Governance, Human Settlements and Traditional Affairs (CoGHSTA) conditional grants are reduced by R137,2 million.
• The Department of Health is allocated an additional R223.4 million as a new component known as Covid-19 within the Comprehensive HIV and Aids grant.
Provincial Treasury recommended that departments allocate 20% of their relevant conditional grant allocations to fund Covid-19 responses, using the revised frameworks, which will avail an amount of R1,873 billion to the province.
Covid-19 has had serious ramifications on the compensation of employees (COE). Departments have been requested to submit only critical posts to Treasury for consideration.
The original budget for COE in the province was R50,818 billion and this was reduced by R1,038 billion.
Most departments will not be able to fill posts in terms of their 2020 Revised Recruitment Plans, amounting to R792 million, which will result in a provincial COE deficit of R1,178 billion.
The original budget of Public Entities was R598,2 million and this was reduced by R40,2 million to contribute to funding Covid-19 fund.
Their costing of normal COE expenditure amounts to R732,4 million and liabilities such as pay progression, performance bonuses and Cost of Living Adjustments (COLA) amounts to R56,9 million.
This leaves the Public Entities with R65,7 million before implementing 2020 Revised Recruitment Plans.
Story: Nelie Erasmus
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