Budgeting on transformation

The Gauteng provincial government has made some great strides since 2014

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The Gauteng provincial government has made some great strides since 2014. Their budget for 2019/20 underlines the considerable advancements the province has made in transforming Gauteng’s economy to be both inclusive and supportive to small businesses and entrepreneurs, and to be the leading province when it comes to transparency in the government.

The budget presented by MEC Barbara Creecy contains not only a fulfilment of the commitments made by the province to its citizens, but also underlines the commitment to transparency in the management of public funds.

However, the budget presents more than just promises, it shows a level of commitment to building on some of the key achievements the government has made in the province in recent times in transforming the economy and building on the solid basis that Gauteng has in the national economy.

Transformation of the township economy

One of the great strides that the Gauteng government has undertaken since 2014 has been to focus on transforming the township economy as one of the great contributors to the province as a whole.

Gauteng, as the biggest contributor to the country’s gross domestic product (GDP), has a special role to play in promoting faster and more inclusive growth.

According to Creecy, the government has proactively supported this economy as a priority of its spending over the past term.

“Over the past five years, the Gauteng provincial government has procured goods and services to the value of R22 billion from township entrepreneurs,” Creecy said.

“We have registered 32 616 township businesses, many from as far afield as Limpopo, Mpumalanga and the Free State on the Gauteng SAP System, which is linked to the central supplier database. Of the Gauteng-based township enterprises, we have used 7 192 in the provincial supply chain,” she added.

Supplier development programme

According to Creecy, 2 500 Gauteng-based township enterprises have received training through their supplier development programme since 2014.

“In an effort to ensure that our procurement opportunities do not undermine the cash flow stability of townships and other enterprises, Gauteng has made significant strides in paying our suppliers on time. One of the successful programmes that helped us achieve this has been our e-invoicing application, which won a Bronze Award at the Premier’s Service Excellence Awards last week.

“This year, we are taking our Township Economic Revitalisation Strategy one step further with the creation of the Provincial Small and Micro-Enterprise Clearing House.

“This partnership between the Gauteng government, the private sector and the University of Johannesburg links township entrepreneurs to those who want to buy their goods and services and to those who want to fund and support such partnerships.

“It is designed not only to develop SMMEs in their own right, but also to link the support of the Youth Employment Service (YES) so that township enterprises can host interns from the Tshepo 1 Million partnership.

“The programme will be piloted in Tembisa for the first six months of this year and then be upscaled in the second half of the year,” she said.

Open tender system

While the economy has slowly been transforming as part of the government’s efforts to make it more transparent, effective financial management and a commitment to transparency have been a hallmark of the Gauteng provincial government in its current term.

“Our innovative open tender system has been rolled out in all departments and six entities. To date, over 80 projects with a collective value of about R18 billion have been adjudicated in public. This process has enhanced transparency in the government and created significant awareness about public procurement and accountability in decision-making.

“Treasury received a number of positive comments about the role the open tender adjudication process is playing in promoting clean governance.

“The bill, which will enshrine our open tender system in law, is now before our Finance Committee. We hope this bill will pass into law before we rise in March.

“We have significantly improved provincial financial management and compliance. This has resulted in 65% clean audits and 100% unqualified audits for all departments and entities for three years in a row!

“I have no doubt that the significant progress we have achieved in this term in establishing a culture of transparency, public accountability and credible financial controls can, if sustained in the next term, ensure the provincial government achieves its target of 100% clean audits.

“We are also happy that all Gauteng municipalities where audits are complete, have received unqualified audits, also for the third year in a row. One municipal audit is outstanding, and Midvaal must be congratulated for sustaining its clean audit for five years in a row,” Creecy elaborated.

With Gauteng becoming the province of choice for migration, a significant challenge is to handle the growing population and to ensure that the demand for services is not compromised. This has led the Gauteng Treasury to find new, unique alternative methods for revenue generation, which have served as a model for other provinces in trying to improve the national economy.

One of the key factors in promoting transparency will also be fighting corruption, something Gauteng has committed itself to.

“When we took office in 2014, under the leadership of the Honourable Premier, we promised the people of Gauteng that good governance will be at the centre of what we do. We promised that corruption will not be tolerated.

“In an effort to tackle and fight against corruption in the province, the Office of the Premier has established the Integrity Management Unit.

“To achieve this, the Office of the Premier, working in collaboration with all GPG departments and the Special Investigating Unit, has developed a four-pillar strategy, which includes prevention, detection, building investigative capacity and ensuring we take disciplinary action and, where necessary, lay criminal or civil cases,” she said.

In total, Gauteng has allocated R291 million to promoting a clean and effective government.

Financial alternatives

“Our provincial population has increased to 14.7-million (Statistics South Africa: Mid-Year Estimates, 2018). Our public health system serves 20 million healthcare users per annum and our education system now has 2.3-million learners.

“A combination of improved own-revenue collection, a more creative approach to off-budget financing and tight financial management has enabled us to meet the ever-growing demand for public services.

“In 2014, we took a conscious decision to increase provincial revenue. Together with our sister departments, we set out to eliminate loopholes in collection mechanisms and promote operational efficiency,” Creecy explained.

She added that every year during the five-year term, they surpassed their annual revenue targets and, to date, they have collected over R20 billion in own revenue.

“This is the highest amount raised by any provincial government and goes a long way to explaining why we have managed to keep the province’s finances afloat.

“These resources have been particularly important in keeping teachers, social workers, nurses and doctors in our frontline facilities. Consequently, we have been able to protect citizens from cuts in health, education and social services.

“Five years ago, we also took a decision to build the capacity of our Gauteng Infrastructure Finance Agency (GIFA) to develop a project pipeline for alternative and blended financing solutions.

“As we speak, the West Rand Logistics Hub and Jewellery Manufacturing Precinct are in phase-one construction and approval has been received to conclude the PPP agreement with the developers of two buildings at the Tshwane Innovation Hub, which will incubate innovation and smart industries.

“GIFA’s project pipeline now has more than 20 projects, which include the Kopanong Precinct and the Gauteng Schools Projects.

Infrastructure fund

National Treasury has indicated it has already begun drafting legislation to support the new Infrastructure Fund announced by President Ramaphosa last year.

“We are told this fund will offer a range of blended-finance solutions for infrastructure projects ready for implementation. It is our belief that the GIFA project pipeline will place Gauteng in an advantageous position to approach the fund for support once work on the regulatory environment is completed.

“The provincial government’s investment in infrastructure is estimated to have added R41 billion to the provincial economy over the last four-and-a-half years, created or sustained 265 000 jobs and created 499 000 public works opportunities,” she said.

The new methods of revenue generation have allowed the province to continue its spending on key areas such as healthcare, social development and education in the province.

“To improve the quality of the public schooling system and enhance skills development, the Department of Education has been allocated R49.4-billion.

This includes R3.7-billion for direct transfers to public ordinary schools, early childhood development sites and special schools, R2.9-billion for the special school sector, which caters for learners with intellectual and other disabilities, and R815 million for e-learning devices and e-LTSM, which will continue to transform township schools into functional ICT-enabled learning spaces,” she said.

Creecy said Gauteng continues to prioritise helping young people cross the difficult path from school to the world of work.

Half-a-billion rand has been set aside in this budget, specifically for youth development initiatives, including R124 million for Tshepo 1 Million and R45.6-million for the welfare-to-work programme, which will help 46 160 women, inclusive of single mothers, to move from dependence on child care grants to sustainable self-supporting economic activity.

Creecy’s budget is based on President Ramaphosa’s vision of growth and renewal for the country.

“It is a vision that advances the values of our Constitution and, once again, places at the centre of our agenda the needs of the poor, the unemployed, the marginalised and the dispossessed.

“It is a vision we will only achieve if each and every one of us, in our different ways and locations, works to make it a reality,” Creecy said.

And the Gauteng provincial government will be advancing this through its budget for the year ahead.

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