National Treasury Quarter 4 performance

Budget (WCPP)

20 July 2018
Chairperson: Mr D Joseph (DA)
Share this page:

Meeting Summary

The Committee met with the Provincial Treasury for a presentation on provincial performance for the 2017/18 financial year preliminary outcomes as at 31 March 2018.

Provincial own receipts collected up to 31 March 2018 amounted to R3.111 billion, with key revenue drivers being: Transport and Public Works; Health; and Provincial Treasury. From Transport and Public Works, the revenue was mainly derived from Motor Vehicle Licence (MVL) fees, which registered collections of R1.566 billion at the end of March 2018, higher than the R1.434 billion collected in the 2016/17 financial year. Higher collections in MVL fee revenue in 2017/18 were due to an increase in MVL fee tariffs and an increase in the motor vehicle population. From Health, the revenue of R567.672 million at end March 2018 was 4.4 percent higher than the R543.622 million in own revenue collected at the end of March 2017. Higher own revenue collections recorded in 2017/18 were largely due to the improved revenue performance for administrative fees and other services provided by the Department. From Provincial Treasury, revenue at the end of the March 2018 amounted to R604.854 million. Casino taxes contributed R537.5 million to own receipts, while horse racing taxes contributed R53.996 million.

The preliminary outcome of departments at the end of March 2018, reflect spending of R59.140 billion or 98.8 percent of the adjusted budget which amounts to R59.857 billion. The net preliminary under spending for the 2017/18 financial year amounts to R717.690 million or 1.2 percent of the adjusted budget and it was expected that once all year-end transactions have been captured, the under spending would marginally decrease. On Provincial Compensation of Employees and Headcount movement as at 31 March 2018, compensation of employees recorded a preliminary under spending of R239.180 million or 0.8 percent of the total adjusted budget. The headcount movement reflected that 503 posts were filled since the start of the 2017/18 financial year. The majority of staff appointed was within the Department of Education (375) and Health (86). The growth observed in Social Development, Provincial Treasury and Human Settlements was mainly due to the appointment of interns as well as line function posts whereas the decrease of 32 for the Department of Cultural Affairs and Sport was mainly due to staff resignations and retirements. Once the intern staff is discounted, the increase in staff headcount reflects alignment to the Province’s priorities as set out in the 2017 Budget.

On performance targets achieved, WCG Departments achieved 649 (80%) of the 814 performance indicator targets. 113 targets or 14 per cent of targets had been partially achieved, and 52 targets or 6 percent of targets had not been achieved. Notably, all departments within the Governance Cluster achieved more than the WCG average; and two departments in the Social Cluster achieved more than the WCG average, namely Community Safety and Cultural Affairs and Sport. Three departments in the Economic Cluster achieved more than the WCG average, namely Economic Development and Tourism, Agriculture and Environmental Affairs and Development Planning; and four departments within the Social Cluster achieved less than the WCG average, namely Education, Health, Social Development and Human Settlements. Transport and Public Works was the only Department within the Economic Cluster which achieved less than the WCG average.

Members asked how the provincial Department of Transport accounted for the revenues it collected, particularly through traffic fines and road worthiness test fees. They noted the underspending of R3.428 million by the Western Cape Gambling and Racing Board, mainly attributed to Legal fees (due to the ongoing litigation process), and sought clarity on this. They also wanted to know what was being done to ensure vacant positions were filled.

Meeting report

Presentation by Provincial Treasury

Mr H Malila, Deputy Director-General: Fiscal and Economic Services, Provincial Treasury, took the Committee through a presentation on preliminary year-end outcomes for revenue, expenditure, and infrastructure. Provincial own receipts collected up to 31 March 2018 amounted to R3.111 billion, with key revenue drivers being:

Transport and Public Works; Health; and Provincial Treasury. From Transport and Public Works, the revenue was mainly derived from Motor Vehicle Licence (MVL) fees, which registered collections of R1.566 billion at the end of March 2018, higher than the R1.434 billion collected in the 2016/17 financial year. Higher collections in MVL fee revenue in 2017/18 were due to an increase in MVL fee tariffs and an increase in the motor vehicle population. From Health, the revenue of R567.672 million at end March 2018 was 4.4 percent higher than the R543.622 million in own revenue collected at the end of March 2017. Higher own revenue collections recorded in 2017/18 were largely due to the improved revenue performance for administrative fees and other services provided by the Department. From Provincial Treasury, revenue at the end of the March 2018 amounted to
R604.854 million. Casino taxes contributed R537.5 million to own receipts, while horse racing taxes contributed R53.996 million.

The preliminary outcome of departments at the end of March 2018, reflect spending of R59.140 billion or 98.8 percent of the adjusted budget which amounts to R59.857 billion. The net preliminary under spending for the 2017/18 financial year amounts to R717.690 million or 1.2 percent of the adjusted budget and it was expected that once all year-end transactions have been captured, the under spending would marginally decrease.

The overall under spending of the Province mainly included the following:

Health: preliminary net under spending of R242.220 million was due to savings on Compensation of Employees as well as under spending on the Global Fund, which will be requested for roll-over to the 2018/19 financial year. Furthermore, a portion of the under spending within the Vote was attributed to Infrastructure in Programme 8: Health Facilities Management amounting to R62.453 million. The Infrastructure under spending relates to conditional grant funding that the Department will request for roll-over.

Premier: preliminary net under spending of R38.102 million was related to the lower spending on Compensation of Employees, attributed to the slower than anticipated filling of vacant posts. Goods and Services, particularly related to Computer Services, further contributed towards the aggregate under spending, and was partially related to the delayed implementation of phase one of the Broadband project.

On Provincial Compensation of Employees and Headcount movement as at 31 March 2018, compensation of employees recorded a preliminary under spending of R239.180 million or 0.8 percent of the total adjusted budget. The headcount movement reflected that 503 posts were filled since the start of the 2017/18 financial year. The majority of staff appointed was within the Department of Education (375) and Health (86). The growth observed in Social Development, Provincial Treasury and Human Settlements was mainly due to the appointment of interns as well as line function posts whereas the decrease of 32 for the Department of Cultural Affairs and Sport was mainly due to staff resignations and retirements. Once the intern staff is discounted, the increase in staff headcount reflects alignment to the Province’s priorities as set out in the 2017 Budget.

On Public Entity expenditure as at 31 March 2018, the preliminary spending amounted to R623.689 million or 95.8 percent in relation to the adjusted budget of R650.824 million. A net preliminary under spending of R27.135 million was reflected at the end of March 2018 and mainly relates to Cape Nature, which accounted for
96.9 per cent of the R355.972 million adjusted budget. The Entity recorded a preliminary net under spending amounting to R11.093 million, which includes personnel (R3.824 million), and implementation of the Electronic Document and Management System (EDMS). Furthermore, Saldanha Bay IDZ Licencing Company (SOC) Ltd recorded a total spending of R44.558 million or 89.7 percent of their 2017/8 adjusted budget of R49.694 million. The net under spending of R5.136 million relates to the late signature of the Transnet National Ports Authority lease agreement (signed at the end of March 2018), and other lease related expenditure including rates and taxes.

On performance targets achieved, WCG Departments achieved 649 (80%) of the 814 performance indicator targets. 113 targets or 14 per cent of targets had been partially achieved, and 52 targets or 6 percent of targets had not been achieved. Notably, all departments within the Governance Cluster achieved more than the WCG average; and two departments in the Social Cluster achieved more than the WCG average, namely Community Safety and Cultural Affairs and Sport. Three departments in the Economic Cluster achieved more than the WCG average, namely Economic Development and Tourism, Agriculture and Environmental Affairs and Development Planning; and four departments within the Social Cluster achieved less than the WCG average, namely Education, Health, Social Development and Human Settlements. Transport and Public Works was the only Department within the Economic Cluster which achieved less than the WCG average.

Discussion

Mr R Mackenzie (DA) noted the underspending by the Western Cape Liquor Authority, explained to be mainly relating to the upgrading of the Liquor Licencing Management System (LMATS). He asked that the explanation for the underspending be elaborated. He noted the underspending of R3.428 million by the Western Cape Gambling and Racing Board, mainly attributed to Legal fees (due to the ongoing litigation process). He sought clarity on this.

Mr Malila explained that the bulk of the underspending across the board was mainly under Compensation of Employees, as a result of vacant positions which had not yet been filled. The Western Cape Gambling and Racing Board had spent less on Legal fees than what had been budgeted for, thus the underspending.

Mr Mackenzie wanted to know what was being done to ensure vacant positions were filled.

Mr Malila said various personnel management processes were underway. Provincial Treasury was working together with the Department of the Premier to determine how best this could be dealt with. Personnel management went beyond the number of employees to their efficiency and productivity. However, the main thrust of the 2017/18 financial year was containment of the wage bill. Improving the credibility of the budget was also of paramount importance. He added that performance on the revenue collection side by departments had been quite commendable during the period under review.

Mr B Kivedo (DA) asked how the provincial Department of Transport accounted for the revenues it collected, particularly through traffic fines and road worthiness test fees.

Dr N Nleya, Director: Fiscal Policy, Provincial Treasury, said traffic fines were part of revenue collections but were not the major component. Provincial Treasury was not involved in the determinations about how such funds were being used. This was be up to individual municipalities be. However, the understanding was that a significant amount of the funds would be invested in the development of infrastructure which would improve enforcement of traffic laws.

Mr Mackenzie asked about the core reasons behind underspending on infrastructural development.

Mr Malila said the underspending was mainly due to lack of construction activities both in the public and private sectors. The construction industry as a whole was currently experiencing a glut in activity. However, infrastructural development was being taken very seriously and the issue had been raised right up to executive level; through the inter-ministerial infrastructural development committee. Progress on this front was being monitored on a quarterly basis.

The Chairperson appreciated the inputs and thanked everyone for the engagements. He moved for the adoption of minutes for a meeting held on 2 May 2018 as well as the Draft Committee Annual Activities Report 2017/18.

The minutes and report were adopted.

The meeting was adjourned.

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: