Allocations for reform of services in metros linked to performance targets – Ramaphosa
In his newsletter on March 2, commenting on the Budget delivered the week before, President Cyril Ramaphosa said that R19.2-billion will be reallocated over the medium term to the reform of electricity, water, sanitation and solid waste trading services in metros, with these allocations to be linked to performance against clear targets.
The Budget acknowledges that many municipalities are in financial distress, driven by weak revenue collection, poor management and substantial service delivery backlogs.
Many municipalities are not spending appropriately, with water and electricity revenue not invested in infrastructure maintenance or expansion over several years, but instead redirected to cover other municipal costs.
Local government finances have to be placed on a more sustainable footing to support the delivery of basic services with this Budget, he said.
The Municipal Infrastructure Grant is also being reformed to address underspending and the misuse of funds, he added.
Over the next three years, R86.9-billion has been allocated under this grant to support the provision of free basic services to indigent households.
Further, after interest payments, the social wage accounted for more than 60% of government spending for this financial year, which will enable the provision of healthcare services to 84% of the population and free basic services to more than 11-million indigent households, and the payment of social grants to 26.5-million beneficiaries.
This social wage allocation in the Budget will also support about 13.6-million learners at school, Ramaphosa said.
"Every allocation in the Budget is a developmental choice to ensure there are teachers in classrooms, nurses and doctors in clinics, electricity and basic services in homes and businesses, infrastructure to grow the economy and employment opportunities for communities.
"This Budget builds on the progress made over the last few years to stabilise, reform and transform our economy. Improvements in public finances, stabilising debt, a narrowing budget deficit, credit rating upgrades and improved market confidence all signal the beginning of an economic recovery," he said.
The stabilisation of public finances provides space to accelerate public investment, sustain the social wage and direct resources to reforms that drive growth and job creation, he added.
"This year's Budget focused on three imperatives, namely maintaining fiscal sustainability, driving inclusive growth and protecting society's most vulnerable. It is a balanced budget that reflects the realities of our economy, limited financial resources, high unemployment and urgent infrastructure needs," Ramaphosa said.
Effective infrastructure lowers the cost of doing business, raises productivity and supports exports.
R1-trillion in public spending has been allocated to infrastructure over the next three years to build and maintain roads and rail lines, expand energy infrastructure, and build and maintain water and sanitation infrastructure.
Yet, government cannot finance the full scale of infrastructure South Africa needs and is mobilising investment from private and other sources, as well as opening the space for public-private partnerships.
"We are maintaining State ownership of strategic national infrastructure," said Ramaphosa.
"We will continue to be guided by fiscal discipline, structural reform, targeted investment and a commitment to improving the material conditions of every South African. A stable macroeconomic environment boosts investor confidence and increases government's capacity to invest in growth and poverty relief without compromising sustainability," he said.
Meanwhile, business organisation Business Leadership South Africa (BLSA) CEO Busisiwe Mavuso said the Budget delivered encouraging signals for business confidence and infrastructure investment.
While not addressing every challenge, it demonstrated con...