Wednesday, 24 February 2021

Cape Town: The country will in the next three years see community development funding reach R240.7 billion, Finance Minister Tito Mboweni has revealed.

This function facilitates access to housing and basic services and affordable public transport. It also supports spatial transformation and urban development.

Over the medium term, total expenditure is expected to grow from R211.5 billion in 2020/21 to R240.7 billion in 2023/24.

In its 2021 Budget Review, the National Treasury said due to water, sanitation, electricity, housing and public transport functions being delivered by municipalities, provinces and public entities, they, transfers and subsidies are the largest share of expenditure in this function.

“Transfers to the local government equitable share remain the largest spending item, in order to fund municipalities to provide free basic services for low-income households and subsidise poorer municipalities. As a result of once-off allocations to support municipalities in 2020/21 and spending reductions, the equitable share will decline by 0.4 percent over the medium term,” reads the report.

Treasury said the Passenger Rail Agency of South Africa continues to face significant financial imbalances.

Persistent capital budget underspending and growing operational deficits as a result of vandalism of rail infrastructure, alongside a significant decline in passenger ridership, meant the agency had large cash balances for infrastructure with insufficient funds to run reliable services.

“As a result, capital transfers are reduced by R5.4 billion over the medium term to allow the use of existing capital funds,” the department said.

New conditional grants to provinces and municipalities to upgrade informal settlements will be introduced in 2021/22.

The report said communities and community-based organisations will lead the planning and design of upgrades, with R24.8 billion allocated over the medium term to secure tenure and provide basic services in 900 informal settlements by 2024.

R217 billion allocated for economic growth programmes:

A total R217 billion will be spent over the next three-years on ambitious economic development programmes aimed at promoting faster and sustained inclusive economic growth, National Treasury said on Wednesday.

“Over the medium term, R14.6 billion is allocated to finalise outstanding land restitution claims and support land reform initiatives, including for subsistence and smallholder farmers,” said Treasury in the Budget Review document.

An additional R1.2 billion in the blended finance programme is earmarked for emerging commercial farmers.

According to the document, an allocation of R81.6 billion over the medium term will support the expansion of public employment programmes while a further R1 billion is set aside to enhance accountability for waste management.

“This funding will support the development of a new tyre waste industry plan, the review of producer responsibility regulations and the development of a Waste Economy Master Plan.”

A R540 million Tourism Equity Fund has also been established to support black-owned and commercially viable enterprises to acquire shares in tourism enterprises.

Over the medium term, R5.3 billion has been set aside for the Department of Science and Innovation to scale up interventions supporting the local production of ventilators, nano satellites, hydrogen fuel cell technologies, and renewable energy research development and pilots.

The pilots include the KwaZulu-Natal Research Innovation and Sequencing Platforms.

Treasury said the Small Enterprise Finance Agency has been allocated R885.3 million over the same period for a blended finance model to support small and medium enterprises, and allocated R2.9 billion under the Township and Rural Entrepreneurship Fund to support small businesses in rural areas and townships.

To support industry, R17.1 billion is allocated to the Department of Trade, Industry and Competition for business incentives including manufacturing, special economic zones, the clothing and textile sector and services sector development.

These incentives will support the national industrial strategy.

The Department of Environment, Forestry and Fisheries has been allocated R1.2 billion over the Medium Term Expenditure Framework (MTEF) period to support climate resilience initiatives, including a legislative framework, intergovernmental coordination and job resilience plans.

Expenditure in the function will rise from R191.9 billion in 2020/21 to R217.2 billion in 2023/24. This was despite the baseline for this functional group being reduced by R11 billion over the medium term.

“This mainly affects compensation of employees, transfers and subsidies, and selected goods and services including in the Expanded Public Works Programme. The reductions affected allocations to entities and incentive programmes such as the Comprehensive Agriculture Support Programme, manufacturing development, the Clothing and Textile Competitiveness Programme, global business processing, film and television, tourism and small business support,” noted the document.