Special Adjustment Budget: Provincial Treasury (Vote 3)

Note to Editors: The following speech was delivered by Minister David Maynier in the Western Cape Provincial Parliament  on 31 July 2020.

1. Introduction

We tabled the Main Budget 2020, entitled “A Budget for You”, on 10 March 2020 in this Parliament. However, the ink was hardly dry when we learned of the first Covid-19 infection and we were hit by a storm that was bigger and more terrifying than anything we could have imagined in the Western Cape.

The Provincial Treasury has been working hard to support the whole-of-government response to the Covid-19 pandemic in the Western Cape.

And so, today I am pleased to table the adjusted budget for Vote 3: Provincial Treasury.

2. Support

Provincial Treasury may have, what John Maynard Keynes, called a “wintery scepticism”, when it comes to spending, but under the able leadership of the Head of Department, David Savage, “Team Finance” immediately sprang into action to support departments who found themselves on the frontline of the fight against Covid-19 in the Western Cape.

We: 

• Triggered and rapidly processed emergency expenditure approvals in terms of Section 25 of the Public Finance Management Act (No. 1 of 1999), to authorise an unprecedented amount of funding:
  • R1 billion to the Department of Health for the mobilisation of field hospitals, testing and screening, and more beds;
  • R400 million to the Department of Transport and Public Works for the mobilisation of quarantine and isolation facilities; and
  • R18 million to the Department of Education for the mobilisation of school feeding schemes in the Western Cape.

All of which was critical in our fight against Covid-19 in the Western Cape.

Financing for these emergency expenditures was drawn from the provincial reserves.

The fact that we were able to do this, while still maintaining R376 million in reserves for further unforeseen and unavoidable expenditure in 2020/21 is testament to a strong Provincial Treasury which has maintained strict fiscal discipline and fiscal prudence in recent years.  

We: 

• Established the Central Procurement Advisory Committee to support and advise departments on procurement and supply chain management during the Covid-19 pandemic, and

We:

• Enhanced the surveillance of procurement of personal protective equipment or PPE, including mobilising our internal auditors to scrutinise and monitor procurement transactions.

Other measures to limit disruptions in the procurement environment and improve our disaster response, included the expansion of the supply chain team to respond to supplier queries and enable local businesses to participate in our supply chain, and an even closer alignment with National Treasury on supply chain and governance matters.

We: 

• Tabled a Special Adjustment Budget, which mobilised every cent available, and has allocated R3.05 billion to support the fight against Covid-19 in the Western Cape

And we are already planning the second adjustment budget to be tabled towards the end of 2020.

This will be phase two in a three-phase budget process and will require us to mobilise a possible additional R2 billion towards the Covid-19 fight, and Covid-19 recovery efforts in the Western Cape.

3. Innovation

Like much of the world, Provincial Treasury has had to innovate quickly and move most of their operations online.

In fact, almost all operations remain off-site and online despite the easing of restrictions under Alert Level 3, with little disruption to the key government systems such as payroll, payments and logistics.

An innovation we are particularly proud of, is the first Procurement Disclosure Report which was published yesterday, and which details all PPE procurement and expenditure by the Western Cape government from 1 April 2020 to 30 June 2020 and, on each transaction, includes details such as the name of the supplier, a description of the item, the unit price per item and the total spent.

We consider the Procurement Disclosure Report an excellent example of transparency, and another innovative step towards maintaining clean government in the Western Cape.

4. Adjustments

Provincial Treasury is already a lean operation, and the smallest of all Provincial Treasuries in South Africa.

However, as Provincial Treasury is itself responsible for overall budgeting and fiscal management in the Western Cape, it continues to lead by example and has done everything possible to reduce expenditure for reprioritisation towards the fight against Covid-19.

The main appropriation of R356.9 million has been adjusted down by R11.6 million to R 345.2 million for the 2020/21 financial year.

I will not deal in detail with all the adjustments, which are set out in the First Adjusted Estimates of Provincial Expenditure 2020.

I do however believe that it is important that we highlight some of these and how they are linked to the fiscal strategy in the Western Cape.

Our contribution to the Covid-19 response has been achieved by committing R12.9 million in baseline reductions:

• R281 000 from reductions in transfers and subsidies,
• R5.64 million through the review of compensation of employees, and
• R5.71 million from reductions in goods and service

The reduction in spending on compensation of employees follows a decision to fill critical posts only.

And, I am also pleased to say that four senior management posts have already been filled and we are excited by the energy that these new staff members will bring to “Team Finance”.

The reduction in goods and services has been achieved by leading the way with a number of cost containment measures within the department including inter alia:

• No entertainment allowances and catering
• Venue hire only for provincial systems training
• No minor assets
• A 50 percent reduction in printing and paper costs
• A 20 percent reduction in the external communication budget 
• A significant savings in domestic travel due to the lockdown and a 50 percent reduction thereafter; and
• No international travel

There was also a slight increased allocation to accommodate increased occupational health and safety regulatory requirements, and the need to enable staff to work from home during the lockdown period, including:

• R215 000 for the procurement of PPE for staff; and
• R1 million for data allowances for officials.

5. Conclusion

I often wish that ordinary members of the public, many of whom are sceptical of government, and the people in government, could see the hard work, and the dedication of “Team Finance” at Provincial Treasury.

While they may not be on the frontline, their dedication to helping their colleagues in other departments, especially our frontline departments, respond quickly and efficiently to the Covid-19 pandemic cannot be underestimated.

Even at the peak of our infections, to date there has been spare capacity and resources within the system. Which is testament to the incredible work of all officials in the Western Cape Government, including “Team Finance”.

In conclusion, I would also like to thank the Provincial Treasury’s Head Official, David Savage, and “Team Finance” for their continued dedication, professionalism and tireless commitment to the people of the Western Cape, especially during this crisis.

“Team Finance” are certainly, ‘behind the scenes’ heroes in the fight against Covid-19 in the Western Cape.