Gauteng is cheesed off at its slice of the national=20 revenue pie. Reg Rumney reports
The Gauteng government may have to find R1,2-billion this=20 year to get its sums right. That is the shortfall between=20 the money Gauteng will get from the central government=20 and its own revenue and spending.=20
It might have to borrow up to R280-million of that. The=20 exact extent of the shortfall is one of the big=20 uncertainties in the first provincial budget to be tabled=20 under the new provincial dispensation.
Central government will provide around 92 percent or=20 R9,95-billion of the R10,776-billion budget. The=20 remaining R827-million will come from own revenue, the=20 bulk of which comes from vehicle licences, patient fees=20 at provincial health institutions, and horseracing taxes.
In presenting his 1995/96 Budget this week MEC for=20 Finance and Economic Affairs PJ Moleketi argued that the=20 way the provincial government Budgets are allocated means=20 that Gauteng is being “squeezed from all directions.”
Gauteng accepts the need for fiscal discipline, but is=20 disappointed at the way money is allocated through=20 functional committees which Moleketi believes are biased=20 towards national government.
This in turn has detracted from the constitutional power=20 of the province to decide on how to spend its money.=20
In Moleketi’s words, the province is “not in a position=20 to undertake any inter-functional reprioritisation”.
And while the national Budget upped spending on social=20 services, the Gauteng allocation to education has dropped=20 by R100-million, and the increase in the allocation of=20 money to health still means, according to Moleketi, that=20 health is underfunded to the tune of R384-million.
The two percent increase in the amount of money allocated=20 to Gauteng in the latest budget is a decrease of at least=20 7,5 percent in real terms compared to the same period=20 last year. This is is the result of the move to “parity”=20 in budgetary allocations to provinces, in other words,=20
Gauteng is clearly not allocated money in proportion to=20 its revenue-generation or contribution to gross domestic=20 product. It provides more than 60 percent of the tax=20 revenue, and accounts for almost 40 percent of the=20 country’s economic production.
Moreover, it provides services to residents of other=20 provinces. Garankua Hospital costs the health budget=20 around R300-million a year, but 90 percent of the=20 patients are not Gauteng residents.=20
The point was made at a press conference that Gauteng=20 should not be crippled by underfunding.=20
Money will be found to make good the underfunding by=20 various means in the 1995/96 financial year. The health=20 budget will be tided over by a R300-million “bridging”=20 allocation from the reconstruction and development fund,=20 for instance. And extra revenue will be obtained from=20 user charges, gambling, waste reduction, and possibly by=20 raising loans.
Moleketi told a press conference the province could live=20 within its means for 10 months before having to face the=20
Moleketi argued that the provinces should be entitled to=20 a slice of the extra revenue that flows into government=20 coffers through the year which was not provided for in=20 the National Budget.
That was R2-billion last year, and economists have=20 reckoned another R2-billion could flow in, largely as a=20 result of the National Budget’s conservative economic=20
The Gauteng Budget has used the same conservative=20 forecasts, but since it raises little of its own revenue,=20 it stands to gain a lot less from a slightly higher=20 growth rate than the central government does. But,=20 Moleketi did say an extra R60-million could come from=20 vehicle licences if vehicle sales continued on their=20 upward path.
Despite the plan to make up the shortfall the tight=20 budgeting in Gauteng means it has no money to bail out=20 local authorities if service charges are not paid. Hence=20 if the Masakhane campaign fails trouble looms.