/ 13 October 2000

Please, Parliament, may I have R3,9bn more?

OWN CORRESPONDENT, Cape Town | Friday

TREVOR Manuel, the finance minister, has asked Parliament to increase his R233,4bn budget for 2000-2001 by R3,9bn, according to the daily Business Report.

Because of contingency reserves, higher tax collections, lower debt costs and the reallocation of some votes, this would not increase the deficit to more than the originally estimated 2,6% of gross domestic product, Manuel told Parliament.

Allocations for “unforeseeable and unavoidable” expenditure would total R2,3bn to cover such items as flood relief and infrastructure bills, exchange rate losses for the department of foreign affairs, and the pending local government elections, with R318m set aside for the latter. Total budget funds now allocated to flood relief this year stood at about R1,2bn.

Manuel said a large part of the extra funds would be needed to cover higher than expected salary increases for civil servants, who won a 6,5% increase, compared to the budgeted 5,5%. Provision also had to be made for the higher fuel costs of some departments this year.

Only R1,9bn would be “new” money, which would be covered by a R1,8bn increase in expected tax collections and a cut in debt servicing costs by R142m, the newspaper reported.

The balance of the R3,9bn would be covered by the R2bn contingency reserve set aside in the budget, but not allocated yet.

The Second Adjustments Appropriation Bill also required Parliament to approve reallocations of items already catered for in the budget. It provided for rollovers from last year, of which about R2bn would not be spent this year, leaving about R77bn to add to the expected level of expenditure, Manuel said.

Maria Ramos, the director-general of the Treasury, earlier said that she was pleased by the reduction in the amount of money various departments had asked for permission to roll over, because they had not spent it in the year it was allocated.

A few years ago, departments were asking to roll over a total of between R8bn and R10bn a year. The reduction of this to about R2bn indicated better planning and budgeting, something she expected to improve even further under the new Public Finance Management Act.