Finance Minister Trevor Manuel is expected this week to enlarge the 2010 Soccer World Cup budget pie and apportion slices to government departments and host cities.
When he presents his mid-year ”mini-budget” on Wednesday, Manuel is widely expected to announce an increase in sums budgeted for hosting the sports extravaganza, and provide detail of who will be getting what.
Especially closely watched will be the amounts being handed out to the nine host cities for upgrading and building football stadiums, an exercise that football’s world governing body, Fifa, has projected will cost R8,3-billion.
”Minister Manuel needs to once and for all make a formal budget allocation for the building and upgrading of stadiums,” the main opposition Democratic Alliance’s James Masango said. ”Minister Manuel should come clean and tell South Africa and the rest of the world to what extent the … government is prepared to contribute.”
The local organising committee, Department of Sport and Recreation and economists expect Manuel to use the mini-budget platform to do just that.
World Cup host cities have complained of being left in the dark about the amount of money they are to receive from the national government, saying this hampers planning. City managers have warned they cannot afford to spend cash to the detriment of their financial sustainability and provision of services.
Cities will have to fork out tens of millions of rands to revamp five stadiums and build five new ones, but the national government is to provide the bulk of the cash. Construction must start by January next year.
Line-function departments may also get more from Manuel on Wednesday for World Cup-related capital expenditure, with an estimated R3,7-billion required to upgrade transport infrastructure and R400-million to boost the country’s broadcasting capabilities.
About 450 000 visitors are expected for the event, with tourism revenue projected to be about R13-billion. Official estimates are for 130 000 jobs to be created and R21,3-billion to be contributed to gross domestic product.
In his annual budget speech in February, Manuel said up to R5-billion would be spent on dedicated infrastructure for the tournament, R3-billion of that over the next three fiscal years. Yet the cost of building just one stadium, Cape Town’s Green Point, has been put at about R3,3-billion.
The medium-term budget policy statement to be tabled on Wednesday is designed to accommodate adjustments to expenditure estimates based on changes in demands and resources since February.
Economists predict Manuel will direct a large portion of additional spending towards capital expenditure with an eye on the World Cup. This would include infrastructure such as roads and hospitals.
”South Africa’s needs in this regard [infrastructure] are so great that a further allocation of funds would not be out of order,” said Sanlam group economist Jac Laubscher.
”I suspect one of the spending priorities is going to be 2010,” said T-Sec economist Mike Schussler. He also expects increased spending on education, health and welfare, and on boosting business incentives.
Businesses and individuals will be looking for an indication of tax cuts further down the line, he added.
Laubscher said government revenue is likely to be R472-billion for the year, about R26-billion more than budgeted.
‘Be open’
Meanwhile, Democratic Alliance (DA) leader Tony Leon said on Saturday that South Africans must be open about problems and possible solutions to make the 2010 World Cup successful.
”In order to make the event a winning achievement, the DA believes we must raise our voices about possible problems and be quite clear about the solutions,” he said, speaking at the party’s Free State provincial congress in Bloemfontein.
”The time for government to act, to regain the initiative and to harness the popular imagination and energy is now.”
He said it is disturbing that there appears to be two visions for the event. ”According to the first vision, we have a set of assurances from key role players that all is going according to plan and the necessary infrastructure will be completed in good time.”
The second vision comes largely from the international community, Leon said. ”Media headlines from Canada to China have lately aired doubts, with rumours rife that Australia and the United States have been designated by Fifa as alternate hosts.”
He said Fifa head Sepp Blatter as well as 2006 World Cup organising committee chairperson Franz Beckenbauer have vocalised their doubts about South Africa’s readiness to host the prestigious soccer event.
”It is our task as a nation to make sure the first vision is proved triumphantly right, by deploying all our concerted acumen, creativity and energy, and thus rebutting the falsity of that second vision,” he said.
Leon described the consequences of failure to achieve success in 2010 as ”too ghastly to contemplate” and said South Africa should work together to silence its critics in this matter. — Sapa-AFP, Sapa