No surprises from Trevor?

[Dave A]

I think the summary is more like a cash flow statement...

The small budget vs actual variances are pretty normal in government. If there have been big savings during the year, the department does its best to blow it otherwise their budget is reduced the next year. And when they run over budget the hurt on promotion prospects and the extra paperwork is... enough of an incentive to make damn sure it doesn't happen.

But, I think I have a problem with a department that reflects a great positive situation where very little appears out of place, all appears to be accounted for and everybody has a piece of the action, compared to what we are seeing on the ground with endless problems non delivery, poor systems and business processes, qualified reports, grime and corruption and squalortics.

I absolutely agree

[Dave A]

Aaah! There is one surprise in the budget that has come to light.

Children's rights organisations have reacted with outrage to Finance Minister Trevor Manuel's Budget, accusing him of contradicting the promises of his party and those of President Kgalema Motlanthe.

Having last year announced the extension of the child support grant to 15-year-olds, Manuel this week said the government would consider extending the grant to children up to their 18th birthday only if it was affordable.
full story from IOL here

Trevor's position is reported here.

The rising number of people receiving social welfare grants was "unsustainable" and the state was considering attaching conditions to the payments, Trevor Manuel, the finance minister, said yesterday.

He said that the number of beneficiaries of state pensions and child grants had increased to 13.5-million, which was "exceedingly large".

Last month the government lifted the maximum age for recipients of child welfare grants to 15 from 14, with the ANC committing in its manifesto to raise the age limit to 18.

Now the state is considering adding conditions to the child grants, such as school attendance or that the money is used to buy food.

"You can't give money away like this; there has to be conditionalities," said Manuel.
Full story from Business Report here

Sounds reasonable enough, but why the gap in policy? Maybe this explains it.

Meanwhile ANC spokesperson Jessie Duarte said this week that the ANC was not considering changing the treasury’s functions. Suggestions that the treasury should be reined in reflected the views of individuals, not the ANC's official position.

The left has criticised the powers exercised by the finance minister, who can unilaterally decide the funding of programmes.

Under the new government, it is envisaged that the finance minister will decide on allocations in conjunction with other representatives of a planning commission, yet to be established.

The commission will be responsible for the overarching coordination of government projects. The finance and the foreign affairs ministries will remain stand-alone units while it is suggested that environment, water, land affairs and agriculture should be grouped.

Duarte said the ANC had not decided whether the commission should be located within the presidency or be a ministry in its own right. However, it would work with the office of the president and Parliament and incorporate all deputy ministers.

One of the commission’s functions will be to scrutinise government departments which fail to spend money on state projects, Duarte said.

"We need constant evaluation [of government departments]. The issue in this year’s budget is poverty reduction. We need an instrument to monitor the efficacy of departments."
extract from M&G story here

[Dave A]

Having slept on it and listened to Trevor at the budget breakfast this morning, that 1.2% growth estimate might be more a goal than a hard expectation...

But you've got to shoot at something.

Surprise!

South Africa's fiscal deficit will be considerably higher this financial year due to a widening tax shortfall, now seen at at least R60-billion, Finance Minister Pravin Gordhan said on Tuesday.

Africa's biggest economy has slumped into its first recession in 17 years, knocking company tax and VAT through weak consumer spending, leading to a big revenue shortfall for 2009/10.

"The latest revenue data suggests that tax receipts will be at least 60-billion below target this year, which will result in a considerably higher fiscal deficit than originally expected," Gordhan said in written reply to a parliamentary question.

The Treasury has previously estimated revenue will come in between R50-billion and R60-billion short, warning that the 3,8% of GDP budget deficit -- itself a sharp widening from the 1,2 % of GDP shortfall for 2008/09 -- will not be met.

Analysts predict the deficit will come in at about 7%, leading to a borrowing requirement of more than 10 % of GDP.
full story from M&G here

That's quite a blow-out. Looks like Trevor passed the hot potato at just the right time.