AEPRE 2016.indd 1 2016/10/31 9:42 AM - National Treasury

SUMMARY OF ADJUSTMENTSSUMMARY OF ADJUSTMENTS FOR 2016/171. Adjusted EsƟmates of Provincial Revenue and ExpenditureThe 2016/17 adjustment budget process provides departments with an opportunity to make revisions to the main budgetin response to changes that have aīected government spending. The adjusted budget is craŌed through reprioriƟsaƟonof budgets within the current baseline and approved addiƟonal funding allocated from naƟonal and provincialgovernments. The departments reprioriƟsed budgets within the exisƟng baseline and conƟnued with implementaƟonof cost containment measures and redirecƟng funds from slow performing programmes and projects to areas of priority.The adjustments budget is prepared in an economic environment where both global and naƟonal growth rates aresubdued. The InternaƟonal Monetary Fund has projected global economic growth at 3.1 percent in 2016 and the domesƟceconomy at 0.1 percent owing to a range of factors. The NaƟonal Treasury has projected the domesƟc economy to growby 0.5 percent in 2016, and thereaŌer expects a moderate recovery over the next three years. This implies limited scopefor addiƟonal Įscal expansion in South Africa to further build on socio-economic development. In his delivery of the2016 Medium Term Budget Policy Statement, Finance Minister Pravin Gordhan emphasized the need to accelerate ĮscalconsolidaƟon to limit the budget deĮcit and slow the pace of debt accumulaƟon while supporƟng stronger public andprivate infrastructure investments that will sƟmulate economic growth.Due to the interconnectedness of the South African economy, the fragile global recovery and weakening naƟonal outlookpresent challenges for the province’s economy. The IHS Global Insight expects the provincial economic outlook to reach0.8 percent in 2016, down from 1.5 percent recorded in 2015. Despite that, the province conƟnues to be the country’seconomic hub accounƟng for an esƟmated 35.4 percent of the country’s GDP in 2015. This high economic standingconƟnues to draw the aƩenƟon of many job seekers to the province, with over 1.2 million people esƟmated to havemigrated into the province between 2011 and 2016. There is clearly a need to conƟnue to unlock economic growth atboth the naƟonal and provincial levels. To sƟmulate economic acƟvity, emphasis should be placed on meeƟng spendingtargets, parƟcularly on infrastructure projects and in the economic development space.The adjustment budget prioriƟzes the iniƟaƟ ves that aim to improve service delivery and therefore departments fundand address the key issues idenƟĮed through the NƟrhisano road shows and other provincial prioriƟes. At this point ofthe current term of governance, the Provincial EXCO is expecƟng departments to improve their culture of doing businesstaking into account factors such as resources idenƟĮed to be reallocated; realizaƟon of eĸciency (cost, Ɵme and quality)in doing the department’s business; possible partnerships with the private sector; and promoƟng collaboraƟon at acluster level by eliminaƟng silo approach in order to achieve integraƟon that would maximize the impact of governmentservice delivery. Departments should also idenƟfy the quick wins in order to deliver on APEX prioriƟes that must beaccelerated through Deliverology. Therefore, the adjustment budget is a vehicle for departments to reallocate funds inresponse to the provincial prioriƟes.The Public Finance management Act (Act No: 1 of 199) sƟpulates that; an adjustments budget for a province may providefor the appropriaƟon of funds that have become available to the province; unforeseeable and unavoidable expenditure;the shiŌing of funds between and within votes; the shiŌing of funds to follow the transfer of funcƟons; the uƟlizaƟonof a saving under a main division within a vote for the defrayment of excess expenditure under another main divisionwithin the same vote; and the rollover of unspent funds from the preceding Įnancial year. The details of the adjustmentsfor 2016/17 Įnancial year are illustrated in the secƟons below.Adjustment Budget Estimates of Provincial Revenue and Expenditure - 2016/17 1

SUMMARY OF ADJUSTMENTS2. Summary of the 2016 Adjusted EsƟmates of Provincial ReceiptsTABLE 1: SUMMARY OF CHANGES TO Total AdjustmentsNATIONALRolloversNATIONAL OtherAdjustedappropriaƟonPROVINCIALOtherEquitable Share79 599 868CondiƟonal Grants18 839 20862 556( 13 124)49 43218 888 640Transfers from NaƟonal98 439 07662 556( 13 124)49 43298 488 508338 733338 7335 320 44762 556( 13 124)338 733388 165103 808 95562 556( 13 124)338 733388 165103 722 3381 501 1391 501 1391 537 70862 556( 13 124)1 839 8721 889 304105 260 046Provincial Own Revenue79 599 8684 981 714Gross Revenue103 420 790Less: Direct charges - PoliƟcal Oĸce bearersTotal Revenue( 86 617)103 334 173Financing from Province( 86 617)36 569Net Revenue103 370 742During the 2016/17 Įnancial year, provincial receipts increase by R1.9 billion from the main appropriaƟon ofR103.4 billion to an adjusted appropriaƟon of R105.3 billion. This represents an increase of 1.8 percent in totalrevenue. The Įrst increase in the adjusted appropriaƟon is a result of a net naƟonal condiƟonal grant rolloveramount of R49.4 million which resulted from the correcƟon of an overstated grant allocaƟon that was puplished inthe 2016 Division of Revenue Act and approved rollovers from the 2015/16 Įnancial year to the 2016/17 Įnancialyear.The other increase in receipts is aƩributable to provincial own revenue of R388.7 million. The main contributorsto this revenue are the departments of Community Safety; Provincial Treasury; and Sport, Arts, Culture andRecreaƟon.2.1. Changes to CondiƟonal GrantsTABLE 2: SUMMARY OF CHANGES TO CONDITIONAL GRANTSAdjustmentsMainAppropriaƟonR �onHealth8 643 26015 00015 0008 658 260Comprehensive HIVand Aids Grant3 259 40715 00015 0003 274 407Health FacilityRevitalisaƟon Grant777 818777 818Health ProfessionsTraining andDevelopment Grant865 244865 244NaƟonal TerƟaryServices Grant3 727 0483 727 048NaƟonal HealthInsurance7 5437 543Expanded PublicWorks ProgrammeIncenƟve Grant forthe Social Sector4 2004 200EPWP IntegratedGrant2 000EducaƟon2 211 751EducaƟonInfrastructure Grant2 0004 3444 3442 216 0951 385 7371 385 737HIV and Aids (LifeSkills EducaƟon) Grant32 44932 449NaƟonal SchoolNutriƟon ProgrammeGrant712 955Maths, Science andTechnology Grant49 8102 Adjustment Budget Estimates of Provincial Revenue and Expenditure - 2016/174 3444 344717 29949 810

SUMMARY OF ADJUSTMENTSEPWP IntegratedGrant2 1392 139Social Sector EPWPIncenƟve Grant28 66128 661Social Development13 10813 108Expanded PublicWorks ProgrammeIncenƟve Grant forthe Social Sector13 10813 108CooperaƟveGovernance andTradiƟonal Aīairs2 0002 000EPWP IntegratedGrant2 0002 000Human SeƩlements5 046 443IntegratedHousing andHuman SeƩlementDevelopment Grant5 022 6695 022 6692 2052 205EPWP IntegratedGrantHousing DisasterGrant EkurhuleniRoads and TransportProvincial RoadsMaintenance Grant(21 569)21 5692 537 823(21 569)29 743( 21 569)5 024 874(21 569)29 743501 7842 567 566501 784Public TransportOperaƟons Grant2 033 590EPWP IntegratedGrant2 4492 449Community Safety1 8001 800Expanded PublicWorks ProgrammeIncenƟve Grant forthe Social Sector1 8001 800Agriculture and RuralDevelopment29 74329 7432 063 333118 778118 778ComprehensiveAgricultural SupportProgramme Grant85 07985 079Ilima/LetsemaProjects Grant26 06126 061Land care: povertyalleviaƟon4 8024 802EPWP IntegratedGrant2 8362 836Sport, Arts, Cultureand RecreaƟon268 64717 813Community LibraryServices Grant163 33917 813Mass Sportand RecreaƟonParƟcipaƟonProgramme Grant101 084(17 468)(17 468)345268 99217 813181 152(17 468)83 616Expanded PublicWorks ProgrammeIncenƟve Grant forthe Social Sector2 2002 200EPWP IntegratedGrant2 0242 024InfrastructureDevelopment17 16717 167EPWP IntegratedGrant17 16717 167Total changes incondiƟonal grants18 860 77762 556(34 693)27 86318 888 640Adjustment Budget Estimates of Provincial Revenue and Expenditure - 2016/17 3

SUMMARY OF ADJUSTMENTSThe 2016/17 adjustments to the total condiƟonal grant allocaƟon of the province is depicted in the table above.The total allocaƟon for condiƟonal grants increases by R27.9 million from R18.860 billion to R18.888 billion mainly asa result of approved rollovers by the naƟonal government in Health; EducaƟon; Roads and Transport; and Sport, Arts,Culture and RecreaƟon.Health: R15 millionThe department receives a rollover of R15 million under the Comprehensive HIV, AIDS and TB Grant for the payment ofsƟpends to community health care workers as payments could not be processed in the 2015/16 Įnancial year.EducaƟon: R4.3 millionThe department receives an addiƟonal funding of R4.3 million for the NaƟonal School NutriƟon Programme Grant tocover a shorƞall caused by a high food inŇaƟon.Roads and Transport: R29.7 millionAn amount of R29.7 million has been rolled over for the Public Transport OperaƟons Grant to seƩle commitments inrespect of subsidies to public transport operators.Human SeƩlements: (R21.6 million)The grant funding that was provided for hail storm damage in Ekurhuleni Metropolitan Municipality area through theHousing Disaster Relief Grant is no longer classiĮed as a condiƟonal grant.Sport, Arts, Culture and RecreaƟon: R345 000The Community Library Services Grant amounƟng to R17.8 million is rolled over for the compleƟon of addiƟonal scopeof work in community libraries while the allocaƟon for the Mass ParƟcipaƟon and Sport Development Grant is reducedby R17.5 million to correct an error that overstated the grant allocaƟon that was published in the 2016 Division ofRevenue Act.3. Summary of the 2016 Adjusted EsƟmates of Provincial Expenditure3.1 Changes to Provincial Payments by VoteTABLE 3: CHANGES TO PROVINCIAL PAYMENTS BY VOTEMainAppropriaƟonFuncƟon ShiŌs,Surrenders cialVirementsand ProvincialTotalAdjustmentsAdjustedAppropriaƟonR thousandOĸce of thePremier449 420Gauteng ProvincialLegislature641 673EconomicDevelopment1 331 638Health37 408 057EducaƟon39 069 226Social DevelopmentCooperaƟveGovernance andTradiƟonal Aīairs2 36615 00020 00022 366471 7867 8847 884649 55730 56125 50056 0611 387 69933 800200 000248 80037 656 857260 000439 42439 508 65036 24036 2404 271 602175 0804 3444 235 362418 76327 70070 00097 700516 463Human SeƩlements5 871 166127 50050 000177 5006 048 666Roads andTransport7 299 704580 000609 7437 909 44720 70030 700683 58053 73253 732831 58516 00027 942849 00136 00047 0541 263 18635 00034 158641 5521 411 0561 889 304105 254 483Community Safety652 880Agriculture andRural Development777 853Sport, Arts, Cultureand RecreaƟone-GovernmentGauteng ProvincialTreasuryInfrastructureDevelopmentTotal29 74310 000821 05917 8131 216 132(1 524)607 394( 842)11 597(17 468)12 5782 564 853103 365 1792 564 85362 556428 816(13 124)4 Adjustment Budget Estimates of Provincial Revenue and Expenditure - 2016/17

SUMMARY OF ADJUSTMENTSOĸce of the Premier: R22.4 million increaseThe main appropriaƟon increases by R22.4 million from the main appropriaƟon of R449.4 million to an adjustedappropriaƟon of R471.8 million. A funcƟon of the Employee Health and Wellness Programme was transferred fromthe Department of e-Government to the Oĸce of the Premier as from 1st October 2016. An amount of R2.4 million foroperaƟonal requirements of this funcƟon is therefore reallocated to the Oĸce of the Premier. The department receivesprovincial addiƟonal funding of R20 million to boost youth employment iniƟaƟves in the province through the Tshepo500 000 programme.Provincial Legislature: R7.9 million increaseAn amount of R7.9 million is reallocated to the Legislature from its retained income to fund an increase in consƟtuencyallowance for members and parƟes in order to fulĮl their consƟtuƟonal obligaƟons.Economic Development: R56.1 million increaseThe main appropriaƟon increases by R56.1 million from R1.332 billion to R1.388 billion in 2016/17. The increase comprisesof R30.6 million approved rollover to fund the 2015/16 commitments in respect of the township industrial hubs andR25.5 million addiƟonal funding allocated to the department, of which R10.5 million is made available to GautengTourism Agency to contribute towards the hosƟng of major events in the Province (i.e. World choir games, CyclingfesƟval and Discorp Africa project) and the remaining R15 million is provided to Gauteng Liquor Board to supplement itspersonnel budget and to GEP to assist the SMMEs Įnancially and non-Įnancially due to the increased demand for GEPproduct oīerings which have increased over the past two Įnancial years.Health: R248.8 million increaseThe departmental main appropriaƟon increases by R248.8 million to an adjusted appropriaƟon of R37.657 billion. R15million is allocated as an approved naƟonal rollover towards payment of sƟpends to community health care workers thatcould not be processed in the 2015/16 Įnancial year. A further amount of R33.8 million is approved for infrastructure tofund the incomplete electro-mechanical projects at various hospitals.An addiƟonal amount of R143.7 million is allocated to cover the higher-than-anƟcipated salary increases for the publicsector as per the wage agreement and an amount of R56.3 million is allocated towards ICT for revenue enhancement.EducaƟon: R439.4 million increaseThe 2016/17 main appropriaƟon of the department increases by R439.4 million to an adjusted appropriaƟon of R39.509billion. The department receives a rollover amounƟng to R175 million; of which R157 million is a transfer to Sci-bonoDiscovery Centre for the expansion of the ICT programme in the province, and R18 million is for the seƩlement of seniormanagement service conference cost and development courses for middle and foundaƟon managers.AddiƟonal allocaƟon of R264.3 million is received by the department, of which R155 million is allocated for the Įlling ofcriƟcal vacant posts and the appointment of teachers in new schools to be opened in the 2017 academic year and R105million will be used to cover a shorƞall in funding for municipal services in schools that results from higher electricityprices. AddiƟonal funding received from the naƟonal government is R4.3 million that is allocated for the NaƟonal SchoolNutriƟon Programme Grant to cover a shorƞall caused by a high food inŇaƟon.Social Development: R36.2 million increaseThe department’s main appropriaƟon is increased by R36.2 million to R4.271 billion. Included in the addiƟonal fund isan amount of R15.3 million allocated to fund an increase of bed capacity in Randfontein Life Recovery Treatment Centreand to fund the establishment of a treatment centre in Sedibeng region.An amount of R12 million is allocated for the establishment of centres of excellence in Sedibeng and Johannesburgregions as a replica to the Father Smangaliso Mkhatshwa Centre of Excellence implemented in Soshanguve. The centresof excellence are established to develop young recovering addicts who completed their rehabilitaƟon programme andto prepare them to parƟcipate in the mainstream economy. A further R8.9 million is allocated to fund the appointmentof Assistant Community Development PracƟƟoners and nurses in insƟtuƟons managed by the department.CooperaƟve Governance and TradiƟonal Aīairs: R97.7 million increaseThe department’s budget is adjusted upwards by R97.7 million to an adjusted appropriaƟon of R516.5 million. Theincrease relates to an amount of R27.7 million that is rolled over to fund the procurement of premises for the ProvincialDisaster Management Centre.The increase is also aƩributed to R30 million that is allocated for the intervenƟons to address service delivery challengesidenƟĮed through NƟrhisano programme. These intervenƟons are directed at Emfuleni Local Municipality for theAdjustment Budget Estimates of Provincial Revenue and Expenditure - 2016/17 5

SUMMARY OF ADJUSTMENTSnew pump staƟon in Vereeniging; and Rand West Local Municipality (Mohlakeng extension 5 and 11) for electricityservices. R20 million is provided to assist Merafong Local Municipality (Khutsong) with infrastructure replacement andrefurbishment as part of the NƟrhisano outreach programme. Another R20 million is provided for the Ňood disasterrelief in the province.Human SeƩlements: R177.5 million increaseThe main appropriaƟon increase by R177.5 million in 2016/17 due to approved funds rollover and addiƟonal fundsallocated. The department receives a total rollover amount of R127.5 million, which comprises of R100 million for thebulk infrastructure of Syferfontein phase 2 project in line with department’s new strategy of mega human seƩlementsand new ciƟes and the balance of R27.5 million being for the payment of rates and taxes for housing stock and for theprocurement of laptops and furniture for new Johannesburg Regional Oĸces.The department receives an addiƟonal funding totalling R50 million, which comprises of R30 million for municipalservices and R20 million for security services.Roads and Transport: R609.7 million increaseThe budget is adjusted upwards by R609.7 million from R7.299 billion to R7.909 billion. The department receives anamount of R29.7 million as an approved rollover for Public Transport OperaƟon Grant (PTOG) to pay commitments inrespect of subsidies to public transport operators. The department also receives R580 million provincial allocaƟon tofund legal seƩlements in respect of the Gautrain Rapid Rail Link project.Community Safety: R30.7 million increaseThe department’s budget is increasing by R30.7 million from R652.9 million to R683.6 million. The increase is aƩributedto a rollover of R10 million allocated for the procurement of protecƟve clothing for patrollers. An addiƟonal funding ofR20.7 million is allocated, of which R10 million is for the deliverology projects includ

1. Adjusted estimates of provincial revenue and expenditure 2. Summary of the 2016 adjusted estimates of provincial receipts 3. Summary of the 2016 adjusted estimates of provincial expenditure 4. Summary of the 2016 adjusted estimates of provincial own receipts ADJUSTED ESTIMATES OF PROVINCIAL EXPENDITURE VOTE 1: OFFICE OF THE PREMIER 1 1.