Medium Term Budget Policy Statement Delivered by Minister Alan Winde | Western Cape Government



Medium Term Budget Policy Statement Delivered by Minister Alan Winde

21 November 2013

Honourable Speaker,
Honourable Premier,
Leader of the Opposition,
Honourable members of the Western Cape Legislature on both sides of the house,
Director-General and Heads of Department,
Special guests,
My fellow colleagues in government who are committed to building a better future for all our people,
Citizens of the Western Cape.

Delivering the Open, Opportunity Society for All

I am honoured to address this house today on the DA-led Western Cape Government’s policy priorities and on the Adjusted Estimates for 2013.

This year’s Medium Term Budget Policy Statement (MTBPS) gives direction to the departments of this government as to how they should set their budgets in the years to come.

When we sat down to craft it, we began by asking ourselves two fundamental questions: "What" do we hope to achieve, and "why" do we seek to achieve it.

The first question is defined by the mandate upon which voters elected us to power in 2009: our number one priority is and will remain to build an open, opportunity society for all.

By open, we mean as society which promotes accountability and transparency in government, security of person and property, tolerance toward difference and an economy that is led by the free choices of individuals. In this society, the state’s powers are limited and individuals are free to pursue their own ends within the rule of law.

By opportunity, we mean a society in which all citizens have the wherewithal to take advantage of their freedoms. The key tools to achieve this are a good education, access to basic healthcare and the prospect of gainful employment. In an opportunity society, one’s future is determined by one’s talents and efforts, and the economy works for every person who’s determined to work hard.

We also believe wholeheartedly, as Nelson Mandela once said, that South Africa “belongs to all who live in it, both black and white”. Our desire is to build a country in which all South Africans enjoy full equality. In this society, discrimination on the grounds of race and other characteristics of birth are rejected; we clearly acknowledge the wrongs of the past and put positive steps in place to make them right.

The second question – ‘why’ are we striving to achieve an open, opportunity society for all – is arguably, more important.

In answering it, I would like to share with you the stories of two young men of our time.

The first was born in the Soweto Township on 28 January 1962, the very same year that a fellow resident, Mr Nelson Mandela, was arrested, tried and sentenced to jail.

As a small boy of only eight years old, he worked 14 hour shifts in his father’s spaza shop serving mine workers returning home from life underground. It was during this time that he learnt the basics of business, developed an ability to work hard and the appetite for success.

His ambition drove him to finish school and move to Swaziland to further his education. After completing his BA degree there, he came back to South Africa to study law – his long time passion – at the University of the Witwatersrand.

On the dawn of democracy in 1994, he was ready to take up a position as one of free South Africa’s first black lawyers. Understanding that he had choices, and confident in his abilities, soon afterwards he left this steady job to start up his own business.

During his first eight months as an entrepreneur, he worked from his briefcase, unable to secure a loan from the bank.

Today, that same young boy from Soweto has become South Africa’s best entrepreneur and its first black billionaire.

Perhaps not realising the significance of their choice at the time, the young boy’s parents named their son after one of Africa’s most prominent leaders – a man who also fought for freedom, Mr Patrice Lumumba. Yes, this is the story of Mr Patrice Motsepe.

This leads me to my next story.

Eighteen years after Mr Motsepe was born, another son destined to make a profound mark on our country came into the world. He was also born in Soweto, in the small suburb of Dobsonville, to a mom from the Eastern Cape and a dad from the North West Province. His parents recognised early on that a good education would be the key to a better life for him and his siblings, and they made sacrifices to send their children to the best school that they could afford. In this way, they ensured that they gave their children the opportunities which they were never able to have.

Unhindered by the bad start which so many others experience, the young man went on to study Psychology, and completed two Masters degrees in Theology and Public and Development Management. Today, he is standing to become the next Premier of Gauteng, in the hope that he can deliver the opportunities he received to other South Africans – black and white.

Mmusi Maimane’s name is just as fit: translated from Setswana, Mmusi means ‘ruler’ or ‘governor’. I’d like to take this opportunity to wish him and his caucus well as they work to bring the open, opportunity society for all to the residents of Gauteng.

The life stories of these two gentlemen prove that ours is a country in which a boy who spends his days behind the counter of a spaza shop and another from unprivileged circumstances in Dobsonville can defy the odds to become the very best that they can be.

Unfortunately, these cases are all too rare. The reality for most is that the hope of leading a life of dignity is a long-forgotten dream. For many South Africans, each and every day presents a new struggle to put food on the table, to afford the bus fare to work.

Mr Speaker, colleagues and residents of our Province, this is a reality we must change. That is why we are seeking to build a more open society, one in which opportunities to become the next big entrepreneur or the next leader of a province are available to all. For our part, we have and will continue to push back against bad service delivery that for too long has served to make our poor people poorer. Over the past four and a half years, we’ve used all the powers at our disposal to lay the foundation for an economy that works. We’re confident that we’re in a better position today than we were when we took power and that in the near future, residents who are willing to work hard will begin to feel the difference in their everyday lives.

Despite being on a good track, Mr Speaker, the public and private sector still has a lot of work to do to get our economy working for everybody. We need more jobs, more investment, faster and higher growth rates and we need our economy to become more inclusive.

In the next year and beyond, the Western Cape Government’s policies will be focused on those areas which will make the biggest impact in getting us there.

We are guided by the National Development Plan which we have translated into six transitions as outlined in our OneCape 2040 strategy document. We believe that put together, the six transitions - Educating Cape, Enterprising Cape, Green Cape, Connecting Cape, Living Cape and Leading Cape – will encourage a resilient, inclusive and competitive Western Cape with higher rates of employment, growing incomes, greater equality and an improved quality of life.

Economic and Labour Context

For five years in a row, we have cut expenditure on programmes and projects that weren’t achieving tangible results. We have also noted the change Minister Gordhan made in his MTBPS regarding extravagant expenditure by politicians and senior officials. Almost to a T, these are our policies which we implemented through changes to our Ministerial Handbook in 2010. Through the changes we made back then, we have already saved over R100 million.

Our efforts have been intensified by the global economic downturn which has placed pressure on government’s fiscus and demanded of us to tighten our belt.

Even though we are due to see a slight improvement in the global economy in the years ahead, we remain mindful of downside risks of our own making which are likely to create volatility in South Africa’s economy and therefore, our own.

These include local supply side disruptions and diminished foreign investment as a consequence of increased and violent strike action. If we can work together to ease these tensions, especially in light of the elections next year, we have a better chance of capitalising on stronger demand from our key trade partners as the global economy recovers.

In the meantime, we will continue to support those policies that are most crucial in making our economy work, attracting investment and skilling our citizens for the jobs of today. This pertains especially to those who have been left out of the economy. While in the Western Cape we have started to make some gains in addressing joblessness, around a quarter of our working population remains unemployed. This figure doubles for youths aged 15 to 24.

If we cannot create an environment in which meaningful incomes become a reality for a majority of citizens, our people’s ability to escape poverty and grasp opportunities will be dashed.

We share in Mmusi Maimane’s parents’ belief that the key to a better life starts with a good education, which is why it is the very first transition of OneCape 2040, and our most important policy priority.

Educating Cape

Speaker, in the MTEF period ahead, we will invest over the largest proportion of our budget into our education system so that each and every child has the wherewithal to shape for himself or herself a productive and successful future.

Because we know that education is the key to the open, opportunity society for the over 1 million learners of our Province, we have worked tirelessly to return the ailing system we inherited in 2009 to a healthier state. This has required of us to apply direct pressure to key points of concern including underperformance on the part of some of our principals and teachers, a lack of parent and learner commitment, inadequate resources and out-dated school environments.

Through our clear and focused plan to improve education in the Western Cape, we have managed to reduce the number of under-performing high schools – that is schools with a pass rate of less than 50 per cent – from 85 in 2009 to 26 in 2012. We have increased the National Senior Certificate pass rate in our poorer schools from 56.9 per cent to 70.9 per cent. Overall, we have improved the matric pass rate from 75.7 per cent to 82.9 per cent. In addition to this, we have seen a steady increase in the number of students writing and passing the matric examinations, as well as in the number of learners who have achieved access to study further.

We will relentlessly pursue further improvements in our education system.

Our future plans in this regard include the provision of daily meals to more learners, the continued roll out of more textbooks across particular grades, competency tests for aspirant principals and an ambitious infrastructure spending programme to build new and replacement schools. We will also roll out mobile health clinics so that we are able to measure the wellness of our children at key development milestones. This is a South African first.

While changing an education system is a lengthy and arduous task, our results show that we are turning the corner.

In the near future, we are confident that our children’s chances in life will not be affected by whether they come from Hout Bay, Hanover Park or Hotagterklip, or whether they attend public or private schools. Our plan is to ensure that no matter which school our children attend, and no matter where it is in our Province, they will receive equally good education. Of course this will put the ball in their court: our initiatives will work best when matched with an ambition on the part of learners to lead better lives by giving of their very best during their school years.

Mr Speaker, if our young people are afforded good education, the possibility of them transitioning successfully into adulthood becomes that much more likely. The major difference, of course, is that the door to employment swings wide open.

Enterprising Cape

Speaker, our job is to create an environment that attracts investment and encourages job-creating growth.

The second transition of OneCape 2040 is Enterprising Cape, our plan to create a Western Cape which is globally recognised as a destination where it is easy to do business. In this version of the Western Cape, every person who is willing to work hard has the chance to do so.

Early on in this term, we undertook research into all the factors hindering economic growth and job creation. Business told us that the biggest obstacle they faced in expanding their companies and employing more staff was red tape.

In order to address these concerns, we set up a Red Tape hotline, staffed by a professional team with transversal links to all levels of government, which acts on behalf of the public to troubleshoot particular bureaucratic pitfalls.

We also completed several high level studies into common areas of concern and are working behind the scenes to ensure they are alleviated.

In the near future, we will also roll out Regulatory Impact Assessments, through which we will test whether new legislation will help or hurt business before it is put in place.

Speaker, making our economy work also involves making it attractive for foreign investors. If international companies come here, it creates jobs for our people.

Our most recent figures show that despite the economic downturn, we continue to draw strong levels of investment. Wesgro estimates that in the 2012/13 financial year, 1 783 new jobs were created through investment projects. Since coming to power, we have attracted 80 investment projects into our Province valued at R30.1 billion.

To further strengthen our trade ties with nations across the world, we are in the process of developing an International Relations Strategy focused on economic diplomacy. We will generate investment by building bridges between the Western Cape and key economies around the world.

We must also make sure that our residents have the necessary skills to take advantage of new economic opportunities.

This is why we are supporting strategies to match our skills demand and supply.

Through various platforms, including the Provincial Skills Forum, we are working with the private sector and academia to respond to our changing job market.

As mentioned earlier, youth unemployment remains a serious problem and the majority of our skills development initiatives target young people.

Both the NDP and OneCape2040 cite increasing employment for young job seekers as a core priority.

Over the next three years we will continue to invest in our plan to get young people on the first rung of the economic ladder.

Through two flagship initiatives, the Work and Skills programme and the PAY Project, we have given over 5 000 unemployed youths the opportunity to enter the job market.

In the years ahead, we will use the lessons we’ve learnt in the roll out of these programmes, in conjunction with the new tax legislation announced on a youth wage subsidy due to start in April 2014, to set up a facilitation unit that will work with the private sector to make it easy for business to access this scheme. I would like business to commit, by utilising this programme, to increase their staff establishment by 10 per cent. This will generate over 100 000 jobs for unemployed youth.

We also recognise the need to develop specialised skills in the emerging sectors of our economy, including oil and gas, renewable energy and ship building.

The launch of the Saldanha Bay Industrial Development Zone earlier this month will usher in a boom for our oil and gas vessel repair industry, and we must have the skilled employees to meet its needs.

At present, the average age of our artisans is 55 years old. Our ground-breaking Artisan Development Programme aims to offer young unemployed residents the in-service training they need to obtain their official qualifications.

Small businesses have also been identified as key job creators. The Western Cape is fast becoming known as a hub for entrepreneurial excellence.

We are dedicated to supporting new and emerging SMMEs through, amongst others, 21 economic development centres located across the Province which we co-fund in partnership with the national government. This is South Africa’s largest network of one-stop shops assigned to help entrepreneurs.

Because we believe that a job is the way out of poverty, we will also be investigating how to use the Expanded Public Works Programme as tool to lift people from unemployment.

While EPWP has been designed as temporary relief for poverty-stricken households, we believe it holds the potential to become a key driver of skills for our people.

Since 2009, the Western Cape Expanded Public Works Programme has generated 382 072 employment opportunities. This means that 382 072 residents were given an opportunity to improve their life circumstances.

Our drive to create economic growth and jobs unfolds against the background of the changing landscape of our Province.

The functional Metro region now generates 85 per cent of our provincial GDP and the majority of jobs. This has resulted in an influx of residents from our rural areas and other provinces to our urban nodes.

In recognition of the pressure that this has placed on our physical assets, we have embarked on a comprehensive capital investment plan focused on improving our education and healthcare facilities and our roads.

Another part of our infrastructure plan involves generating service delivery revenue for the state by releasing government property into the open market.

The successful lease of the Sea Point School property marks an important milestone in the profitable management of our property assets.

Connecting Cape

To ensure that we are not left out of the digital revolution sweeping the world, we will invest in the roll out of broadband infrastructure to every town and village of our Province.

The hard work in making this a reality has already begun. The first stream of this project is to connect all government buildings, including schools, by the end of December 2015.

The second stream strives to connect communities, businesses, households and municipalities.

Our R3 million Wi-Fi pilot project, which aims to take free wireless internet to three poor communities, has already commenced.

Also included in this stream is the development of additional ICT incubators.

Our first ICT incubator, the Bandwidth Barn, has generated international attention due to its successes in growing entrepreneurship in our Province.

While broadband links our people to economic opportunities around the world, it is our network of roads which links them to the economy at home.

That is why we will focus on keeping our busy roads in a good condition and on improving roads that are in a poor condition but have socio-economic significance.

In 2009, we set ourselves the target of reducing our road maintenance backlog by 16 per cent. I am pleased to inform that 93 per cent of all vehicle kilometres in our Province are now travelled on fair to very good roads.

To overturn apartheid spatial segregation, we will roll out Regional Socio-economic Projects and further Violence Prevention through Urban Upgrading spaces across other municipalities in the Province. The successes of our first VPUU in Harare reduced the murder rate there by 14 per cent. Lowered crime rates create the climate for increased economic opportunities, social cohesion and prosperity.

Green Cape

Because we understand that the world cannot continue to place a burden on its natural assets, the Western Cape is committed to going green.

Our goal in this respect is to position the Province as Africa’s leading green economy hub.

To achieve this, we have devised a Green Economic Strategic Framework which outlines how we will move away from  intense resource fossil fuels towards renewable energy resources and natural gas.

Going green needn’t be a burden: we plan to use green growth as a leading catalyst for investment and job creation.

Living Cape

The fifth transition of the OneCape 2040 plan is Living Cape – our plan to ensure that no matter where they’re from, residents of the Western Cape enjoy good living standards and equal access to basic and essential services.

The Western Cape must become a good place for business and a great place to live.

To further improve the livelihood of more Western Cape residents we are investing in projects which inspire healthy, safe and inclusive communities. This requires investing more in areas which were traditionally starved of state capital.

In under-resourced areas of our Province, the burden of disease resulting from preventable diseases remains a serious concern.

In addition, in-migration is placing pressure on our health services.

Because the wellness of our residents is key to the functioning of our economy, we have redoubled our efforts to improve our healthcare system.

I am pleased to note that our approach has already begun to yield results.

In our Province, Anti-Retroviral Treatment is readily available to people living with HIV and AIDS, and in the last financial year, over 134 000 residents received this life-prolonging treatment from government. This has resulted in the Western Cape having the lowest HIV prevalence rate. We have also made significant advances in lowering mother-to-child transmission and in lowering maternal mortality.

Our dream is for all residents of our Province – regardless of race or status – to receive equally good medical care.

To ensure this, we will invest in the expansion of our services in areas where they are needed most, including in Du Noon and Delft.

There will be upgrades to emergency centres across the Province and we will see the replacement of the GF Jooste Hospital and the redevelopment of the Tygerberg Hospital.

Living Cape also outlines our objective of fostering a society which provides a safety net for its most vulnerable residents including children, older persons and those afflicted by substance abuse, so that they, too, can live lives of dignity.

We will deliver the majority of our social services through non-government organisations which are located within our communities and best understand their unique needs.

To help those who are addicted to drugs, we will continue to expand access to drug rehabilitation services, outpatient care and early intervention services.

When we came to power in 2009, the Province had only 8 drug treatment centres. We have increased this to 25.

To address the alcohol abuse problem placing a strain on so many of our communities, the Western Cape Liquor Authority has embarked on a major campaign to educate residents and traders on responsible liquor behaviour.

We believe that these interventions, together with others in our Safely Home project, are resulting in changes in attitudes towards drinking and driving and excessive consumption.

In the previous financial year, the Western Cape Liquor Authority held 2 306 inspections to ensure licenced outlets were following the Province’s liquor laws. Just yesterday it shut down an establishment that had evaded the law.

Speaker as we know, the youth are at the heart and future of our economy.

However, youth also face several, well-documented challenges, some of which I have mentioned in this speech.

We are currently in the process of devising a strategy which suggests mechanisms to improve the life chances of our young people.

The further roll out of our MOD Centre programme - through which we offer a range of sporting and cultural activities to children and unemployed youth to divert them from negative activities – is likely to form a big part of this strategy.

The Western Cape Government recognises that our living spaces contribute directly to our ability to lead lives of dignity and opportunity.

This is why we will invest in the delivery of integrated Human Settlements over the next three years.

To create sustainable, thriving communities, we are committed to do more than simply building structures.

To overcome the legacy of apartheid spatial planning, we are reviewing the Provincial Spatial Development Framework.

Once approved, this will be a key instrument in guiding the planning and expenditure of provincial departments.

The policy priorities spelt out in the Living Cape transition will seek to strengthen our economic resilience and ensure that every single one of the Western Cape’s six million residents are included in this region’s growth.

Leading Cape

A critical factor for the success of all of the above transitions is the improvement of our systems of government. We have committed ourselves to a programme of action that will allow us to become one of the best-run regional governments in the world.

In recent years, South Africa’s public sector has not kept pace with the latest technological advancements. This means that we have begun to hold back opportunities for the individuals that we serve in the private sector and who access our basic and social services. Holes in our procurement methods have also allowed corruption to creep in.

In the coming years, we will undertake a complete refresh of our systems. We are already in the process of developing new systems to oversee our strategic information and data; annual performance planning and reporting; and project management.

We also aim to adopt biometric fingerprinting technology which will leave no room for crooked officials to cheat the procurement systems through which we buy around R9 billion worth of goods and services on an annual basis.

Our efforts to improve the quality of service delivery by our departments and municipalities within the Province will be augmented by our programme to boost our corporate governance. Through the CGRO endeavour, we will continue to provide hands on support to our staff to assist them in closing the gaps identified by the Auditor-General in their management processes. This service incorporates a dedicated helpdesk which offers advice on best practice accounting methods and a data analytics service to enhance the accuracy of and completeness of financial information.

We recognise that the biggest determinant of whether we will be able to play our part in delivering the open, opportunity society, is our staff. We are dedicated to making this administration a caring, competent, accountable and responsive place of work that operates at all times with the highest level of integrity. Above all, it should become driven to deliver outcomes that make a real difference in people’s lives.

I am confident that through our focus on getting the basics right, and our dedication in supporting the continuous develop our staff corps so that each employee can play a impactful role in our great project, we will achieve our goal of becoming a world class organisation.

The resource envelope and financing issues

Mr Speaker, over the medium term, this government will spend just shy of R150 billion to deliver equitable services to its people.

This will be financed primarily through national transfers, including the provincial equitable share and conditional grants, which is likely to account for 95.87 per cent of our budget. Own receipts – of which motor licence fees and casino taxes make up the majority share – contribute a further 4.13 per cent.

According to our calculations, national transfers to our Province are expected to increase by R2.101 billion in 2014/15, R3.555 billion in 2015/16 and R3.574 billion in 2016/17.

Conditional grants are forecast to reduce by R704.996 million in 2014/15, before increasing by R497.499 million in 2015/16 and R513.060 million in 2016/17.

Over the 2014 MTEF, this amounts to an average annual increase in our overall Equitable Share of 8.37 per cent, a rise which reflects the adjustments made to account for the increase in our population as determined by Census 2011.

Adjusted Budget

This Adjusted Budget provides for additional expenditure of R340.971 million.

In the main it provides for infrastructure related expenditure, of which:

  •        R69.814 million is provided for hospital revitalisation and other infrastructure related issues;
  •        R19.856 million is provided for the repair and replacement of infrastructure damaged by floods;
  •        R86.311 million is provided for Provincial Regeneration Projects; and
  •        R89.400 million for roads infrastructure projects and R54.035 million for property acquisition.


R92.127 million is provided for infrastructure related projects from 2012/13 provincial rollover and revenue over-collection, of which:

  •         R4 million is dedicated to the refurbishment of parliament;
  •         R9 million is dedicated for Social Development facilities;
  •         R19 million is dedicated to the acceleration of housing delivery; and
  •         And a further R59 million for roads infrastructure.

Further allocations are made from 2012/13 provincial rollovers, shifts between departments, and from the contingency reserve for unforeseeable and unavoidable allocations, of which:

  •        R40.135 million will be allocated for diverse Education requirements;
  •        R42.785 million will be shifted for ICT services including broadband connectivity and system  enhancements;
  •         R8.348 million will be allocated for the Khayelitsha police commission of inquiry and a further   R3.000 million for a security strategy;
  •         R4 million for the Green Economy;
  •         R2.259 million for aerial fire fighting; and finally
  •         R1.200 million for the 2014 African Nations Championship soccer tournament.


In the 2013 Main Budget, funding for transversal projects such as ICT and Broadband; Skills Development; the Green Economy and the Regional Socio-economic Development Programme was appropriated and provisionally reserved in a dedicated programme in Vote 3: Provincial Treasury.  These funds were accessible to departments subject to due costing, roll-out, prioritisation and credible implementation plans.

R47.082 million of the Special Project funding is now allocated in the 2013 Adjusted Estimates. A further R204.716 million will be allocated over the 2014 MTEF.

The details of all of the above projects will be expanded upon by the Ministers of each department during their individual vote speeches.


Speaker, all of the policies I have mentioned today contribute to the transitions encapsulated in our vision, OneCape 2040.

In summary -

  • Educating Cape outlines our plan to provide our children with an education that will open doors.
  • Enterprising Cape sets out our programmes to drive an enabling economy that attracts investment and creates jobs.
  • Green Cape lays bare our commitment to reducing the resource intensity of our economy in favour of renewable energy.
  • Connecting Cape speaks to our broadband plan, and our pledge to put infrastructure in place that brings residents closer to the economy.
  • Living Cape outlines how we will build our Province into a place in which citizens are able to lead lives of dignity, and
  • Leading Cape puts forward our plan to get our basic systems of government right so that we can become the best-run regional government in the world.

Put together, these transitions will help us to achieve our goal of creating an open, opportunity society for all in which it is possible for any resident, no matter where he is she is from, to become the next Patrice Motsepe or Mmusi Maimane.

Over the past five years, we have laid the foundation and have started to put our vision into action.

While some benefits are already beginning to accrue, we are confident that over the next three years and beyond the lives of the Western Cape residents – especially our most poor – will begin to improve.

Before I conclude, I would like to thank the entire Western Cape team, but most especially Dr Stegmann and the Provincial Treasury, as well as my Cabinet colleagues, for their continued support and hard work in driving our vision forward.

I would also like to make special mention of my wife, Tracy and wonderful children, Jason and Lauren, for whom I am intent on building a better Western Cape.

We remain mindful of the challenges we face, and are committed to playing our part in helping all residents of our Province to live better lives.

Mr Speaker, I hereby table the Western Cape Medium Term Budget Policy Statement, the speech I have delivered today, the Western Cape Adjustments Appropriation Bill 2013 and the Adjusted Estimates of Provincial Expenditure 2013 for deliberation by this house.

I thank you.

Mr A Winde

Minister of Finance, Economic Development and Tourism

Media Enquiries: 
Bronwynne Jooste
Spokesperson for Minister Alan Winde
Tel: 021 483 3550
Cell: 082 454 4365