KZN provincial budget tweaked for pandemic
Durban - The KwaZulu-Natal government is set to delay certain programmes and the filling of some vacancies across departments in order to raise around R11.5 billion to be channelled towards the fight against Covid-19.
Finance MEC Ravi Pillay announced this when he tabled the provincial Special Adjustments Budget yesterday.
He said the budget was a stark reminder of how public finances had been overstretched by the economic and health crisis resulting from the Covid-19 pandemic.
Overall, the province has redirected approximately 5% of the provincial budget towards Covid-19 purposes, therefore 95% of the budget tabled in February this year remained.
While the province continued to remain cash positive, Pillay said the crisis had required more resources.
The National Treasury indicated that the province should reprioritise R6.2bn from within its resource envelope towards the provincial Covid-19 response.
However, Pillay said that alone was not sufficient and departments at the coalface of the response were also expected to effect some internal reprioritisation in order to meet the budget demands.
Additional funds were also received through the conditional grant allocations to support the departments.
Preliminary unaudited figures for Covid-19 expenditure as at July 15 show the province has spent close to R2bn.
The Department of Health needs R8.2bn, Education R2.8bn, Social Development R300 million and Transport for learners R214m.
Pillay said it was also decided to allocate R300m towards the provincial economic recovery response and to re-allocate R200m to Transport, and towards infrastructure projects such as upgrades to roads leading to clinics.
Dissecting the provincial Health Department’s R8.2bn budget, Pillay said they had to take into account the provision of personal protective equipment (PPE), ventilators, and additional staff, ICU beds and additional infrastructure.
The infrastructure provided includes converting existing wards into Covid-19 wards as well as quarantine and isolation sites across the province.
The costs also provided for temporary field hospitals in areas such as Durban, Pietermaritzburg, KwaDukuza and Empangeni.
A large portion of the costs related to additional staff, such as ICU staff, doctors, nurses and tracing teams at a cost of R3.2bn, while the infrastructure required for the Covid-19 response amounted to R1.7bn.
Pillay said the department reprioritised at least R1.4bn from within its own budget.
The costs in the Department of Education amounted to R2.8bn. The amount also took into account some of the costs of repairing schools vandalised during lockdown, the provision of chemical toilets at schools that did not have adequate toilet facilities, the provision of water to schools, PPE and additional cleaners.
The costs in Social Development for providing care to the homeless during lockdown and providing food parcels to destitute families have been calculated at R25.7m and R239.1m respectively.
Pillay said the department also indicated that R35.3m was needed to address gender-based violence.
An amount of R175.9m, held in the Provincial Revenue Fund, was also reallocated. A further R190m was taken from the provincial contingency reserve towards the Covid-19 budget requirements, but R200m remained as a contingency reserve for any unforeseen budget pressures that might arise in the year.
A number of the conditional grant frameworks were amended to allow for Covid-19 expenditure, including the Maths, Science and Technology Grant and the HIV and Aids (Life Skills Education) Grant.
The grants would be used for some of the catch-up activities following the closure of schools during lockdown.
Funds might also be reprioritised within the National School Nutrition Programme Grant for additional sanitisation in food preparation and distribution areas, and the provision of PPE.
Grants such as the Mass Participation and Sport Development Grant might be used to provide additional support to sports people and support staff while sporting events were suspended, Pillay said.
He said the provincial executive council decided to allocate R300m to the provincial economic recovery response after extensive engagements with the private sector.
He said the Covid-19 pandemic also had an impact on the province’s revenue streams and that needed to be taken into account in the budget reprioritisation exercise.
“Lower revenue than projected is anticipated, particularly as far as gaming and betting taxes are concerned, as well as tourism revenue to be collected through the Ezemvelo KZN Wildlife public entity,” he said.
The impact of this is that the expected revenue from casino and horse racing taxes had to be revised downward by R368.4m and the amounts collected by the KwaZulu-Natal Gaming and Betting Board from licence renewals and applications for new licences was revised downwards by R11.5m.
Ezemvelo KZN Wildlife’s revenue projections were severely affected by the impact that the lockdown had on tourism activities and the entity expects to fall short of its revenue targets by R208.4m.
“The effects of this devastating pandemic are projected to be severe in KwaZulu-Natal with a negative GDP growth rate of more than 8.5% in the current year.”