Gauteng finance MEC Barbara Creecy. Picture: VELI NHLAPO/SOWETAN
Gauteng finance MEC Barbara Creecy. Picture: VELI NHLAPO/SOWETAN

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TOUGH global economic conditions had contributed to Gauteng’s estimated economic growth rate for 2015 being decreased to 1.2%.

However, the Gauteng government was confident that there would be room for interventions over the next three years to modernise and revitalise the provincial economy, finance MEC Barbara Creecy said on Tuesday.

Presenting the prepared medium-term budget policy statement to the provincial legislature in Johannesburg, Ms Creecy said revenue would shrink by R400m, while expenditure estimates had risen by R2.1bn, prompting a framework for increased revenue collection efforts and cost containment.

Gauteng remained SA’s economic hub with a R1.1-trillion economy — 35.1% of South African national gross domestic product (GDP). In the current financial year there had been lower growth in SA’s major trading partners, a commodity price collapse, financial market volatility and problems with the supply of basic services, such as electricity supply, said Ms Creecy.

There would be an increased revenue target in the adjustment budget — from R4.5bn to R4.9bn — while expenditure would be revised from R95.3bn to R97.4bn, she said.

The public sector wage settlement this year had prompted hard choices, and an additional R686m had been added to the budget for employee compensation, said Ms Creecy.

The wage settlement remained a priority due to an ever growing demand for services, particularly in the labour-intensive areas of health and education, she said.

The provincial government would continue to focus on core spending in the interests of improving the provision of quality basic services, but would continue to pursue broader objectives of modernising and re-industrialising the provincial economy, particularly in the township economy.

The recent student protests over tuition in the province and nationally had "brought sharply to the fore the ongoing socioeconomic challenges facing many South Africans", Ms Creecy said.

"While the funding of tertiary education is not in our remit, we have in the current financial year set aside R218m for bursaries to assist our youth to pay fees at both universities and further education and training colleges)," said Ms Creecy.

A figure for the shortfall in funding for the controversial electronic tolling system of Gauteng highways had been settled on and R123m had been appropriated for the shortfall of the Gauteng Freeway Improvement project — a 50% contribution.

Speaking at briefing ahead of presenting the budget, Ms Creecy said the money for e-tolling would come from the provinces financial reserve.