The Gauteng Treasury has outlined firm plans to work more closely with local spheres of government to improve financial management, accelerate the payment of invoices and identify new sources of revenue generation, provincial MEC for Finance Barbara Creecy said on Friday.

Addressing the Gauteng Legislature during her Budget Vote speech, she said the department had, this year, set aside R6-million to provide “hands-on” support to the province’s two district and seven local municipalities, with the aim of achieving better financial outcomes in terms of Section 34 of the Municipal Finance Management Act.

Moreover, in the coming months, the Gauteng Planning Commission and Gauteng Treasury would develop a framework on how best to achieve “synergy of plans and budgets” within the local spheres of government.

The initial stages of this framework would focus on aligning the planning and budgeting processes at provincial and local government level and would involve a review of the Integrated Development Planning model.

“This exercise will be inclusive of all the municipalities in Gauteng and will be underpinned by the intergovernmental framework adopted in South Africa,” Creecy noted.

The current budget of the Gauteng Provincial Government (GPG) was R84-billion, while the joint budgets of provincial and local governments amounted to over R200-billion.

Outlining areas of focus, she said particular attention would be given to identifying new sources of municipal revenue generation, adding that provincial Treasury would assist municipalities in improving databases that listed citizens who were exempt from municipal tariffs.

“We will assist municipalities with the data-cleansing exercise to ensure that the indigent register is reflective of those who cannot pay for services. In this regard, we think that a proper partnership with the Department of Social Development and Home Affairs will help ensure that the so-called indigent database has greater integrity among residents,” Creecy explained.

Treasury would also work with its counterparts in the Department of Cooperative Governance and Traditional Affairs to fast-track the process of collecting household debt owed to municipalities from those who were not classified as indigent, preventing the accumulation of debt.

As part of its commitment to support local government, the MEC said the provincial Treasury would take urgent steps to ringfence funds to ensure that provincial departments paid their monthly water and electricity bills, as well as their rates and taxes on time.

“Good financial management, like everything else, has to start at home,” she commented.

The Gauteng Treasury was also currently assisting provincial departments to review their existing budgets to ensure synergy between provincial priorities and budgetary allocations, with a view to identifying savings.

These savings would find expression in the adjustment budget to be tabled in November 2014 and inform the 2015/16 Medium-Term Expenditure Framework to be tabled in March 2015. 

“The first area of importance is to improve provincial revenue collection. In the 2009/10 financial year, the GPG collected R2.6-billion, which increased to R4.34-billion in the 2013/14 financial year.

“Over the past five years, we improved the contribution of the provincial share to our overall budget by R1.72-billion and this represents a cumulative increase over five years of 65.73 percentage points,” said Creecy. 

She noted that this had been achieved by institutionalising revenue management in the province, improving communication between the various GPG departments and ensuring compliance with the relevant legislative framework.

The Gauteng Department of Roads and Transport was the leading department in terms of revenue collection over the period under review, collecting R1.54-billion in the 2009/10 financial year.

This grew to R2.7-billion in the 2013/14 financial year, representing an increase of R1.16-billion or 75.78%.

This was followed by the Gauteng Department of Economic Development, which collected R546-million in the 2009/10 financial year and R759-million in 2013/14, representing an increase of R213-million or 39%.

“Although the Gauteng Department of Health experienced challenges over the period under review, it managed to increase revenue collection by R136-million or 33.6%, collecting R404-million in the 2009/10 financial year and R541-million in 2013/14,” noted Creecy.

The Gauteng Treasury’s revenue collection, meanwhile, grew from R54-million in the 2009/10 financial year to R248-million in the 2013/14 financial year.

This was an increase of R194-million or 357% over the period under review.

“On the basis of this track record, Treasury is confident that we can increase provincial revenue generation over the next five years. To achieve this, the department will explore all avenues within the realm of the Public Finance Management Act to aggressively optimise revenue generation and collection.”