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THIRD QUARTER PERFORMANCE OF THE EPWP INCENTIVE

This presentation discusses the third quarter performance of the EPWP Incentive and its budget allocation. It highlights the funds allocated to EPWP-related projects, the motivation behind the incentive, and the spending on grants for provinces and municipalities.

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THIRD QUARTER PERFORMANCE OF THE EPWP INCENTIVE

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  1. THIRD QUARTER PERFORMANCE OF THE EPWP INCENTIVE Standing Committee on Appropriations, 21 April 2010 Presentation by Tembo, George National Treasury, Public Finance

  2. Overall Budget for EPWP • Funds for EPWP related projects on departmental baselines • Specifically, in this context MIG, IGP and related programmes • MIG – R12.529 billion, R15.069 billion, and R18.322 billion • IGP – R11.315billion, R13.091 billion, and R14.007 billion • All departments and municipalities are expected to be involved in the EPWP and create jobs, even without the EPWP incentive • The incentive is there to motivate, encourage job creation, and to provide resources for further job creation

  3. Budget for EPWP incentive • R4.124 billion provided for the 2009 MTEF for the infrastructure and non-state sector • A Further R2.571 billion provided over the 2010 MTEF for the Social Sector, and Environment and Culture Sector • EPWP incentive for provinces R151.419 million in 2009/10, R400 million in R2010/11 and R800 million in 2011/12 • EPWP incentive for municipalities R201.748 million in 2009/10, R544 million in R2010/11, and R1.108 billion in 2011/12

  4. Spending on the Grants -Prov • EPWP incentive for provinces, 34.2% by end of 3rd quarter, according to National Treasury figures, 42%, according to Public Works’ disbursements • There could be errors in reporting of receipts by provincial departments, or amounts not transferred by Provincial Treasuries if not within specifications of initial or adjusted provincial appropriations • Using the 42% reported by Public Works, disbursements are short of the expected 50% by 8% (as could have been verified and reported by then), possibly due to lack of reporting or slow speed of projects; Public Works and the Provinces themselves would advise better on reasons for underspending • Underspent funds will either be rolled over or returned to the fiscus

  5. Spending on the Grants - Loc • EPWP incentive for municipalities, DPW disbursed 57% by end of the financial year, according to Public Works’ figures. 3rd Q numbers are only available in a months time from National Treasury’s point of view • Disbursement is subject to the performance of EPWP related programmes • Spending on funds provided by the realised incentive depends on the availability of readily implementable plans • Under spent funds will either be rolled over or returned to the fiscus

  6. Way forward • Need to bring appropriated funds more in line with demonstrated capacity to spend. Spending forecasts need to be more accurate or with smaller margins of error • Improving reporting and having more projects to absorb funds • Further engagement of relevant parties is taking place this Thursday in the National Treasury to address teething challenges

  7. Thank you

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