Adjustment Budget 2020/2021 (Special)

The Finance Minister, Mr Tito Mboweni tabled the Supplementary Budget in Parliament on 24 June 2020 with the aim to build a bridge to recovery beyond Covid-19. The Public Finance Management Act empowers the Minister of Finance to table an adjustments budget, when necessary. The COVID-19 pandemic and the economic downturn in the country necessitated this adjustments budget.

Government spending was adjusted by removing funds underspent due to delays caused by the lockdown from the baselines of affected departments; suspending allocations for capital and other departmental projects that could be delayed or rescheduled to 2021/22 or later; suspending allocations to programmes with a history of poor performance and slow spending and redirecting those funds towards the COVID‐19 response and government’s fiscal relief package to help speed the recovery from the COVID‐19 shock.

Division of Revenue Amendment Bill had the following impact on the allocations of Mangaung Metropolitan Municipality.

  • The Equitable Share was increased from R800,260 million to R911,525 million resulting in an increase of R111,265 million in the 2020/21 financial year.
  • Urban Development Settlement Grants was reduced by R73,574 million from an allocation of R754,593 million to R681,019 million.
  • Integrated Public Transport Network Grant was reduced by R38,446 million from R242,210 million to R203,764 million.
  • Integrated National Electrification programme was reduced from R4,108 million to R1,112 million that is a decrease of R2,996 million.

Furthermore, the adjustments arising from the approved roll-over amounting to R245,000 million will also be incorporated as approved by National Treasury on the 22 October 2020.

RECOMMENDATIONS

  1. Based on the details as outlined above it is recommended that Council approves the Special Adjustment Budget as contained herein, together with the resolutions as contained here below;
  2. That Council approves changes as contained in Table B1 to Table B10 as well as all other supporting schedules for the Adjustment Budget;
  3. The Municipal Cost Containment Regulations be implemented by all departments;
  4. That debt collection levels for all services be improved and that all departments contribute to revenue collection;
  5. That second Budget Adjustment be considered again in February 2021 after the mid-year performance assessment and re-alignment of capital projects as a result of roll-over application outcomes.