Madam Deputy Speaker, this Bill has been necessitated by the proposed national Justice budget for the 2012-13 financial year, which affects the division of revenue between the three spheres of government. The ACDP notes that changes to these allocations have been made possible by the reprioritisation of funds within the existing expenditure envelope. This is noteworthy and commendable.
The requirements of education and health and the higher than anticipated costs relating to the public sector wage settlement largely determine the provincial share of these additional allocations. Salary costs and infrastructure priorities are the main factors behind the adjustments to the national share, and infrastructure requirements are the main cause of the adjustments for the municipalities. The ACDP supports that.
Looking forward, it is significant that both the provincial and local government equitable shares are to be revised following the 2011 census. The total population and school-going age population account for a substantial weighting in the formula and should result in changes to provincial allocations, with the Western Cape and Gauteng set to benefit at the expense of the other provinces. Clearly, the question as to what impact this will have on service delivery in those provinces that may lose funds as a result of this will have to be considered. The local government equitable share funds the provision of free basic services to the poor and helps defray administrative costs.
A new formula will be introduced next year, in the 2013 budget, and additions of the Medium-Term Expenditure Framework, METF, will compensate for rising costs of bulk water and electricity. It will, as we understand, apply a revenue adjustment factor, reflecting municipalities ability to generate their own revenue to ensure that poorer municipalities are assisted. We look forward to those proposals. The ACDP will closely study them as we go forward, but for the present purposes we support this Bill. Thank you very much.