The net effect of the Bill before the House today is that the national expenditure for the 2012-13 financial year was reduced from R969,365 billion to R967,463 billion. The national allocation has been adjusted downwards by R5,860 billion whilst the allocation to provinces has been adjusted upwards by R3,958 billion.
Regrettably, the allocation to local government, where service delivery is supposed to be closest to the people, has remained unchanged. The amounts allocated to provinces will need to be changed in future years following the results of the latest census 2011 statistics, where particularly Gauteng and the Western Cape have experienced a large influx of citizens by way of migration, which obviously places a burden on their financial resources. Moreover, the process in which the provincial allocations are adjusted needs to be expedited. Growing provinces need to receive additional funds to manage the resultant surge in the demand for services.
These demands are a current reality and, therefore, the provincial budget allocations need to reflect this. The most noticeable adjustments to municipalities include R123,11 million for the African Cup of Nations, R6,46 million to the Regional Bulk Infrastructure grant and an increased provision of R62,859 million for the Expanded Public Works Programme. A large proportion of monies to provinces and municipalities reach these entities by way of transfers and subsidies from national funds.
Unfortunately, there is huge underexpenditure and mismanagement of these funds by provinces and municipalities. When the appropriations committee enquires about this, the stock answer is virtually always a lack of capacity to properly spend the funds allocated. Quite often the entity paying over the transfer and/or subsidies refuses, quite correctly, to pay the funds to the receiving entity as the receiving entity neglects to comply with the provision of plans and documents required by the paying entity. The result is often major underexpenditure in respect of funds provided in the budget.
A case in point is the Expanded Public Works Programme, which again receives a higher allocation in the Division of Revenue Amendment Bill despite the fact that this important job creation project has experienced major underexpenditure during the last few years. But then, the cited lack of capacity is not surprising if one considers the reply to a parliamentary question by the DA in which the hon Minister for Co-operative Governance and Traditional Affairs confirms that more than a hundred municipal managers have been dismissed for financial misconduct since the last local government elections.
Entities paying out funds to provinces and municipalities must therefore make sure that the receiving entities have both the capacity and the ability to administer the funds received to ensure proper service delivery to citizens before such grants and/or subsidies are paid over. The DA supports the Division of Revenue Amendment Bill. Thank you. [Applause.]