The Medium Term Budget Policy Statement indicated that the revised baseline allocations have been prepared taking into account the carry through costs of the 2010 salary improvements, higher costs of municipal rates and service charges, identified savings and reprioritisation proposals. In the 2010/11 financial year the overall increase amounts to R7.3 billion while a R67 billion increase can be seen over the Medium Term Expenditure Framework. The table below shows that an amount of R22.1 billion has been set aside for policy priorities over the MTEF period, proposed wage bill of R26.3 billion as well as adjustment to baseline of R40.8 billion. The Committee supports the adjustment allocations, however it has noted that the proposed wage bill over the MTEF is much higher than the amount allocated for policy reserves due to the inflationary wage settlement. This is a cause for concern. The Committee has noted that some of the departments have not yet filled their vacant positions, but have instead shifted the funds that were budgeted for vacant posts to other programmes. The proposed wage bill seems to be escalating when compared to the allocation for policy priorities. This means that fewer funds are being allocated for development and implementation of programmes, and will thus have a negative impact on the quality and completion of capital projects.