Hon Speaker and hon members, section 214 of our Constitution requires that government ensures a transparent and equitable system to divide nationally raised revenue between the three spheres of government. The main Budget, as we all know, announces government spending for the next financial year and preliminary allocations for the two subsequent years. In the middle of each year, the adjustments process provides an opportunity to revise the main Budget in response to changes that have affected planned government spending for that particular year.
The latest Bill passed in 2009, which is the Money Bills Amendment Procedure and Related Matters Act, requires that the Minister of Finance table a Division of Revenue Amendment Bill with the revised fiscal framework if the adjustments budget effects changes in the Division of Revenue Act, which we passed earlier in the year.
The Division of Revenue Amendment Bill tabled in this House, together with the Medium-Term Budget Policy Statement and the Adjustments Appropriation Bill on 27 October, will, for the first time, be processed in terms of the Money Bills Amendment Procedure and Related Matter Act, Act No 9 of 2009. The Division of Revenue Amendment Bill and its underlying allocations are the culmination of extensive consultation processes between national, provincial and local government.
This year's Division of Revenue Act covers, in detail, all transfers to be made to provinces and municipalities over the next three years. The schedules attached to the Division of Revenue Amendment Bill replace the schedules of the 2010 Division of Revenue Act, which we tabled earlier this year, so as to reflect the updated allocations that take account of adjustments made through the adjustments budget process, and to account for shifts, virements and corrections in the schedules of transfers tabled with the Division of Revenue earlier. The transfers for the two outer years of the Medium-Term Expenditure Framework, MTEF, are not changed and preliminary adjustments to those transfers and the transfers for 2013-14 are shown in the Medium-Term Budget Policy Statement, MTBPS.
The Division of Revenue Amendment Bill is tabled in the face of ongoing global economic uncertainty. Even with the benefit of higher than forecast government revenues, there is still a significant need for prudence, the introduction of austerity measures or the strengthening of existing austerity plans. Members are reminded that levels of government expenditure before the 2008 financial crisis have been maintained, but this was made possible through increased debt.
The adjustments budget makes provision for an additional R7,2 billion to the 2010 Budget. This consists of rollovers, unforeseeable and unavoidable expenditure, higher-than-expected personnel remuneration costs, self- financing expenditure and a saving made in the state debt costs. A R6 billion contingency reserve that was set aside and a projected saving of R3,6 billion at the national level means total expenditure decreases by R2,5 billion. National departments will therefore receive an additional R2,6 billion, provinces R6,1 billion, and municipalities R493 million.
With regard to increased allocations for a range of provincial functions, we have adjusted provincial transfers to cater for a limited number of the many spending pressures that exist in provincial budgets. These are listed hereunder. I will not bore the House with them, because they are there in the adjustments Bill.
Lastly, we also know that in the 2010 Budget the Minister of Finance announced an increase of R10,1 billion to the local government fiscal framework. This adjustment for local government covers, amongst other things, the R391 million added to the local government equitable share to allow the rollover of funds previously held back due to unspent conditional grants. An amount of R92 million was added to disaster relief grants for drought relief for the Mossel Bay Municipality. Ten million rand in rollovers was also added to the water services operating subsidy grants.
Hon Speaker, allow me to express my appreciation to the Minister for his sound leadership, the National Treasury, the entire team for the sterling work that has been put together to produce this Bill, and to the Standing Committee on Appropriations under the steady hand of hon Mshiyeni Sogoni for the contributions to the process of this Division of Revenue Amendment Bill. It is clear that the allocations contained in this year's Division of Revenue Amendment Bill should put government in a better position to deal with the additional pressures placed on the 2010 Budget that were not known when the 2010 Budget was presented. Thank you. [Applause.]