Finance and Economic Opportunities
(1) Whether the Preferential Procurement Policy (PPP) Framework has been completed; if not, why not; if so, (a) what are the relevant details, (b) can a copy be made available and (c) how is this PPP making provision for social-sector collaboration and for contracting for relevant goods and services by the provincial government and its entities;
(2) what is her Department’s Revenue Enhancement Strategy (RES), (b) what are the new sources of revenue that have been identified and (c) what has been the output from the Fiscal Futures Project to date;
[1] The framework is encapsulated under section 2 of the Preferential Procurement Policy Framework Act.
[a] See Section 2 of the Preferential Policy Framework Act.
[b] See Section 2 of the Preferential Policy Framework Act.
[c] On 16 February 2022 the Constitutional Court handed down judgment declaring the entire Preferential Procurement Regulations 2017 [PPPFR], invalid. Interim arrangements were endorsed by Provincial Cabinet on 9 March 2022 to maintain the status quo and apply PPPFR. Judgment handed down by the Constitutional Court on 30 May 2022 in respect of the clarification sought by the National Treasury in respect of suspension of invalidity of the regulations confirmed that the appeal interrupted the suspension after 21 days and the suspension continues after the judgment was handed down. Countdown on the 12-month period of suspension commenced immediately after the date of suspension. The countdown, however, was halted by the lodgement of the application for leave to appeal in the Constitutional Court. The countdown resumed on 16 February 2022, when the Constitutional Court dismissed the Minister’s appeal against the Supreme Court of Appeal’s order. The Constitutional Court confirmed that the suspension of the declaration of the order of invalidity of the 2017 Regulations is still valid for the remainder of the 12-month period, namely until 26 January 2023.
[2] The Department’s Revenue Enhancement Strategy focusses on maximising existing revenue sources by:
- reviewing and adjusting the tariff rates and structures annually,
- collaborating with entities to adjust tariffs to become self-sustainable,
- incentivising departments to maximise their own revenues through allowing them to retain these revenues,
- improving debt management strategies,
- exploring possibilities for donor funding,
- developing improved and accurate revenue forecasting models, and
- exploring co-funding delivery initiatives with stakeholders.
[b] The Provincial Treasury is not actively exploring additional revenue sources but is focusing on enhancing the effectiveness of the existing revenue sources as outlined above.
[c] Provincial Treasury has modelled the Fiscal Strategy for the 2022 Medium Term Expenditure Framework on the fiscal scenarios developed by National Treasury. In this regard the Provincial Treasury has adopted National Treasury’s Conservative Fiscal Scenario. The Western Cape Government’s Fiscal Strategy is outlined in Chapter 3 of the 2022 Budget Overview of Provincial Revenue and Expenditure. The key principles underpinning the Provincial Fiscal Strategy include the protection of basic services, unlocking allocative efficiency, enhancing productive efficiency and ensuring long-run fiscal sustainability.
The 2022 Budget gives effect to these principles through:
- sustaining the fight against the covid-19 pandemic,
- supporting the recovery plan priorities of jobs, safety and wellbeing,
- protecting frontline services, including education, health and social development,
- rebalancing the composition of expenditure by increasing spending on infrastructure,
- supporting effective local governance,
- driving efficiency in expenditure by driving value for money,
- mitigating risks both natural and human-made [i.e. cyber security], and
- ensuring long-term fiscal sustainability by replenishing provincial reserves.
