27 November 2012

South Africa: Using Public Expenditure As an Instrument for Job Creation

press release

Mpumalanga Government is using expenditure to create jobs. This is according to the study conducted by the Department of Finance into the impact of public sector expenditure to service delivery.

The outcomes of the study confirms that the Provincial Government is making a direct impact with its expenditure of more than R30 billion per annum - in terms of building the economy and creating jobs in the process, said MEC Pinky Phosa.

The study shows that the associated GDP (gross domestic product) multiplier for Mpumalanga Government expenditure was estimated at 1.51 during the 2010/11 financial year.

MEC Phosa said: "In other words, for every R1 we have spent in this period, an additional 51 cents of economic activity was potentially stimulated."

It was also estimated that 157 000 employment opportunities that were created could be associated with the procurement choices that the Mpumalanga Government made regarding allocation of expenditure in the same period.

The provincial government has spent R17.9 billion or 57.7% of the total appropriated budget of R30.9 billion as at the end of October 2012. This is show an improvement in expenditure compared to the same period in 2011/12.

MEC Phosa underscored the importance of utilising the Provincial Government budget as an instrument for making a difference in the lives of the people. She said delivery-oriented expenditure is also critical to address the triple challenges of unemployment, poverty and inequality in the Province.

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