By Roux Van Zyl
Finance Reporter

THE Eastern Cape’s budget was boosted by R3bn in Finance Minister Trevor Manuel’s budget speech in Cape Town yesterday, bringing the province’s funds to R27bn for the next financial year.
The province’s has the second largest allocation after KwaZulu-Natal’s R32bn budget, and ahead of Gauteng’s R23,3 bn.
The total allocation to provinces is R171,3bn in the 2007/08 financial year – an increase of R57,3bn, of which R39,2bn go to provincial governments and R18,1bn to local authorities over the next three years.
According to the budget review document, the increased budgets to provinces should be spent on maintenance, rehabilitation and construction of roads and government buildings.
The Eastern Cape’s mega-project, the Coega deep habour project, will see funding increase from last year’s R215m to R866m in 2009/10 – an annual increase of 59,1 percent.
An earmarked R300m has been made available in the coming year for constructing Alacan aluminum smelter. The East London IDZ will receive R251,1m by 2009, an increase of R60m on last year’s budget.
An additional R18bn in funding will be pumped into local governments, aimed largely at beefing up stadiums and public transport in host cities ahead of the 2010 FIFA World Cup.
Mandela Bay Municipality will receive an additional R132m to develop transport infrastructure, as well as the highest spending allocation for stadiums at R435m for its Prince Alfred Stadium.
Funding to host cities will leap to R17,4bn over the next three years – a total increase of R13,3bn. The provinces will also receive conditional grants for arts and culture development totaling R180m in the next year. Last year no conditional grants were allocated for these departments.
However, the much needed agriculture disaster management conditional grant to provinces will fall away after R45m was budgeted last year.
Provision is also made for skills development and attracting qualified people to provincial governments.
“Recognizing the central role played by professional staff in the delivery of quality health care, education and welfare services, additional allocations to provinces will cover the sectors and improvision for staff development in critical skills,” the document states.
On average, municipalities raise about 85 percent of their own revenue through taxes and user charges, while provinces raise only 3,5 percent of their funds and national government receive all their monies form the fiscus.