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Budget Speech 2021

8. Division of Revenue


Madam Speaker, let me turn to the division of revenue.


The 2021/22 Division of Revenue stands as follows: 48.7 per cent of nationally raised funds are allocated to national government, 41.9 per cent to provinces and 9.4 per cent to local government. This is after providing for debt‐service costs, the contingency reserve and provisional allocations.


The provincial equitable share will be augmented by R8 billion for provincial health departments in 2021/22 to deal with Covid‐19. Of the R10.3 billion for vaccines, R2.4 billion is allocated to provincial departments of health to administer the Covid‐19 vaccine programme.


Government will also put in place a no‐fault compensation fund to cover claims in the unlikely event of any severe vaccine injuries, allocations to which will be announced in due course.


The local government equitable share is set to increase to 9.7 per cent of the Division of Revenue in 2023/24. We are aware that financial governance remains a challenge for many municipalities. Therefore, the Municipal Systems Improvement Grant is extended for the rollout of the District Development Model.


We must encourage collaboration and partnerships between municipal councils, labour, communities and the private sector around the principles of shared risk and shared reward. There needs to be a transition to smart local government and innovation. At the same time, well‐functioning municipalities require that residents pay for services rendered.