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Department of Defence's 2008/09 MTEF Budget (Vote 19)

PRESENTATION TO THE PORTFOLIO COMMITTEE ON DEFENCE. Department of Defence's 2008/09 MTEF Budget (Vote 19). INTRODUCTION. Planning and Budgeting guidelines issued Sep 06. Plan and estimate of expenditure evaluation – May/Jun 07. MTEC submission with policy proposals to NT – Aug 07.

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Department of Defence's 2008/09 MTEF Budget (Vote 19)

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  1. PRESENTATION TO THE PORTFOLIO COMMITTEE ON DEFENCE Department of Defence's 2008/09 MTEF Budget (Vote 19) 2008_PCD_Bud_Brief

  2. INTRODUCTION 2008_PCD_Bud_Brief • Planning and Budgeting guidelines issued Sep 06. • Plan and estimate of expenditure evaluation – May/Jun 07. • MTEC submission with policy proposals to NT – Aug 07. • MTEC deliberations – Sep 07. • First letter of allocation – Nov 07. • Final letter of allocation – Jan 08. • Expenditure commenced on 1 Apr 08. • Restructuring should be finalised during FY2008/09 and will impact on budget allocations per main programme.

  3. AIM 2008_PCD_Bud_Brief • To obtain the Portfolio Committee on Defence’s support for Defence’s 2008/09 Estimate of Expenditure as incorporated in the 2008 Estimate of National Expenditure and tabled in Parliament by the Minister of Finance on 20 February 2008.

  4. SCOPE 2008_PCD_Bud_Brief • Budget allocation trend. • MTEC submission and allocations. • Vote 19 summary. • Vote 19 expenditure trends. • Questions & discussions.

  5. Budget Allocation Trend 2008_PCD_Bud_Brief

  6. Budget Allocation Trend 15,5% 4,6% 4,3% 1.2% 2008_PCD_Bud_Brief

  7. MTEC Submission & Allocations 2008_PCD_Bud_Brief

  8. MTEC SUBMISSION 2008_PCD_Bud_Brief

  9. MTEF ALLOCATIONS: 2008/09 – 2010/11 (Final Letter of Allocation from NT) VOTE 19: DEFENCE 2008_PCD_Bud_Brief

  10. Baseline Efficiency Savings 2008_PCD_Bud_Brief

  11. Vote 19 Summary 2008_PCD_Bud_Brief

  12. 2008 Baseline Allocation per Economic Classification 2008_PCD_Bud_Brief

  13. 2008 Baseline Allocation per Main Programme 2008_PCD_Bud_Brief

  14. Defence Budget Overview 2008_PCD_Bud_Brief • 7% average annual growth over MTEF period • 04/05 Rb 20,2 to Rb 26,1 in 07/08 to Rb 32,2 in 10/11. • Additional funding Rm 217 (08/09), Rm1,228 (09/10) and Rm 1,809 (10/11) • General modernisation capability – A400M • MSDS • Defence infrastructure adjustments • Foreign exchange rate adjustments • Accommodation charges adjustments • Inflation adjustments • Salary adjustments • Efficiency savings of Rm23 (08/09), Rm50 (09/10) and Rm99 (10/11) • Discontinuation of Programme 9 with effect from 1 April 2008.

  15. Revenue Estimates

  16. Vote 19 Expenditure Trends 2008_PCD_Bud_Brief

  17. Administration 2008_PCD_Bud_Brief • Administration Programme has doubled due to devolution of funds from NDPW (Property Management). • Property Management – 18% average growth over MTEF. • Departmental Direction – 11,5% average increase due to staffing of NCACC inspectorate. • Defence Foreign Relations increase due to increased representation abroad – Military Attaché offices in Tunisia, Vietnam, Pakistan and PRC.

  18. Landward Defence 2008_PCD_Bud_Brief • 10,9% annual average increase over MTEF • MSDS • Operational vehicle fleet modernisation • 36,1% increase in General Training • Works Regiment • MSDS training • Large increases in Infantry, Support and Operational Intelligence is due to provisions for the new generation infantry fighting vehicle, mobile intelligence processing system, mass field feeding system and operational supply support product system • 165,8% increase in Payment for Capital Assets is due to replacement of vehicles, diesel engines, hand tool sets, parachutes and small craft (Prog 9).

  19. Air Defence 2008_PCD_Bud_Brief • 9,5% annual average growth over MTEF. • Transport & Maritime increase of 46% due to strategic airlift capability programme set to peak in 2010/11. (Previously within Programme 9) • Air Combat high points in 2005/06 & 2008/09 due to delivery milestones of Hawk and Gripen programmes. • Increases in Training, Command & Control and Operational Support & Intelligence sub-programmes over MTEF are due to upgrade of Astra training aircraft, replacement of fire fighting vehicles and upgrade of radar and ground navigation systems.

  20. 2008_PCD_Bud_Brief • 9,4% annual average decrease due to commissioning of the four frigates and three submarines. (Previously Programme 9). • Increase of 24,4% in Maritime Training is due to increased number of members going through the military skills development system.

  21. Military Health Support 2008_PCD_Bud_Brief • 11,9% annual average growth over 2007 MTEF period • 33,5% increase in Strategic Direction • Increased staff levels • Inspection of subordinate offices • 11,6% increase in Special/Tertiary Health Service • Remuneration of health professionals • Anti-retroviral rollout • 17,7% increase in Military Health Support • Chemical/Biological defensive capability for 2010 FIFA World Cup • Military Health force preparation exercises • Large average annual increase of 33% in Military Health Training Capability: • Increased MSDS intake • Training of MSDS members in emergency care for 2010. • Increase of 12,5% in Product Support Capability to alleviate pharmaceutical shortages.

  22. Defence Intelligence 2008_PCD_Bud_Brief • Average annual increase of 19,6% in Operations is due to the intended investment in a strategic collection capability. • This is also the reason for the increase in transfers and subsidies (Prog 9).

  23. General Support 2008_PCD_Bud_Brief • 11,6% average annual growth over MTEF • Increase of 18,2% in Joint Logistic Services over MTEF is due to increased maintenance and repair of Defence Infrastructure. • Increase of 10,8% in CMI Services over MTEF is due to upgrading and improving defence information and communication systems, SITA-D tariff increases and computer license fees. • Increase of 23,5% in Technology Development is mainly due to the transportable platform mounted power supply, tactical electronic warfare system and the new static electronic warfare system projects that are advancing to the development and acquisition phases. (Prog 9).

  24. Force Employment 2008_PCD_Bud_Brief • 6,1% average annual growth over MTEF due to increases in Regional Security (Peace Support). • Special Operations increase with 11,2% on average over MTEF. • Personnel retention (incentive scheme) • Acquisition of specialised equipment • Decrease in Support to the People is due to the gradual withdrawal of support to the SAPS. • Increase of 19,9% in payments for capital assets is due to procurement of trucks, trailers, vehicles, excavating equipment, material handling equipment, communication equipment and training aids for use during peace support operations.

  25. Revenue Management: Progress and Trends • Budget and accounting subsystems SCOA compliant. • Significant improvement on accounting for revenue. • Result: • Provision of meaningful management information. • More accurate revenue estimates. • Improved accountability. • Improved control over collection. • Revenue management policy - May 2008. • Review of revenue tariffs - May 2008. • Impact of new PFM Bill – retention of specific revenue. • Training in process.

  26. CONCLUSION 2008_PCD_Bud_Brief • Defence, through its Strategic Business Plan and Budget, is supporting Government’s Plan of Action. • Defence’s budget composition reflects cluster priorities. • TheCapital renewalof Landward Defence and Military Health Service remains under funded. • Restructuring of the DOD will result in changes to budget allocations from 2009/10 onwards.

  27. Discussion & Questions 2008_PCD_Bud_Brief

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