Government injects R202bn into economy

Posted On Wednesday, 31 July 2013 18:15 Published by Commercial Property News
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Over R200 billion has been injected into the economy by the South African government last year, Statistics South Africa (Stats SA) said on Wednesday

Pali LehohlaAccording to the 2012 results of the Capital Expenditure by Public Sector Survey, which were released today, the total actual capital expenditure by public-sector institutions increased by R21 billion from R181 billion in 2011 to R202 billion in 2012.

Capital expenditure refers to any expenditure incurred in or incidental to the acquisition or improvement of land, buildings, engineering structures and machinery and equipment. The expenditure normally confers a lasting benefit and results in the acquisition of or extends the life period of a fixed asset.

According to the report, the bulk of spending went into new construction works, with plant, machinery and equipment lagging behind.

At least 137 billion was spent on new construction works, while R38 billion was spent on plant, machinery and equipment, up from R24 billion in 2011.

"You will see that expenditure on machinery and the like is fairly low, but expenditure on actual work is fairly high consistently across government and it continues to rise over time," Statistician General Pali Lehohla said.

The reporting units for the public sector capital expenditure are made up of national government, public corporations, provincial government, municipalities, higher education institutions and extra budgetary accounts and funds (for example SARS).

"Service delivery is influenced by long-term infrastructure but municipalities are not investing adequately in equipment and machinery. Employment-related costs in municipalities continue to grow. But there is no spending on equipment and machinery. This raises the question: Who is doing the work?" asked the Statistician General.

Public corporations spent the most, according to the release. In 2008, public corporations spent R30 billion and in 2012, had spent R79 billion on new construction works.

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