KZN Treasury Budget Debate

Francois Rodgers, MPL

DA KZN Spokesperson on Finance

Thank you Madam Speaker.  At the outset of my debate let me take this opportunity to congratulate Honourable Scott on her appointment as MEC for Finance in KZN.  The MEC can count on the support of the DA caucus if her term will focus on and implement the following:

  • Realistic budgeting focused on tangible and measureable outcomes in line with the NDP and PDGP.
  • Stringent fiscal oversight and control.
  • Financial accountability with consequences for offenders and non-performance.
  • Sustainable and effective service delivery, implemented with efficiency and realistic costs.

It is abundantly apparent that the next few years will be a serious challenge, particularly in a declining and lethargic economic climate. South Africa and KZN has not escaped this claustrophobic and restrictive financial atmosphere. Global economic environments are not accurately predictable, particularly when outside influences in the global village have an impact on our very own backyard.

It is however possible to ride this economic storm, with effective leadership who poses the political will to steer the ship in the right direction, until the weather clears and it will clear, as it always does.

Couple this economic instability with the severe equitable share reductions, which in total amount to R5.6 billion over the next three years for KZN and the end of the buffer funding in 2016/2017 of  R1.2 billion, it is as clear as mud that we are heading into turbulent economic waters.

Now is the moment to asses our position, asses the instability and challenges ahead, re-strategise, find sustainable solutions, baton down that hatches and ride out the storm.

Desperate times require desperate measures. Honourable Members to get through this is going to require financial ingenuity to achieve the essential savings.  These measures may not always be well-liked but implementation will demand strong leadership. Cuts in expenditure need to focus on areas that have little or no effect on the priorities of the NDP and PGDP.

 

Treasury’s Annual Performance Plan is succinct when it talks about:

  • Eliminating wasteful expenditure.
  • Fighting fraud and corruption.
  • Spending on budget and
  • Implementing cost cutting measures vigorously.

I was encouraged by MEC Scott’s statements during last week’s budget debate when she made the statement that as a province one of the required actions is to take a long and hard look at current burdens on the budget particularly when it comes to salaries.

This will be no easy task as it is an emotive and sensitive issue and is always politicised. It will obviously have a further damaging effect on an already shaky marriage between the ANC and its labour alliances but the time has come for the tail to stop wagging the dog.  It’s time to take control of the situation and put the people first rather than being guided by internal power plays within the ruling.  KZN cannot afford a financial shipwreck, if the marriage is over file for a divorce.

An expense comparative for the past 4 years indicates the KZN salary obligation has increased exponentially by almost R200 billion – nearly 50 percent or an additional 12000 posts created over the same period. It is clearly evident that this is not sustainable, particularly when facing the financial challenges of the next 3 to 4 years.  Continuing to create a bloated bureaucracy will ultimately lead to over expenditure and eventually have a negative impact on service delivery.

KZN can no longer afford to tolerate fraud, corruption, financial mismanagement and maladministration.  The ANC and its leaders in this house should stop talking and start walking the talk.

It is unacceptable that since 2009, 172 forensic investigations with a total value of R1.6 billion have been investigated by Treasury.  Of these, 81 have been completed with 25 completed in 2012/2013 at a cost of R26 million while a massive 91 remain in progress.  A quick calculation will inform you that this will come at a cost to the KZN community of over R1 billion rand.

Treasury need to lead by example and play a pedantic oversight role in fiscal prudence in all departments. It is unacceptable that the President has to appoint a Special Investigation relating to the affairs of the KZN Provincial Treasury. Perhaps Honourable MEC, Treasury should now adopt the attitude of “prevention is better than cure!”

There is however one anomaly in the President’s investigation into KZN Treasury that is most puzzling. Interrogating both the accounting officer and AG’s annual report for 2012/13 one is given a picture that Treasury has no skeletons in its cupboard, a clean financial bill of health.  Yet the President suspects that something is rotten in the department. One can only hope that the ANC in its provincial and national structures in not dragging KZN down through its internal political power struggles.

Chairperson, we have two options ahead, the high road or the low row. The high road will see the province planning and implementing the principle of fiscal conservatism.  The low road will be to do the same thing over and over and expecting a different result which, to use the words of MEC Scott, will ultimately lead to falling off the proverbial fiscal cliff.