KZN Mid-Year Budget Performance: “The good, the bad and the repeat offenders.”

Francois Rodgers, MPL

DA KZN Spokesperson on Finance

Note: This is a member statement delivered by Francois Rodgers during a sitting of the KZN Provincial Legislature today.

Madam Speaker the 2014/15 midterm budget performance hearings can only be described as “the good, the bad and the repeat offenders.” The midyear report is again evidence of certain departments with ineffective leadership; the inability to understand the purpose of a budget; annual performance targets and the incapacity to effectively implement such. It is again clear that not all MEC’s and senior officials grasp this fundamental task and continue to create financial challenges for the province of KZN. This flies in the face of repeated statements made by the National Minister of Finance and our very own MEC of Finance, who continue to highlight the financial woes that face our country and province. The time has arrived to reward the performers, and discipline with consequences the under performers; the province can no longer allow serial offenders to have carte blanche over provincial funds. Effective leadership has nothing to do with titles but everything to do with translating vision into reality.

Allow me to begin with our Honourable Premier’s department, the very leader who should set the tone and lead by example during these challenging financial times.

The Premier’s department has underspent on its midyear expenditure by 38.5% or almost R170 million with zero expenditure on infrastructure!  The Premier has decided to increase its staffing capacity from 428 to 687 an increase of over 60%, a department whose mandate is to co-ordinate not to implement services. Is this the way to lead; are we giving the residents of KZN more bang for their buck?

The spending trends in this department are unacceptable, when projects have been rolled over, not once but twice, knowing full well when these projects are finally implemented what effect inflation will have on the final bill.

Another Department that continues to spend, oblivious of its budget, or the current financial slump, is the Royal Household. This department, Madame Speaker, has managed to overspend its midterm budget by 46% or over R13 million – an overspend of 80% in the first half of financial year.

The reason: over expenditure on entertainment, travel and subsistence and repairs to palaces of the Royal Household. This while we have existing transversal resolutions in place regarding expenditure patterns; this while the Royal Household is already under a first charge relating to over expenditure in previous years.

My question Madame Speaker is:  will we see consequences for blatant disregard of directives from this legislature?

Allow me to delve into the murky waters of the over expenditure of more than 7 million by the Royal Household on Palace refurbishments. What happened to cash blocking? Are all departments given equal treatment? The Premier steps in and transfers R7.8 million to the Royal Household without any consultation with his portfolio committee?

Under expenditure on the other hand, Madam Speaker, should be declared a treasonable offence, it is the very under expenditure that affects the poorest of the poor. The following departments have shown significant under spend:

  • Sports and Recreation and Community and Safety managed to spend only 85%.
  • Provincial Treasury 84%.
  • Economic Development 69%
  • Arts and Culture 64%
  • Office of the Premier 61.5%

Collectively these departments managed to under spend their midterm budget by almost R600 000 million.

While on the matter of the poorest of the poor let me shock you with the following figures almost R5 million rand remains unspent on EPWP grant funding, the very mandate given to departments to create jobs.  Here again we identify the repeat offenders.

  • Agriculture only managed 54%.
  • Economic Development 94%.
  • Education 28%.
  • Community Safety 92%.
  • Social Development 81%
  • Arts and Culture were not able to spend 1 cent.

Is this an indication of effective leadership? Will there be consequences? Will we see heads rolling?

Madame Speaker when I talk of effective governance we need to ensure that every entity is performing optimally. This province spends in excess of R2 billion rand on public entities, entities whose sole mandate is to assist the province with effective service delivery and effective management; however 50% of these entities are delivering the goods, but the other 50% are ineffective and bottomless pits into which our valuable rands disappear, with little or no effect on the ordinary citizen of our province. This situation can no longer continue unabated, if it can’t be fixed, lose it or establish a vehicle that can produce effective outcomes; ineffective employment agencies for cadre deployment is unacceptable.

Madame Speaker when it comes to finance and balancing budgets we don’t only have one elephant in the room, we unfortunately have two, namely Education and Health.

Education is projecting an over expenditure of over half a billion rand not entirely of our own making.  Budgeting for a wage agreement of 6.4% , big brother negotiates a 7.4% increase, then turns his back on KZN, resulting in a R580 million shortfall. It is of grave concern that we continually postpone the joint meeting between national and provincial stakeholders in Education to address this crisis, behaving like the proverbial ostrich is not the solution.

The Department of Health is projecting over expenditure in excess of R200 million, with a predicted 120 million rand in litigation costs, this cannot be allowed to continue unabated.

In closing Speaker, the DA’s message is uncomplicated, what you plan, you budget for, what you budget for, you spend. If MEC’s and Departments are unable to do this, enforce consequences; reward the performing departments with greater allocations and punish the non performing departments with less, it’s that simple. Take steps against non performing officials, start walking the talk.