KZN EDTA – A department of unanswered questions

Democratic Alliance 2015/16 KZN EDTEA Budget Debate by Ann McDonnell, MPL, DA KZN Spokesperson on Economic Development, Tourism and Environmental Affairs:

DURING what is currently a momentous time in South Africa, I would like to mention four specific events;

  • It is 21 years since the end of the destructive, hurtful, wicked Apartheid Government
  • It is one year since we were elected and sworn in to the 5th Legislature with a mandate to improve the lives of the people of KZN
  • This past weekend, the official Opposition Democratic Alliance elected Mmusi Maimane to lead the party into the future, building on the growth and excellent leadership of Helen Zille for the past eight years.  Freedom, Fairness and Opportunity is the offer and people are responding – clean governance is very appealing.
  • And in the bastion of learning for struggle icons, Fort Hare University, the Democratic alliance Student Organisation (DASO) were recently elected, beating the ANC aligned SASCO student body.

Out of the ashes of Apartheid, a united and prosperous South Africa can emerge triumphant – one which provides dignity to all South Africans.

Tough times

In spite of these positive changes, our country is facing tough economic environment.  Economic growth is down, even from the low 2% forecast which has now been adjusted to 1.7%.  To add to our economic woes, load shedding is killing commerce and industry.  ESKOM’s failure to deliver is endemic meanwhile its incompetent leadership is paid millions to leave.

The current drought, if not broken, could make the power crisis look like a picnic – if there is no water, there is no life.

Our provinces’ socio-economic factors, spurred on by lack of good governance, have led to tragic Xenophobic attacks which are having a detrimental effect on tourism – even the recent tourism Indaba was affected.

The increased cost of living is hitting the average citizen hard.  A 25% electricity hike is imminent while debt is strangling households, business and local government.

Protests out of desperation reflect the legacy of empty promises and pathetic service delivery.  Many are destructive and do not send a good message.

Job Creation

The facilitation of job creation in KZN is the mandate of the EDTEA department.  Every program should have this as its measurable KPI.  A look at the 2015/16 Estimates for EDTEA, page 141, under Vote 4 shows that:

  • Program 1, Admin – expenditure is up 32million. The creation of jobs within the department and entities is not its mandate!
  • Tourism program 6 expenditure budget is down R60m – a 17% drop;
  • Environment, Program 7 is down by R10 million.

The DA welcomes the temporary suspension of the Strategic Events budget – which was in effect the unfunded mandate devolved to this department. We also support the Honourable Chair’s concern on the partially funded projects and the impact they may have going forward.

Entities

The many entities funded by EDTEA account for just over R2 billion this financial year.

Huge financial bailouts and dismal performance of National SOEs, namely ESKOM, SAA, Post Office and the SABC should be a big red flag for this department when it comes to its oversight role.  Value for money and accountability are not negotiable.

The DA is still waiting for news of the paying back of R25million – paid in advance – for the KZN Jazz festival that never happened.  We are also waiting for news of disciplinary action against those officials responsible.

Value for Money

Fiscal Discipline and Treasury’s probe on value for money is now more urgent than ever.  The following must be scrutinized;

  • Are entity’s Admin/Board/CEO costs providing the department with value for money in these times of cost cutting?   The DA has calculated the percentage of salaries compared to current payments of eight of the larger entities.  Some have huge capital spend, so salary expenses as a percentage are much lower.  In Dube Trade Port’s case the figure is 22%.  On the other end of the scale the Sharks board and Ezemvelo, which deliver good service in bather protection and conservation respectively, spend 70% of their current payments on salaries.
  • The possible consolidation of the number and scope of entities. TIKZN and tourism KZN recently aired a joint radio ad – this may be the way to go.  Tourism is an Industry which has a great track record and could join with TIK saving on admin, board members etc
  • The sharing of services such as audit committees amongst entities
  • Whether we are abiding strictly to national guidelines on the payment and increases of board members and consultants remuneration
  • The rate of return on our investment in terms of job numbers.  An example – The Growth Fund Trust: the 5 year Plan has a KPI of 291 jobs in 15/16 financial year dropping to 95 in the outer 4 years of the 5 year plan.  The disbursements in the plan are R291million for 2015/16 going down to R95million in the outer years.  This looks like R1million per job?   Is this value for money?  We need to know

KZN Ezemvelo Wildlife

The DA commends Ezemvelo KZN Wildlife’s efforts in the continued war against poachers.   However the rhino poaching scourge continues to increase.  KZN’s porous borders have been in the news lately for a different reason.  This is a major threat to KZN’s Rhino population and must be urgently addressed. Some scary stats to reflect this crisis are – in 2012 there were 668 rhinos poached, in 2013 the figure rose to 1004 and last year it was 1 214. The figure as of April 2015 is 393 rhinos.

Our game reserves are iconic and it must be our focus to attract tourists together with the beach and bush experience we offer

A further concern is that Ezemvelo itself may not be the best option for the hospitality service offered in our resorts.  In fact we could be better served by outsourcing this service, a view shared in 2013 by now retired DA MPL Radley Keys.

The inability to spend on road and staff accommodation infrastructure in the Hluhluwe Imfolozi Park is an embarrassment.  The portfolio committee has been misled many times over this with promises that the road contractor would be on site “next week”.

This non-performance reflects on the entire organisation and department, and ultimately the Legislature, making people suspect corruption.  If maintenance is not done we lose tourism which has a ‘mud slide’ effect on income and jobs.

A report on this failed road contractor has yet to surface.  We need to know;

  • How much was he paid for the non-delivery of the desperately needed road resurfacing?
  • Who was the official monitoring the contract?
  • What action has been taken this individual?

Yet another question is – what has happened about the R5million fine that EKZN received from the Green Scorpions last year for draining of the Wetland in Jozini without an EIA?   Has it been paid or is the appeal still pending?

Liquor Board

The liquor board costs currently fall far short of its income – and this for regulating a multi-million industry which results in many social problems.   It should be breaking even.  It should not be subsidised.  This would free up investment for training and job creation.   Legislation or regulations need to be enacted to make the license fee appropriate to the turnover, as was done in the Gambling board, so that smaller taverns are not compromised but large sellers contribute more.

Extended Public Works Programme

In the estimates, there is a 50% drop in EPWP jobs, from 16 829 in 2014/15 to 8 162 in 2015/16.  The figures speak for themselves. On page 136 we also see there is no budget for the outer years.  I hope this is awaiting program submissions and not the end of this program which is an opportunity for poor people to feed their families while on contract albeit it a temporary ‘propped’ employment.

Tourism KZN

As confirmed in the Budget Hearings, Tourism KZN currently pay an annual rental of R6.4m – seems high when the industry is reeling from the effects of Xenophobia, load shedding and a failing economy as I have mentioned.

Dube Trade Port

Dube Trade Port is a great initiative and one to be proud of.   The threat here is that we are in competition with players around the world for industry and business and sometimes our more rigid labour legislation cuts our competiveness compared to other industrialising countries bidding for the same industries.

Labour needs to be protected from abuse, and workers’ rights must be held sacrosanct. COSATU affiliated Unions, strong in the ANC alliance, can no longer be player and referee to the detriment of our country attracting large job creation projects.

On a visit last week to the agrizone, we saw 4hectares of glass tunnels still standing vacant, awaiting a tenant.  We must be in a position to respond to changing market requirements in order to avoid loss of income and so investment opportunities.

The bottom line is that we are spending tax payers money not our own!

Environment

Climate change is a genuine threat to our country.  Other provinces seem to be way ahead of KZN in their alternate energy projects which are also feeding into the grid.   Yet there does not seem to be any budget provision for this in KZN.

Sadly, when no money is earmarked for a project, it is simply a pipe dream.  EDTEA should be championing such projects in our province!

In the New Age paper last week I saw an article on how other countries are taking charge of climate change.  Japan, an industrial giant is now closing both nuclear and expensive oil/coal fired electricity generating plants and switching to 80% solar.   The improved technology and much improved price make photovoltaic panels a great job creation and carbon saving opportunity.  By the time Medupi and Kusile are commissioned, KZN may not need them we have sunshine in such abundance!

The DA has also made the point many times about the huge amount of paper this legislature generates.  Why do we not recycle?   Government should take charge in these initiatives and lead by example.

Summary

To summarise the DA’s input on the 2015/2016 Estimates for EDTEA. In difficult economic times, departments must look to best practice in business, as the Western Cape under a DA government has done. KZN’s EDTEA department must close the leaking taps and;

  • Fill Dube Agrizone’s empty glass tunnels for rental income
  • Get back the monies owed by unapproved increases paid to management at Ezemvelo, and more importantly the R25 million pre-paid for an event that did not happen
  • Watch Program 1 expenses like a hawk.   The migration of Environment and Conservation to Economic Development and Tourism is complete – there is no more need for expensive consultants.  The department’s largely competent and professional staff can do this
  • Scrap the expensive “Pie in the Sky” cable car project until the affordability and feasibility is known and accepted by all stakeholders, particularly the community
  • Implement the results of the treasury driven ‘value for money’ investigation without delay

In a DA-led province, we would know how many jobs had been facilitated for an investment of over R2billion for the entities we fund.

South Africans are tired of hearing “turn around strategies, back to basics, fiscal consolidation, doing things differently”.  These buzz words must translate into a lean mean business machine that will in turn translate into work opportunities.

Our unemployed youth needs hope and a future – the DA victory in the Fort Hare University elections is the beginning of the end for a bloated corrupt crony government.