By Francois Rodgers, MPL, DA KZN Spokesperson on Finance:
TODAY the DA opposes the Division of Revenue Act (DoRA) bill on the grounds that the ANC’s handling of the bill is flawed in terms of constitutional procedure and has failed to follow proper procedure thereby compromising the consultative process.
As a result, the people of KZN have been excluded from having a say on a matter that has a direct influence on the province and their lives.
Nationally the DA has called upon the Speakers of both Houses to halt this Bill for the same reasons.
Here in KZN, the acronym ‘DORA’ should be altered to ‘RDCT’ – Rearranging the Deck Chairs on the Titanic. No matter how it is allocated, the division of revenue in our province is not going to delay a collision with a looming ice berg. The warning signs are clear and concise.
That ice berg has been created by the public sector wage agreement. This year government agreed to a three year wage deal which will see civil servants receive a 7% increase this year and 2% above inflation for the next two years. This deal has increased the national wage bill by 10.1%.
In simple and in real monetary terms we are facing a national budget shortfall of R12.2 billion this year, R20.6 billion in 2016/17 and R31.1billion in 2017/18.
Bringing the iceberg closer to home – the DA in KZN regards the current public sector wage bill agreement as unsustainable and something that will ultimately negatively impact on the lives of the citizens of our province.
KZN is facing a budgeted shortfall of R1.749 billion on its provincial public sector wage agreement. While the adjustment to the Division of Revenue Bill sees a welcome additional R877million toward employee compensation, it still leaves the province with a shortfall of R871million. Most alarming is that this never received a mandate from provincial government.
KZN must now fund this shortfall from within the provincial fiscus. This means one thing only – service delivery suffers and the people of KZN suffer in order to fund a bloated bureaucracy created by the ANC government.
For many years now the DA has warned the ANC that the unholy alliance with its partners will come back to haunt it, and this is exactly what is happening. Above inflation and unaffordable wage agreements to appease labour partners for votes is the ice berg.
The future for the citizens of this province looks extremely dark and gloomy.
In the outer years National Treasury will have to draw down on its contingency reserves by almost R40 billion rand to assist provinces with the negotiated shortfall.
This will still leave KZN with a massive shortfall that it will have to fund from it operational costs. The immediate problem will compound itself next year as the current KZN midterm review reveals massive over expenditure of almost R900 million rand, with a contingency reserve of R750million set to be depleted.
The provinces wage bill will in all likelihood escalate next year to around the R2.8 billion mark and then R4.3 billion in the final year. Our current budget and cash flow will never sustain this pressure.
KZN’s precarious situation demands exceptional leadership. Certainly it does not need an ‘alliance mentality’ at the expense of the people.
Government should never become an employment agency at the expense of the people.
It should instead ensure that it creates an effective and competent civil service. One based on good governance with the main focus on service delivery; with its people the main focus.
Clearly this is a foreign concept to the ANC who believe that party comes before state