KZN sitting on a financial time bomb with a predicted over-spend of almost R1billion

By Francois Rodgers, MPL, DA KZN Spokesperson on Finance:

FRIDAY’s Provincial Treasury 2015/16 mid-year budget performance revealed that KZN is facing a mammoth anticipated overspend of R883 million on its budget.  This in effect will wipe out the province’s R750million contingency fund.

During the meeting it was projected that the province could end up with a year-end over expenditure of R883 million.

The figure excludes the R871 million which had to be found in KZN’s coffers to fund a R1.74billion shortfall as a result of the province’s wage agreement, of which national Treasury funded a mere R877 million. Currently there is no indication that national treasury will fund salary shortfalls in the outer years.

This means that R1.75 billion could well be lost to service delivery in the province.

To put it bluntly, KZN is sitting on a financial time bomb.

This precarious situation could have dire consequences on essential service delivery in the province, as MEC’s scramble to cut costs to reduce this massive predicted over expenditure. Any cuts on departmental base line budgets will have a detrimental effect on service delivery.

The leading culprit behind this fiscal time-bomb is KZN’s Health Department which is predicted to over spend by R802million.

The department is followed by the province’s Social Development department with an anticipated R47billion overspend and KZN’s CoGTA and Public Works which show a likely overspend of R20 million each.

Despite the seriousness of the situation, the Department of Health arrived at Friday’s meeting unprepared, with no presentation on the departmental mid-year budget report.

Not only does this represent complete apathy and massive inefficiency, it also highlights the massive disparity that exists between Treasury and certain provincial departments.

KZN now stands on the edge of a fiscal cliff and it is going to demand exceptional and strong leadership to bring the province back from the brink of disaster.

The DA firmly believes that internal factions within the ANC in KZN have rendered the province leaderless.

As KZN’s official opposition, the DA will continue to keep a watchful eye on all aspects of provincial government.  The people of our province must come first through effective service delivery.