KwaZulu-Natal Legislature  

PIETERMARITZBURG: 4 August 2009

Chairperson

I would like to reiterate our congratulations to the Hon. MEC for Finance on taking this important office. The beginning of her tenure coincides with a grave recession coupled with the challenge of an unprecedented fiscal overdraft.

While we are budgeting to meet our service delivery targets as well as commitments to creditors, we are confronted by a sharply deteriorating economic environment with its knock-on effect on tax revenues.

As a province, KwaZulu Natal is highly dependent on national income flows. In fact, well over 90 percent of our revenue is supplied by the national Treasury. And national Minister of Finance Hon. Pravin Gordhan has repeatedly warned that we are to expect some serious shortfalls, with government tax revenues already running R10-billion below what was estimated. If one looks at current domestic and international economic forecasts, although this is currently no more than a guessing game, the future over the medium-term does not look very encouraging.

Provinces generally have to run a tight ship due to the significant portion of their budgets going into the social sector. In addition, social sectors have sizeable staff components. Our province is no exception. Not only do we not enjoy the comfort of major own revenue streams, but our options when it comes to borrowing are strictly limited.

The recession may yet translate into a drop in our own revenue. Our gambling revenues together with hospital fees and motor license fees may contribute less over the course of this financial year than anticipated.

I am pleased to say that our priorities in this Vote coincide entirely with those pursued by the Provincial Treasury. With regards to departments, we will lend this provincial government our full support as it strives to:

* tighten expenditure and cash management,

* tighten supply chain and asset management,

* improve accounting standards and transparency,

* sharpen control over our financial systems and associated data integrity,

* improve infrastructure spending, and

* assist accounting officers and departmental CFOs to improve systems and process management within their departments.

With regard to municipalities, we will likewise support the Provincial Treasury's steps that will lead to:

* improvements in the compliance and inclusivity of the budget processes,

* improvements in the capacity to deliver on a range of financial management requirements, including accounting, cash management, investments and borrowing, and

* improvements in supply chain management, disposal of fixed assets, infrastructure spending and revenue management.

We agree with the government's analysis that in almost all cases of malpractice and meltdown in local municipalities, the lack of political accountability and responsibility is the primary cause.

As the Official Opposition, we extend this analysis to this provincial government where in the past the lack of political responsibility caused similar problems, which this administration has duly inherited.

The extravagance with regard to advertising, venues and facilities, the non-judicious use of consultants and a range of supply chain dilemmas are among the well-known symptoms of this malaise. Excessive bureaucracy coupled with political appointments to management positions is another.

As far as the existing civil service is concerned, the problems of financial mismanagement in various departments, highlighted year after year by the Auditor-General, often result from the failure on the part of these departments to sign performance contracts with senior management staff.

A public service that cannot measure the performance of its own officials, cannot hold them accountable for failures. At the same time, such a public service cannot acknowledge the hard work done by the many dedicated public servants. This has to change.

On the whole, we in the Official Opposition applaud the Hon. MEC's call for spending wisely but, at the same time, we continue to warn that the record of the ANC government points to the contrary.

What we saw in KwaZulu Natal between 2004 and 2009 could hardly be termed as fiscal prudence as many government departments had abandoned their core functions and spent wildly on peripheral projects. The Hon. MEC is now placing an overdue emphasis on essential services as opposed to nice-to-haves and in doing so she has our full support.

In order to address the complex challenges KwaZulu Natal is facing today, the Hon. MEC for Finance will have to tackle them holistically. 

On the one hand, she will have to ensure that greater attention is paid to budget implementation, there is better transparency in budget planning and execution, that compliance with the relevant legislation is a must and that timely interventions are made where necessary.

On the other hand, the Hon. MEC will have to argue that deployment of political cadres to management positions within government, as expedient as it is, runs against all these other objectives.

The achievement of these goals in their entirety will require total complicity of the Premier and all the other MECs as well as greater discipline by the members of this House, and even the mayors and councillors of local and district municipalities.

Chairperson, improving the state of financial governance and service delivery in the province across both spheres - provincial and local - is a joint responsibility of the Premier, of each and every MEC, every member of this House and indeed every municipal councillor.

Improved financial governance and service delivery begins with good planning and puts hard milestones in place for each of us to be measured on. This budget is a step toward this, but more has to follow in monitoring, so that we can ensure that we deliver on our undertakings. As far as the Official Opposition is concerned, I can pledge our support.

I thank you.