DEBATE ON KZN 2019/20 MID-TERM BUDGET REVIEWS

 

Speech by Hon L. De Klerk MPL
IFP Spokesperson for Finance, KZN Legislature

 

Honourable Speaker,

Milton Friedman, the well-known Nobel laureate economist said the following;

“Most of the energy of Political work is devoted to correcting the effects of mismanagement of Government”.

Underspending Issue

It is not the first time that I have to ask the governing party to “wake up”, I have been doing so for the last two years during mid-term budget performance review debates. Again, in this financial year, it is apparent that most of the provincial departments and state-owned entities are still battling to balance their budgets meaning spending the straight-line benchmark of 50 percent after 6 months.

This year the Office of the Premier, Transport, Agriculture and Rural Development, EDTEA, Human Settlement, Community Safety and Liaison, Health, Sports and Recreation, Public Works and Arts and Culture have all underspent their mid-term budgets. The Department of Agriculture has consistently recorded underspending for the last four financial years and it does not indicate signs of doing better in the near future. This is once again a clear indication of poor planning and implementation as some budgets are likely to go unspent by the time this financial year ends.

This is also proof that the National Development Plan which refers to a capable state has clearly not been realized and it means that the governing party has failed in their desire to have a true developmental state.

Low rates of spending seem to be a norm with conditional grants. EDTEA is the leading culprit in failing to spend on its conditional grants such as the EPWP grant and Operation Vula budgets. It claims that lengthy administrative processes have caused the delays in the expenditure against these grants. We demand explanation on what lengthy processes that prevent a department to spent a conditional grant. This is totally unacceptable given that these are types of programmes that have direct impact on eradicating the high unemployment and poverty levels.

Hon Premier promised our people before and after elections about funding under the so called ‘Operation Vula’ where he said co-operatives and SMMEs would be funded to become leading suppliers in their respective local markets in this Province. Local markets such as clothing and textile, bakeries, tourism related projects, revitalisation of townships and rural businesses, agri-business/agro-processing, ICT sector as well as medical cannabis and hemp projects. Our people are still holding onto his words but it seems like it was all just a mere rhetoric to gain more votes.

The department of Agriculture is another culprit that continues to fail our people especially those who rely heavily on farming as it is still struggling to spend funds from the CASP grant rollover of R68.304 million from 2018/19 financial year. It has not yet started spending its 2019/20 allocation of the CASP grant. We urge the MEC of Agriculture to ensure that this grant is fully utilised by year end.

Underspending Infrastructural Projects

One of great concern to us in the Official Opposition, are instances of underspending against infrastructure projects. There is a serious decline in the expenditure against infrastructure budgets by most departments.

It seems as though the Leadership of government departments did not receive the key mandate to prioritise expenditure on infrastructure development which is one of the means to reignite the economy of the province and create much needed job opportunities.

Many departments pointed out that the slow expenditure against their infrastructure development budgets is related to the lack of capacity by the Department of Public Works to implement infrastructure projects conveniently and much sooner. We therefore urge the Premier of the province to urgently address the capacity issues in the Department of Public Works.

As the IFP we are against the growing norm by the departments who use delaying tactics against finalising SLAs and MOAs which then results in underspending against transfers and subsidies to municipalities. What are the causes of the delay in finalising the MOAs? Why is it hard for departments to ensure that MOAs and SLAs are finalised timeously?

This government must explain to the people of this province as to why money that is specifically allocated to take care of their valued services is not being spent. It is deeply worrying that spending patterns in almost all departments are not in line with their Annual Performance Plans and Strategic planning guidelines.

It goes beyond comprehension, how the governing party can continue to mislead the public of KwaZulu-Natal by claiming funds shortages and budget pressures as reasons for non-delivery and development, when millions in grants have been underspent and will probably be returned to the Provincial Treasury.

Hon Speaker, this is a clear indication that officials put into these departments have no knowledge of their Annual Performance Plans in relation to their spending, they do whatever they please and the citizens of our province suffer because funds are not spent to deliver much needed services. But these officials get paid monthly to do their allocated duties and responsibilities and they are about to receive annual bonuses; God knows for what!

Delay in Filling Vacant Posts

The post of Chief Financial Officer in the department of Health has been vacant for more than five years. Why?

In Sport and Recreation, Transport and Public Works there are many critical vacant posts contributing to the slow spending. We want to know what challenges are the departments experiencing concerning filling vacant critical posts? Why is it taking so long to fill these posts?

Natural Disasters

With regards to natural disasters, it is clear that our province has been repeatedly short-changed in compensation for managing the effects of natural disasters. From our discussions it seems that the bottleneck is at national level. While our provincial authorities generally respond to disasters promptly, their national counterparts take too long with their verification procedures. Moreover, we applaud the R20 million allocated to farmers affected by droughts and urge the forensic investigations against the missing R220 million to be expedited.

Medico-Legal Claims

Another area of concern to the IFP is an apparent lack of controls to prevent medico-legal claims that seem to eating a huge chunk of state funds. A lot needs to be done to reduce these claims.

Another concern is that fraud detection is done on the assumption that it is unknown to the officials in charge. However, some recent examples of unethical behaviour such as the appointment of a person facing serious criminal charges to head ADA shows that we need greater political will to uproot corruption if we are to succeed in these endeavours.

I thank you