Image Credit: Business Insider

Debate on Unaudited Close Out Report

BY HON MR LOURENS DE KLERK

Madam speaker and Honourable members.

Quote by Thomas Sowell: “The first lesson of economics is scarcity: There is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”

And

“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.
We are debating the 2016/2017 unaudited close out budget report in a really dark and sombre reality. Economic growth has stagnated. The Republic of South Africa is on the threshold of being downgraded again. On a daily basis the public is confronted with evidence that the governing party is involved in state capture and the looting of state fiscus of billions of rands. Unemployment is rising relentlessly. Notwithstanding these issues we are supposed to be positive we are told by the president that there is no such thing as state capture.

At the same time, it is clear from the 2016/17 unaudited close out budget performance report that the department is struggling to control virements and in some instances departments effected preliminary virements which were not permissible in terms of Section 43 of the PFMA.

All fifteen votes under-spent against the final appropriation with the largest under-expenditure being portrayed by the Provincial legislature, Education, Provincial public works office of the Premier, Sport and Recreation, Community Safety and Liaison Human settlements and agriculture and rural developments respectively.

The following grants showed underspending against allocation
– NSNP grant
– Community library services Grant
– Social Sector EPWP grant for provinces
– HSPG
– EPWD integrated grant for provinces
– National Health Insurance Grant

And an over spending on the following grants:
– Health facility revisitation grant
– Comprehensive, HIV, AIDS and TB grant
– HIV and Aids grant
– Maths, Science and Technology grant

Several departments are still struggling – notably the issue of a pre-payment of R15million to the POPW in 2015/16 relating to the training academy is still unclear.

The agriculture development agency has underspent in a terrible way with one of its project only spending 7.5% at midyear.

Education departments training and development budget has been underspent for the past three years. Slow SCM processes in respect of the MST remains a concern.
The department carried forward accruals to R651,990 million which increased to R1.046 billion in 2016/17

Health seems to be unable reducing the level of carry over costs at the end of each financial year these levels have peaked at around R1.306 billion up from R1.207 billion in 2015/16. Medico legal claims remains a major area of pressure for the department.

The performance of the public entities remains a concern and many of these entities are not effective.

Quote by Thomas Sowell:
“Weighing benefits against costs is the way most people make decisions, and the way most businesses make decisions if they want to stay in business. Only in government is any benefit however small considered to be worth at any cost however large.”

These challenges are exasperated by slow economic growth, corruption, state capture and the serious burden the compensation of civil servants has on the fiscus.
It is projected that the year-end over expenditure on compensation of government employees will be R900 million, which will in effect will wipe out the provinces provincial contingency reserve.

The result of the challenges is that service delivery is affected. The poorest of the poor are not receiving their fair share. The 2019 election is swiftly coming closer and the electorate is swiftly recognising that they do not receive the services they are supposed to receive. The election results will reflect this reality. The IFP is preparing itself to do what is right and stand for the poor.

I thank you