KwaZulu-Natal Provincial Legislature 2020/21 Special adjustments estimates Budget sitting: General Budget Debate Wednesday 16 September 2020 (virtual)

Hon. VF Hlabisa – President of the IFP and Leader of the Official Opposition in KZN
Hon. Speaker
Hon. MEC
Hon. Members

These special budget adjustments take place at a crucial time in the history of our province. The Statistician-General has recently announced that our economy contracted by 51% in the first quarter of 2020. This contraction was no surprise due to the effects of Covid-19 on our economy. Our country is suffering from the socio-economic repercussions of Covid-19. Hence, these special budget adjustments could not have been avoided in our provincial budget.

Provincial Treasury has informed us of the budget reprioritisation to the tune of R30 billion in respect of the nine provinces. Our share of this as KwaZulu-Natal is R6.2 billion. Due to the effects of the lockdown regulations, the provincial estimates into collections will no longer yield the projected funds. Under these circumstances, the IFP agrees with our Provincial Treasury in the areas of focus that they turned to for these cuts, although in some instances, there will be areas of concern in the priorities. Be that as it may, we will be having more areas of convergence than disagreement in our views. The IFP believes that in times like these, for all of us it has to be the country first, despite our political differences.

Public entities in the province all reflected a huge under-spending for the financial year 2018/19. While this has always remained of concern to the IFP, we fully support their budget cuts as a contribution to this R6.2 billion collection. We agree with Treasury that areas such as S&T, expenditure relating to hosting of events, and usage of consultants by Departments and entities, all had to be looked into for savings, due to level 4 and 5 of the lockdown. The Department further looked into projects that were still at feasibility and pre-feasibility stages for such to be delayed to the next financial year. Funds previously recalled from Departments due to slow or non-spending were also assessed for contribution. Departments were also asked to look into compensation of employees for positions that had not yet kick-started the process of filling these posts.

All these should serve as a lesson to Departments to always ensure spending according to the planned time frames and planned targets. We do note that our provincial reserves had to be cut from R390 million, to R200 million, to mitigate the prevailing circumstances. In respect of these budget cuts, we have to support the efforts of Treasury in ensuring that we arrive at meeting the required target. Some of the positions that had to be put on hold do raise concerns across all Departments. We hope that at the right time, these will be re-prioritised accordingly for filling once more. Provincial Treasury, working with all Departments, has estimated that the province is going to require R11.5 billion as a response to fighting Covid-19, especially the following breakdown:

Health – to be allocated R8.2 billion

Education – to be allocated R2.8 billion

Social Development – to be allocated R300.1 million

Transport – to be allocated R414 million

Provincial economic recovery response – R300 million

Hon. Speaker, whilst agreeing that the Health, Education, Transport and Social Development Departments are indeed at the coalface of the fight against Covid-19, some concerns have to be raised about how some of them have reflected reckless spending in the past few weeks.

Treasury has a duty to transversally provide oversight of the financial performance of all government Departments and entities. In purchasing the PPEs and other Covid-19 materials, most provincial Departments in KwaZulu-Natal, especially the Education, Health, Social Development and Transport Departments, all failed to comply with Instruction Note 5 issued by National Treasury, as guidelines to the disaster period procurement. Failure by these Departments to ensure value for money, resulted in huge expenditure in areas where amounts spent could have been very minimal. Thus, the IFP feels that the estimates of their priorities will have to be seriously looked at during the revised budget process in November. Right now, what is being allocated to them is much more and must not lead them into the temptation to misuse the funds meant to improve the lives of our people.

The IFP feels that more resources must be allocated to Treasury to strengthen our resolve to fight corruption. Critical positions at Provincial Treasury must be quickly filled so that the watch-dog responsibility of this Department can effectively assist us in dealing with the culprits. Weakening Provincial Treasury will be a huge mistake.

The projections of the impact and intensity of Covid-19 by health experts that forecast what could be expected by this time in the country have not been concise. As a result, there might have been over-budgeting on our side because of those non-concise projections. For example, Health, Education, and Social Development provided Treasury with huge projection figures but when reports are presented to Portfolio Committees, they end up having reduced figures, whereas amounts requested by these Departments from Treasury remained the same. These inconsistencies must definitely be corrected during the budget review process in November.

Money budgeted as a response towards economic recovery is really fit for purpose and should have been much more than R300 million. Going forward, economic recovery is what this province will strongly require in order to mitigate against social degradation and social ills. Our economy has suffered a great deal. Industries and companies have shut down. Jobs have been lost. Economic, agricultural and food baskets have declined. More and more people have become socially reliant upon the state for their livelihood. More focus upon economic recovery will assist the province to rise up from the ashes of Covid-19, and have people getting on their feet once more to be self-reliant. But this will have to be coupled with efforts to ensure that companies in the province adhere to the labour laws of the country, that immigration laws are complied with, and that the non-critical skills and job opportunities thereto are really allocated to South Africans. Government must ensure that the citizens of our province and all those who live in it do respect and abide by the laws of our country.

This is our contribution as the IFP to today’s proceedings in support of special adjustments estimates, Hon. Members.

I thank you.