Madam speaker and Honourable members.
I would like to start with a quote from Milton Friedman: ‘If I spend somebody else’s money on somebody else, I am not concerned with what I get. And that is government.’
In main, the purpose of the Municipal Finance 3rd Quarter Review 2016/17 is to review the budget performance of the 3rd Quarter for the respective Municipalities. All Municipalities should have generated and spent 75% of their adjusted budgets. Municipalities are at the coalface of service delivery and if they fail to deliver proper services through effective spending of their capital expenditure and other grants the result will be the people of our country will not receive what government intended them to receive and what is rightfully theirs with the inevitable result the people and especially the poor will suffer.
Most of KZN Municipalities is heavily dependent on grants.
It is clear municipalities are unable to spend their budgets effectively and fall far short of the 75% baseline and to make matters worse municipal debt is still allowed to pile up and municipalities are becoming slower at paying their own creditors. This is a contravention of the PMFA!
National conditional grants like the MIC grant is crucial to effective delivery but only 67.4% was spent and expenditure on other grants is generally poor with the result of infrastructure lagging behind and stifling economic growth and the direct loss of new job opportunities.
We are concerned about the lack of proper planning, monitoring and evaluation of municipal finances.
Underspending on the capital budget is simply unacceptable and should be condemned by all political parties. This needs decisive action both on the part of Cogta and the department of finance.
What makes this underspending even worse is that we as a country are in a recession. Money is scarce, several cost cutting measures have been put in place and thus money is in high demand but notwithstanding this the municipalities still underspend.
The sad part of the situation is that this under expenditure at the 3rd quarter is not new. For years municipalities have underspent in the first three quarters and then race to spend their budgets by year end, with some municipalities spending as much as 60% of their budgets in the final quarter. We all know what it means namely over/under expenditure; virements; accruals and fiscal dumping.
For years municipalities and the department of Cogta and Finance have promised us that they will work harder “at managing their budgets” but to no avail. There is just not much evidence to show their commitment to improve their effectiveness. We are talking about tax payer’s money that is meant to benefit people but it remains unspent due to incompetence.
Further the governance shortcomings are demonstrated in what is a priority at many ANC run municipalities, namely, an expensive mayoral car, overseas trips, large advertisements, excessive spending on community projects which only benefits a few.
But apart from these problems it is clear that all municipalities need skilled and dedicated officials to deliver services and not inefficient cadre deployed officials.
Sadly, even the assistance given by treasury in trying to assist and support struggling municipalities doesn’t bear fruit . It is clear from the audit outcomes for supported municipalities, out of 10 supported municipalities only 3 municipalities improved their audit outcome and the rest either stayed the same or regressed. Unfortunately this is nothing else than fruitless and wasteful expenditure.
Quo vadis? Is the question ! Where are we going if officials and political heads are not held responsible and punished!!! The answer is we are going NOWHERE!
WAKE UP! It is simple! If you are not effective as an official you must be fired.
Lourens De Klerk