FRIDAY 10 DECEMBER 2021 – PIETERMARITZBURG
DEBATE ON KWAZULU-NATAL 2021/22 ADJUSTMENTS BUDGET
By – Hon. VF Hlabisa (MPL): Leader of the KZN Official Opposition and President of the IFP
The KwaZulu-Natal 2021/22 Budget Adjustments take place at a time when our province has just emerged from the country’s Local Government Elections, giving a fresh mandate to our local representatives for the next five years. On behalf of the IFP, I take this opportunity to congratulate all our local government representatives in the province and trust that they will execute their mandate with respect, honour, and integrity. I reiterate the IFP’s commitment made during this election, to serve all our people with ‘TRUST’ and to hold all offices where we serve in the spirit of Ubuntu, serving within the domains of servanthood leadership.
Indeed, Hon. Members, the economic and social challenges of the present times have put added burdens in the way governments conduct their business in serving their communities. As a country, we have continuously experienced an economic decline that has slid and hampered the employment and business fortunes of our citizens for years. The coronavirus pandemic, coupled with perpetual lockdowns of the country, has made the economic recovery a moving target. The July 2021, unrest in KwaZulu Natal and Gauteng became a blow that flattened all efforts, in a situation that was already devastating.
Hon. Speaker, the government cannot keep on losing funds to corruption and at the same time hope for recovery and survival. Officials cannot keep on spending recklessly, incur increased levels of irregular, fruitless and wasteful spending, with no punitive consequences, while we continue to pin our hopes on a better financial situation for tomorrow. Our situation as a province has extremes of positives and negatives. It is a good thing that our economy is forecast to grow at 4.6%, after contracting badly in the past. But for now, this remains an expectation that we must work hard to make a reality.
It is encouraging that KwaZulu-Natal has remained cash-positive in her financials since May 2020, even under these trying times. But that our irregular expenditure keeps on increasing, and is highest the country, remains a situation that needs to be worked on and ended once and for all. It is a good thing that the province has increased the number of clean audits to four provincial departments, and the Provincial Legislature. Under normal circumstances, we should not be isolating this shift as a remarkable move. But because our situations are abnormal, we have to rejoice in a performance that is supposed fall under the normal duties of our administration. The public service of our country still has a long way to go to get back to normality. The approach of our Provincial Treasury towards these anomalies is much appreciated. It gives hope that we have a Provincial Treasury that is prepared to stand its ground and not compromise the Rule of Law, the basics, and the principles of good governance.
Three Departments of our province have remained of concern with respect to their audit reports for the past financial year. Transport and Health have both remained unchanged in qualified audit reports. Arts and Culture has also regressed, to climb on the bandwagon of qualified audits. When looking at the spending patterns of the mid-year expenditure reports, it is mostly these three Departments that have raised eyebrows.
The Hon. Finance MEC reports that Transport is surrendering R300 million as the projected underspending for the year. This, despite dreadful condition of many of the roads in the province. Health has reflected underspending, despite the demanding health situations of our facilities and institutions, coupled with the Covid-19 health challenges. Arts and Culture has reflected drastic underspending but claims to be moving towards balanced spending at the end of the financial year. Obviously, there is a clear relationship between spending patens and audit outcomes by the AG.
Hon. MEC, the IFP welcomes the reported additions made to the province’s equitable share, to the tune of R4.465 billion and Conditional Grants additions amounting to R175.402 million. These much-needed funds in our province will go a long way in assisting to ease the pressures of financially stressed Departments. In the same vein, we also express our disquiet in respect of the unspent Conditional Grants amounting to R55.356 million, which the province had to return to National Treasury because of failure to spend by some Departments. Again, the biggest culprits here are Transport with R12.629 million, and Health with R22.556 million and R2.872 million respectively. Agriculture is also an issue here, with R7.039 million and R3.931 million respectively.
Also, of concern Hon. MEC, is our Provincial Contingency Reserve, which is gradually shrinking. Of course, when we appropriate funds, they are meant for use in specified areas. But our Provincial Contingency Fund, which used to be around R400 million, was set at R366.632 in the 2021/22 Budget. Because of certain pressures from some Departments, this Reserve is now sitting at R115.031 million. We are not in control of natural happenings imposed upon us by circumstances. We just have to remain with our fingers crossed that nothing naturally dramatic puts pressure on this Fund before the end of the financial year.
Most Departments have reported savings in their compensation of employees’ programmes. They will use these funds to ease the pressure on the wage increase agreement. The non-filling of budgeted posts continually remains another cause for concern in this province. This means that professionals and personnel who were supposed to be employed by province as additional human resources is not happening. This is happening at a time when the Social Development Department has displayed a worrying inability to employ the much-needed social workers, when Health is unable to employ and absorb the much-needed doctors and health professionals, when Education has voiced an inability to employ the +6000 educators who are needed by the Education System in the province. Therefore, the so-called savings in the compensation of employees in all Departments is not necessarily a saving, but a disservice to the service delivery initiatives of the province.
Our Provincial Treasury reports that when the 2021/22 MTEF Budget was prepared, funding relating to wage increments was deducted from the provincial equitable share by National Treasury. When the 2021 wage agreement concluded, non-pensionable cash allowance for levels 1-12 staff, and a 1.5% increase was agreed. National Treasury only committed to fund the cash allowance portion. This has put enormous pressure on the provincial fiscus administrations. When these negotiations are concluded, provinces are not part of them, and they get instructed what to do by National Treasury. It seems like it is very difficult for National Treasury to give, and very easy to take back.
We have seen this happen to Provincial Kitty’s during the outbreak of Covid-19 in the country. This boils back to the final Constitution-making process in 1995/96 in South Africa. The IFP strongly advocated for some provincial taxation powers to allow for some financial self sufficiency in the provinces and to cut the sole reliance on the National Fiscus. This was not agreed to by the other stakeholders in the process. Whilst painful, we have to remind colleagues that the chickens have now come home to roost. Our provincial governments in South Africa operate hand-to-mouth, cupping their hands to catch what National can give. Even municipalities are in a much better situation than provinces in respect of collection mandates.
There is an issue of the cross-border unfunded mandates that continue to put pressure on some provinces like KwaZulu-Natal, but which the National Equitable Share Allocation continues to ignore. For KwaZulu-Natal, this is a reality that cannot be avoided. Some political pressure needs to be exerted upon the national government to consider these facts when the equitable share allocation is determined.
Hon. Speaker, under the circumstances, the IFP accepts the 2021 Budget Adjustments.
I thank you.