General 2010/2011 KZN Budget Debate


By Dr BT Buthelezi MPL
Leader of the Official Opposition

KwaZulu-Natal Legislature
Pietermaritzburg : 8 April 2010


Honourable Speaker


While the IFP appreciates the ANC's continued commitment to solving KwaZulu-Natal's socio-economic challenges - many of them historical, deep-seated and structural, the Official Opposition does not believe poverty and unemployment can be eliminated fast enough by excessive regulation and patronage through government control of public resources.


In this year's budget debate, the Hon. MEC for Finance has gone out of her way to put a new spin on the ANC's traditional approach of government through the total control of state institutions and the dispensing of patronage. Public employment schemes are still given more encouragement by this provincial government than the job-creating private sector despite lip service being paid to the contrary.


The ANC seems oblivious to the fact that the recession, which continues to be felt by all sectors of the economy, has decimated KwaZulu-Natal's private sector employment while the province's public sector continued to grow.

While the private sector shed 220 000 jobs during the previous budget cycle, public service jobs have continued to add onerous expenditure to the overspent fiscus despite the moratorium on the filling of non-critical posts.


We are all aware of the pressure that wage agreements in 2009 have placed on provincial spending over the MTEF. Of the R33.9 billion added to the provincial equitable share, R30.9 billion is to cover the cost of general wage agreements and occupation specific dispensation agreements in health and education.


While these additions should attract and retain experience and skill in the public sector, it is a substantial sum of money that does not necessarily translate into additional service delivery outputs. We simply cannot afford to continue expanding personnel expenditure, especially if we do not see substantially improved quality of services from the public sector.


The IFP was hoping for a radical review of funding for the money-gobbling public entities such as the KwaZulu-Natal Growth Fund, which have little or nothing to show for the millions of rands poured into them. The Hon. MEC for Finance would have given real substance to job creation by redirecting public funds to small businesses as incentives for every new worker hired.


This, of course, would have meant less government control over the economy and less patronage available to the ruling party to dispense to the loyal cadres. Instead, the public entities such as the controversial KwaZulu-Natal Growth Fund are set to receive flat budget allocations that appear totally disconnected from any veritable performance targets.


The IFP remains supportive of the provincial government's efforts to stabilise KwaZulu-Natal's wobbly public finances. It is encouraging that the province is now budgeting for a surplus, but we are sceptical about the possibility of achieving it given anticipated unfunded mandates, runaway wage agreements and inherent inefficiencies within the provincial government. This government needs to be clearer about how it intends to address these issues.


The IFP is increasingly sceptical about the value-for-money generated out of the provincial government's public participation programmes. In addition to more money allocated to Taking Parliament to the People and the expanded Sectoral Parliaments, which are blatantly failing to yield meaningful results, the planned pre-budget road shows are another old hat rehashed for the 2010/2011 budget.


The public have previously been encouraged to give input on the province's challenges, which are well-documented, and government priorities that have been cynically formulated beforehand.


If we are serious about public participation in the democratic institutions in this province, rather than promotion of individual political parties at the taxpayers' expense, we in this House have an obligation to see to it that the public funds allocated to the Legislature for such a purpose are spent in accordance with its legislative mandate.


We must resolutely pull the plug on activities that unashamedly promote the executive arm of government with money earmarked for parliament.


Honourable Speaker, the IFP singularly applauds the planned extension of HIV/Aids programmes as well as the renewed commitment to improving basic education and skills development, with a firm focus on the youth. But along with the increased budget allocations, we at last hope to see some improvement in the performance of the Departments of Education and Health that have been steadily receiving growing budget injections but continued to produce substandard results.


This cannot be achieved without stringent performance criteria attached to the respective budgets. We are pleased to note that the calls for such measures today do not originate only from the political opposition but are a clearly spelled out requirement by the Auditor-General for future performance audits in government departments.


The KwaZulu-Natal Department of Health has been of particular concern to us in this regard. By 31 December last year, provincial health departments across the country were facing a combined R5.7-billion deficit on their budgets for health care, as a result of over-expenditure in the course of the 2009/2010 financial year. KwaZulu-Natal's share of the expenditure was by far the largest - standing at R2.3-billion.


Although this government has gone some way towards reducing the glaring budget deficit through its Provincial Recovery Plan, the IFP believes that the Hon. MEC for Finance still needs to press the national Treasury to explain how it is going to intervene to relieve this cash crunch now - and in the future, without penalising fiscally responsible provinces.


Unless the complex issues that have contributed to our past over-expenditure are addressed to KwaZulu-Natal's satisfaction, the result will likely be re-runs in many provinces of the recent Free State crisis, where operations were halted and the supply of ARVs dried up in a desperate attempt by the provincial authorities to rein in runaway spending.


The financial shortfalls in some provinces - and certainly in KwaZulu-Natal - appear to be, to a large extent, the result of financial mismanagement.

Auditor-General's reports for most provincial health departments comprise long lists of wasteful expenditure, missing assets, unpaid debts, inadequate controls, missing staff members and unjustified performance payments.


There appears to be a necessity on the part of the national Treasury to provide some form of bail-out, to prevent compromised service delivery and more vacant critical posts than we already face. And if such a bail-out is to be handed out, it must be accompanied by measures to prod this provincial government towards greater financial discipline.


We ourselves in this province, both on the government and opposition benches, should be at the forefront of these efforts to avoid situations such as that in the Free State, where instead of resolving mismanagement and inefficiency problems within the Department of Health, the province simply slashed hospital budgets.


Honourable Speaker, on the whole, I wish to urge this government to run a frugal, service delivery-oriented administration not only on paper but on the ground where it matters most. The marginalised communities of KwaZulu-Natal have expressed their faith in this government to lift them out of circumstances created by history. This much was clear from the mandate this government received from the electorate last April.


While this government has made some progress, we are today nowhere near meeting the ambitious targets we set ourselves for poverty alleviation, job creation, public education, food security, community health and safety, many of which are hinged to individual rather than government-managed efforts.

Unless we acknowledge, both through rhetoric and policy, that individual advancement is fuelled by individual effort, these targets will continue to elude us.


I thank you.


Dr Bonginkosi Buthelezi
Leader of the Official Opposition
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