KZN Budget Debate - Provincial Treasury (Vote 6)
By Roman Liptak MPL
Shadow KZN MEC for Finance

KwaZulu-Natal Legislature Pietermaritzburg: Thursday, 24 March 2011  

Madam Speaker 

The elimination of the fiscal deficit towards the end of the 2010/2011 financial year is a significant achievement and we have expressed our appreciation to the MEC of Finance for her part in this in the finance committee. I am more than happy to reiterate our congratulations to the MEC and her team at Treasury here today. Well done! 

The province’s books could not have been balanced without a strict adherence to the cabinet-approved cost-cutting measures. Provincial Treasury has largely ensured that the implementation of cost-cutting measures is consistent across the provincial government and that the outcomes are monitored. The use of rental venues and facilities for functions, travel and subsistence and the non-judicious use of consultants have all been addressed adequately. A solution for the supply chain challenges are in the pipeline with the gradual implementation of the new supplier database.   

Other items of expenditure, such as advertising, could and should be restricted further. Treasury must also expedite an audit of all immovable assets across the provincial government to determine which properties could be sold on the steadily improving property market or utilised to meet departmental needs in place of costly commercial rentals, which account for a large and ever increasing portion of the budget. 

The lessons learned in the implementation of these cost-cutting measures need to be extended to areas and programmes most prone to unnecessary bureaucracy, excessive government intervention and duplication of government functions. The cost-cutting measures must now lead to streamlining of the public service, a clearer delegation of responsibility and cheaper and more cost-effective ways of communicating with the public. 

To its credit, Treasury has been continually improving its capacity in the provision of IT infrastructure. It has strengthened its forensic investigation unit, legal services, internal audit services and risk management. Treasury has also made significant progress in investigating fraud and corruption in the provincial government. Now it needs to make the outcomes of these investigations available for public scrutiny.  

I have outlined our proposal for a live access database for Treasury to keep track of all ongoing cases of misconduct in the general budget debate. Such a database would help discharge disciplinary, civil and criminal action against offenders simultaneously and, in doing so, departments would be able to discipline errant officials more expeditiously than is the case now. I believe our proposed database would render Treasury’s task in fighting corruption easier and it would also serve as a useful oversight tool for this Legislature.  

Madam Speaker, we appreciate that the freeze on the filling of non-critical posts remains in place, but we are concerned about the fiscal implications of the MEC’s explanation that not all posts funded in this budget are critical. There is inconclusive evidence to support the notion that indiscriminate increases in the numbers of public service posts lead to improved service delivery.

The distinction between critical and non-critical vacant posts was first made in August 2008 when the filling of non-critical posts was frozen in the Department of Health in order to contain runaway over-expenditure. This distinction should remain a guiding principle when filling further public service vacancies.  

We are also concerned that internally conducted Job Evaluation processes have generally led to pre-determined conclusions and have therefore lacked credibility. With performance assessment now being a requirement for audit purposes, performance assessment needs to be capacitated in all government departments and its findings need to be used in parallel within and between departments when considering the filling of vacant posts with identical or similar job that Treasury should drive this process. 

Treasury also needs to scrutinise additional allocations requested by departments which have previously under-spent their budgets. Roll-overs are frequently requested for programmes that have a history of under-spending. 

In conclusion, I wish to mention two issues that featured prominently in last year’s budget statements but have been left out this year. The first one relates to so-called "target lifestyle audits" designed to root out corrupt relationships within government and between business and government. The second issue has to do with performance contracts between departments and their senior management, the lack of which had repeatedly been highlighted by the Auditor-General. We would appreciate an update on both issues.  

I thank you.

Roman Liptak
078 302 0929