KZN Budget Debate - Provincial Treasury (Vote 6)
By Dr LPHM Mtshali MPL
Shadow KZN MEC for Economic Development and Tourism

KwaZulu-Natal Legislature Pietermaritzburg: Thursday, 24 March 2011  

Madam Speaker 

The prerequisite for government-enabled economic growth and job creation is clean and efficient government. While every department is responsible for safeguarding these principles, Provincial Treasury, along with the Office of the Premier, takes the lead by ensuring that the public money is spent effectively and managed with integrity.  

While Treasury has made significant progress in this area – as has been pointed out by previous speakers during this debate - the organisational structures in the fight against corruption within government as a whole remain largely procedural. The institutions within and outside the provincial government whose job is to fight corruption are too many in number and too disjointed in purpose.  

Their work remains constrained not only by a lack of capacity but, even more seriously, by a breakdown in communication and a lack of cooperation with individual departments. While the government and the law enforcement agencies accuse each other of inordinate delays in taking action, hundreds of disgraced civil servants continue to benefit from the stalemate.  

Treasury’s role lies in coordinating these efforts and for this purpose we have proposed a live access database for all ongoing disciplinary cases. This project would mark a significant step towards expediting disciplinary proceedings in government departments. It would also help open these procedures to regular public scrutiny through this Legislature’s finance and SCOPA portfolio committees.    

Similarly, Treasury plays an important role in helping to rationalise the public sector and reprioritise spending to ensure that the bulk of the provincial budget supports service delivery and job creation. We acknowledge that a significant portion of the provincial budget is earmarked for the social sector and that social sectors are labour-intensive and therefore tend to have sizeable staff components. 

However, the cost of administration in the social sector remains disproportionately high. This is obvious when one compares the proportion of the budget for corporate services and for service delivery in the Department of Community Safety and Liaison. Another department where administration has been growing at the expense of service delivery is Social Development. Treasury needs to devise more effective formulas to redistribute funds from administration towards service delivery. 

The current budget structure does not reflect the top priorities of the provincial government as a whole, with the more marginal departments continuing to pursue overambitious agendas, often without cooperation with key service delivery departments. The choice of an across the board cut of 7.5 percent rather than redistribution of funds in the wake of the deficit crisis in the 2009/2010 financial year confirmed this trend.  

In dual recognition of the need to maintain fiscal balance and the magnitude of challenges in key service delivery departments, a greater effort could have been made to redistribute the excess funding from the Department of Economic Development to key service delivery departments, including Education; Health; Agriculture, Environmental Affairs and Rural Development; and Transport while freezing the 2011/2012 budget allocations for all other departments at their 2010/2011 levels.  

We believe that such measures could have gone some way towards averting the public service wage crisis in the Department of Education as well as the ongoing spending pressures in the Department of Health. We believe that the recent fiscal crisis brought about by the multi-billion rand overdraft had created a favourable opportunity for a shift of emphasis the province’s fiscus towards service delivery departments. The current budget demonstrates that this opportunity has now been wasted. 

Parallel to our proposed shift in emphasis is our propos.....ce key service delivery programmes in all departments and, in order to pre-empt over-expenditure, to fund unfunded mandates, such as OSDs and higher than budgeted for wage agreements, from efficiency gains and savings from the elimination of unnecessary bureaucracy and government intervention. This would no doubt reverse the trend in the Department of Social Development and elsewhere of expanding the cost of administration at the expense of service delivery. 

On the whole, it is refreshing to see most government departments turning their attention to their core functions rather than peripheral projects, which became a worrying trend in this province during the previous term of this Legislature. Upon her appointment two years ago, the MEC for Finance placed an overdue emphasis on essential services and she has not lost her focus ever since. As long as she and her team at Treasury continue to pursue the path of fiscal prudence, they will have our support.     

I thank you. 

Contact:
Dr Lionel Mtshali
082 556 0224