Debate On The Second Adjustments Appropriation Bill 2010
By Roman Liptak MPL
Shadow KZN MEC for Finance


KZN Legislature Pietermaritzburg: Thursday, 31 March 2011



Madam Speaker


The Official Opposition has long called for improved capacity in the spending of conditional grants across the provincial government. Slow rate of spending in the Human Settlements Development grant has led to the re-allocation of R80-million from this grant to other provinces by National Treasury which monitors this grant.


Although this amount is less than the R200-million National Treasury originally intended to re-allocate, the fact that KwaZulu-Natal, along with the Free State, is having to surrender funds to other provinces is an indictment on this government’s capacity to spend money on national priorities. The withdrawal of these funds must be seen in the context of a provincial government that faces numerous spending pressures in key departments and that, at the same time, claims to be underfunded.


The reallocation of the R80-million from the Human Settlements Development grant has a direct impact on service delivery in our province. It means that we will be able to built fewer houses and that our housing backlog will increase. It also means that other provinces, including the Northern Cape, Limpopo and the Eastern Cape, whose capacity to spend this grant is more credible, will benefit from the funds that were originally allocated to us. 


We hope that this extraordinary measure will be a lesson not only to Human Settlements, but to all departments which receive conditional grants from National Treasury and whose capacity to spend them in their entirety is insufficient. Roll-overs of unspent grants have long been taken for granted and this often happened in the case of conditional grants that were unspent repeatedly and periodically, such as Comprehensive HIV and Aids grant and Hospital Revitalisation grant in the Department of Health or Comprehensive Agricultural Support Programme grant in the Department of Agriculture. 


The re-allocation of funds by the National Treasury, although unfavourable to KwaZulu-Natal today, must be welcomed because at last it introduces an element of competition between provinces. If we improve our spending capacity, we may well benefit from future re-allocations of conditional grants. The IFP supports this Bill in the hope that it will lead to improvements in the capacity of our government departments to spend conditional grants in the 2011/2012 financial year.


I thank you.


Contact: Roman Liptak, 078 302 0929