R48 Billion Budget Heralds Lean Years

Commenting on the R48,223 Billion Eastern Cape Budget for 2010/11
presented by Mncebi Jonas, DA MPL Bobby Stevenson had the following to
say; “The fat years are over and the lean years are upon us. The
Eastern Cape budget announced today, Wednesday 3 March, is not
innovative enough to meet the fiscal challenges this province is
facing. The Democratic Alliance would have expected Public-Private
Partnerships to be highlighted in the budget speech of the Finance MEC
as a means of funding the backlogs in this province and improving
service delivery.

The crunch-issue in the Eastern Cape is value for money and
expenditure. One would have expected an announcement to be made in
relation to invoking the stringent provisions of the Public Finance
Management Act against those officials who mismanage our scarce

There was also no mention of leveraging our key resources such as land
and budget to deal with capital infrastructure and attracting

The initial R403-million which has been identified from non-core items
in the 2010/2011 budget can be drastically improved. The DA in the
Western Cape has identified R2,1-billion in savings over a three year
period – on a smaller budget. Given the fact that the government
committed itself to an austerity campaign in November at the DA’s
urging, we would have expected this amount to be higher.

The MEC correctly touched on the need for tender reform but failed to
announce that a Bill could be introduced to ban provincial employees
from trading with the province. This is something the DA is doing in
the Western Cape.

The announcement that the budget has increased by 14,2% is misleading,
as the conditional grants of R7, 453 billion increased by 27%, which
accounts of the bulk of the increase. The real increase in direct
equitable share after top-slicing R900 million of debt is at very best
7%. The wage settlement that is agreed on this year will have a
critical impact on service delivery if it runs above inflation.

We welcome the fact that 82% of critical posts in Health will be filled
this year and the commitment to access R2, 5 billion outside of the
budget to eradicate mud-structure schools.

We are concerned that very little was said about dealing with the roads
backlog in this province and if one compares the budget of Public
Works, Transport and Roads with last year’s budget, there is no
increase. The fact that Housing increases by 23% is welcomed.”

PERCCI Operations Manager
Samantha Venter had the following to say about the Eastern Cape
Provincial Budget;

PERCCI welcomes the focus by MEC
Mcebisi Jonas on controlling public spending more tightly, enhancing
revenue streams, and closely managing funding to ensure the public
derives value and true service delivery from provincial government, as
highlighted in his budget speech today. The progress with the
provincial industrial development strategy is also encouraging, and
business looks forward to the opportunity to engage with government to
ensure delivery in this area.

Overall, we believe it is a sensible budget, and sensitive to
controlling expenditure in a time of slow economic recovery. However,
in addition to focusing on controlling expenditure, we would have liked
to have seen a focus on performance management and measuring the impact
of the expenditure in order to effectively manage service delivery.

In an environment where about 7% of the provincial work force have lost
their jobs (more than half of those in manufacturing) business welcomes
the positive impact of counter-cyclical government spending which has
to some extent cushioned the blow of the global recession.

We are in agreement with MEC Jonas that the positive lessons learnt
during the recession should be applied going forward, particularly the
positive impact of joint problem-solving involving government, business
and labour; and the vital need to adopt new approaches to spending of
scarce public resources. We agree that it is critical that the costs of
public service delivery must be controlled – and in this regard we
welcome the focus on cutting the costs of non-core areas such as travel
and accommodation – in order to free up resources for improved service
delivery in priority areas. Similarly, the approach to building
internal capacity in the public service, and reducing reliance on
external consultants, is also to be welcomed – this is a critical area
of skills development in which real capacity-building can make a
positive difference to achieving sustainable service delivery.

The launch of the R50-million cooperative development fund in terms of
the provincial development strategy is a positive move which will
impact heavily on rural development. A balanced approach is needed to
deliver on this long-awaited strategy. We would like to engage on a
provincial level regarding the strategy as we have already communicated
and engaged with the local municipality, and would like to see REAL
delivery into ensuring that the rural heartland develops and grows in
its own right. As government finalises the priority sector action plans
associated with the provincial industrial strategy, we look forward to
engagement with the province on this, participation in identifying
sectors, developing plans, and working together to put enabling factors
in place and attract investment to our area.
PERCCI also welcomes:

  • Proposed improvements to the procurement system in order to
    address corruption and collusion between officials and suppliers
  • Tight management of expenditure in order to strengthen
    provincial reserve funds
  • The commitment to fully accessing and utilising funds
    available to the province from national government
  • Additional focus on education, health and housing

A concern however, is that these departments consistently receive the
lion’s share of provincial budget, yet continue to display weak
delivery. These are the basic delivery areas which have to be managed
correctly to serve the community, support skills development and
provide for an attractive investment environment. We trust that the
measures put in place to monitor and control expenditure will have a
positive impact on delivery.

Exceeding the target of job creation through the expanded public works
programme is commendable. The MEC’s commitment to implementing a “true”
expanded public works programme, gives us hope that the ambitious
target of 480 000 jobs over the next five years is going to produce
sustainable, long-term employment opportunities.”

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