The recent KwaZulu-Natal (KZN) government department budget debates have been dominated by a persistent and concerning theme: Money does not grow on trees and departments cannot spend what they do not have.
The lead voice on this has been DA Finance MEC, Francois Rodgers, who has repeatedly made the argument that due to cuts of R66billion over the past four years, with an additional R36 billion over the MTEF,the state of revenue availability in KZN is dire and expenditure must be monitored with obsessive discipline.
Government departments, like many households and businesses, are facing a serious fiscal crunch and must prioritise the proverbial tightening of belts through innovation and cutting frills. While the situation is unavoidable, KZN’s administration would be justified in protesting against the treatment it has received at the hands of National Treasury.
All provinces generate and receive funding from three principal sources – tax revenue, administration fees and the equitable share. Tax revenue and administration fees seldom amount to much more than 5% of these funds, leaving provinces at the mercy of National Treasury for the lion’s share of their funding.
The determination of this equitable share is an extremely complex calculation, taking into account no less than 10 factors in terms of Section 214 of the Constitution. While the process is a difficult one, what should not happen is the shifting of goal posts after the share has been allocated. Yet this is exactly what has happened in KZN.
National Treasury always advises Provincial Treasury to allow for salary increases and provides expected parameters for this allocation. In KZN, this was dutifully factored in, only for excessive national wage agreements to be foisted on our province without any provision for cover from National Treasury.
This disastrous situation represents giving with the one hand and taking away with the other, effectively leaving many of the allocated departmental Compensation of Employees (CoE) increases unfunded.
To add to this, Provincial Treasury must also deal with unfunded mandate legacies such as the Jacob Zuma initiative to fund iziNduna with salaries, tools of trade and premises – a mandate now costing more than R350million – with no assistance from National Treasury.
It is clear that KZN’s administration has been given a beer budget and is now expected to deliver a champagne breakfast – an impossible task requiring financial wizardry more at home in fairy tales than the real world.
While MEC Rodgers and the provincial treasury team have been proactive in pursuing other sources of revenue generation, our province remains limited in its revenue generation opportunities.
This money will also not address KZN’s almost R8billion projected shortfall at current expenditure trends, taking into account the total equitable share cuts of R79billion over 7 years. These cuts, and the subsequent provincial government department budget cuts are clearly impacting on service delivery in critical departments such as Health, Education and Social Development.
Despite these severe challenges, the DA remains committed to ensuring that KZN’s government departments spend their meagre funds wisely and frugally. We are also determined to bring to book any financial delinquents who – despite MEC Rodgers’ warnings – continue to spend with reckless abandon to the detriment of the people of our province.