A budget is a political instrument whereby the governing party implements its policies and ideology. From the perspective of the Democratic Alliance a budget which is underpinned by the concept of a developmental state and cadre redeployment can never provide full value for money.
On the other hand the Democratic Alliance’s approach to a budget is underpinned by it’s philosophy of an open, opportunity society for all. In an open society there is transparency and accountability. Officials are appointed on the basis of their fitness for intended purpose and not political connections. In an opportunity society, every person must be given the chance and wherewithall to improve their circumstances.
The DA budgeting approach puts emphasis on value for money and efficiency, it places a premium on open and transparent government and it focuses on expanding opportunities for more and more people to take control of their own lives.
When one examines the new R48.2 billion provincial budget for the 2010/11 year, it is not so much of what is there but what is not there that needs to be emphasised as these factors play a major role on the overall economy of the Eastern Cape.
The Democratic Alliance believes that Government alone does not have the resources to deal with the developmental challenges that this Province faces so one therefore needs to have an innovative approach. Governments do not grow the economy and create jobs – businesses do.
We cannot reduce poverty in the Province unless we encourage investments that create jobs. This is where the issue of innovation arises. The Indian economy in the midst of the global recession last year was growing at the rate of 7 – 8% because of their investment in infrastructure (their roads, harbours, rail and telecommunications network) in spite of the high poverty levels in that country. This massive investment in infrastructure, in many cases, was financed by public private sector partnerships. The question arises –
• Could a major hospital be run more efficiently if the management of that hospital was contracted out to the private sector and that same hospital was allowed to collect its own fees?
• Could one maintain some schools better if the schools were allowed to sell off surplus land and use those funds for the improvement of infrastructure or for a housing development that could provide regular income?
• Could the province not utilise assets such as land by exchanging it with a private entity for a particular development which will create jobs or build a road where it is needed?
In the Baviaans Municipality where the Democratic Alliance is in government, an innovative partnership with the private sector has resulted in 140 plots being sold off for a new housing development. Part of the deal is that the developer takes responsibility for putting in services. This will allow the Baviaans Municipality to grow its rates base by 8% without having to lay out any funding. This is an example of how a Municipality can leverage its assets for economic growth to improve it’s financial position.
Another major issue is that of accountability. Unless there is improved accountability in this Province and the provisions of the Public Finance Management Act are rigidly enforced where there is mismanagement, we will continue to inherit poor budgetary controls. This Province has a deficit of R2.8 billion which will have to be top sliced off future budgets.
One of the ways in which accountability can be improved in relation to Provincial Expenditure is through tender reform. When irregularities take place within the tender process, it pushes up the cost of delivering services. This Province cannot afford to pay inflated prices for goods and services. Nor can it afford to have suppliers providing those services that result in shoddy workmanship. The fact that so many houses need to be repaired in this Province is an example of wasted expenditure. During the course of this year, in keeping with our agenda for accountability, the Democratic Alliance in the Provincial Legislature will be driving the issue of tender reform.
The Province also needs to focus on core business. The funding that we have needs to be re-prioritised to ensure it focusses on core business. The treasury has identified in the new budget for the 2010/11 year, R403 million in terms of savings by cutting down on catering, travel and entertainment. This is to be commended but they can do a lot better. The DA Western Cape Government has identified R2.1 billion in savings over a three year period. No new motor vehicles have been bought for MEC’s in the Western Cape, nor do they spend money on glossy adverts promoting their speeches and events.
Then off course, if we are going to create economic growth in this Province, there needs to be policy shifts. It cannot be business as usual. One needs to look at the issue of land reform in the Transkei. One needs to have a system in place whereby banks will recognise occupancy of the land so that it can be used as collateral for investment and job creation. Unitl this happens, the great potential that the Transkei holds for this Province in terms of investments and jobs will not be unlocked, Our Industrial development zones of East London and Coega need to become export processing zones. It has been shown worldwide that these create many more jobs than the current IDZ’s. EPZ’s enjoy certain tax holidays, duty free imports of machinery and raw materials. Firms are exempt from certain labour laws.
To improve the quality of life in this Province we need to do things differently. We need to leverage our resources to create jobs and attract investment. When I was in Communist China recently, which is experiencing a 9 – 10% growth rate, I asked how they made a policy shift towards a more free market economy. They replied that they do a pilot project and if it works, they make a change. We need many pilot projects in this Province and lots of change.