The Democratic Alliance supports the report of the portfolio committee of Finance on consideration of the Division of Revenue Bill.
We support the recommendations of the committee which includes the reservations in relation to the Bill, to which we wish to add some of our own.
One of the key recommendations of the report is the need to review the formula for the allocation of the equitable share, particularly the weighting given to the poverty component.
After the Province of KwaZulu-Natal, the Eastern Cape has the second highest incidence of poverty in the country. Unless we can overcome some of the historical backlogs in this Province, we will not be able to move forward on a number of issues.
If we just look at the issue of Roads for example, it has been estimated that this Province has a backlog of R18 billion. There is just over R800 million in our Provincial budget for the maintenance of roads. This is totally inadequate and we are going to continue to move backward as far as roads are concerned unless something dramatically changes.
Part of the change needs to lie at National Government level with regard to the weighting given to poverty levels in this Province. This must change.
The other part of the answer also lies with us in working smarter with less.
The committee report also highlights that the allocation for drought relief is inadequate. One would agree that the amount that is given to this Province is not going to assist the commercial and emerging farmers to the extent that it should. We have only been given a small part of the amount, R68 million out of R1.3 billion that we have asked for. Agriculture is one of the backbones of this Province and we need to ensure that it is properly assisted in times of drought.
Another issue that was identified in the report is that the percentage of the total national revenue that is given to local government appears insufficient given the fact that this is the sphere that is closest to the people.
In the 2010/11 budget the percentage allocated to local government is 7.9% which rises to 8.5% in 2011/12 and to 8.8% in 2012/13.
These issues that have been raised in the committee report all point in the direction for the need for more funding. This is the cry of many provinces as was pointed out to us by the representative for the national treasury who briefed us on the budget. If more funding is allocated in one area, less funding is allocated in another area.
The issue of better budgeting cannot just be confined to the issue of funding. We need to look at other areas to ensure that we get more bang for our buck.
This raises the issue of :
1. The need to work more efficiently with what one has got.
2. What should Government be funding and not funding?
3. How can one leverage one’s resources to improve funding?
Time permits me to deal with one.
The DA budgeting approach puts emphasis on value for money and efficiency. Through proper and effective monitoring, the Province can assist Municipalities to spend their money more efficiently and effectively. This means invoking the provisions of the PFMA to ensure that projects at local government level are properly monitored where transfers take place.
We cannot afford to waste one cent on non-core expenditure. We need to realise that the National Government debt service costs are due to increase from R57,6 billion in 2009/10 year to R104,02 billion in the 2012/13 year. That is a massive rise of almost R48 billion rand in debt service costs.
It is an amount equivalent to the entire Provincial Budget of the Eastern Cape. Unless we manage our resources better we are in danger of getting into a major debt trap in this country.
The last point I wish to raise is that of leveraging our resources more effectively. This Province has the wonderful asset of land which is a totally underutilised resource. We need to examine how we can use our land more efficiently to leverage investment from the private sector, an example of which is swopping a parcel of land in a particular area for the private sector to build a road which we would otherwise be unable to afford.
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