The Provincial Treasury, as a matter of urgency, needs to deal with the rising costs of the public service in our Province.

One finds that on the one hand, the cost of employees is going up and service delivery in relation to capital expenditure is going down. The Province is paying more and more for less and less and the people of the Province are the big losers.

In the last financial year the employee costs of this Province rose to R31,448 billion as compared to R28,300 billion in the previous financial year, that being 2009/10. The percentage spent on employee costs of our Provincial Budget is 65,3%. This is the highest of all Provinces in the country. The lowest is the Western Cape at 53%.

If one removes conditional grants from the equation and we relate this to equitable share alone, then the cost of our employees was 77% of the provincial budget. This leaves very little left for actual service delivery.

In the education department these figures are even higher with 87% being spent on the costs of employees.

While we overspent the last financial year by R588 million on cost of employees, we underspent on infrastructure by R1.482 billion and conditional grants of R1.2 billion. The Province lost R628 million due to low spending capacity mainly in infrastructural grants.

The consequences of increasing personnel costs and underspending on infrastructure are putting this Province on a disastrous route. According to the recent discussion document released by the National Planning Commission, infrastructure is at the core of most of South Africa’s social, economic and political problems as both a cause and a solution.

Successful countries generally invest at high rates and continually modernise public infrastructure to suit a growing economy. However, as the commission pointed out, South Africa has effectively missed a generation of infrastructure modernisation. Having solid infrastructure is the lifeblood of a nation. It ensures that products get to market and markets are accessible to consumers. It can be likened to the arteries that ensure blood flows smoothly through the body. When they become riddled with holes or when they clog up, the heart fails. Likewise the economy fails too.

It was John F Kennedy who famously remarked that it is not the wealth of the nation that built our roads network, but our roads network that built the wealth of the nation.

Underspending on infrastructure is a total disgrace. The question needs to be asked – Why this occurred? And what are the consequences going to be?

The Eastern Cape had the lowest pattern of capital expenditure of all the province for the 2010/11 financial year. This impacts negatively on the lives of the poorest of the poor in this Province who are desperate for better education and better healthcare.

Overall this Province only spent 65% of its capital budget. The fact that education only spend 43.9% and Health only 55.1% for the last financial year must serve as a wake up call to the Provincial Government.

It is a tragedy that funds are available but can’t be spent when there is a crying need throughout this Province for better education and health facilities.

Schools without roofs and hospitals that lack basic equipment violate people’s human rights.

This situation, under a DA Provincial Government would never occur.

The treasury needs to set a level beyond which personnel costs cannot rise. We cannot continue along this road as the Province will slowly have to wind down serivces because of increasing personnel costs. We will be reduced to an employment agency. When we underspend on capita, it is quite clear that the people we have working for us cannot do the job. To change the situation will need strong politcal leadership. We simply cannot afford to employ people who cannot execute the tasks that are given to them.

Is the MEC planning any move to rationalise staff? How does Treasury plan to deal with the problem across Departments that people are unable to spend budgets?

But to turn the situation around also starts at the top. The Premier needs to sign performance agreements with her MEC’s and when a Department doesn’t perform, there needs to be real political consequences. The political head must go. It is only in this way that we will enforce accountability in this Province when it starts right at the top.


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