Provincial Departments and Provincial Treasuries need to get a firm grip on their capacity to spend and they also need to take action against those officials that cannot spend budgets.
I have entitled my speech “a non spender continua” because history continues to repeat itself year in and year out in this Province when it comes to under expenditure.
The massive under expenditure in this financial year on conditional grants and capital which is largely for infrastructural spending, flies in the face of Government’s attitude to create jobs. It is common cause that infrastructural spending results in job creation. Yet against budget, we continue to underspend in this Financial Year after having to roll over R894 million from the previous financial year and having lost at least R400 million because of incapacity to spend.
People are crying out for houses, people are crying for decent schools, people are shouting for decent roads yet the Eastern Cape continues to underspend on capital and conditional grants.
According to the six monthly treasury figures for the Province, the Province has underspent against budget by R1 billion on conditional grants and R549 million on capital expenditure.
Last year’s massive under expenditure by Health (50% of its capital budget) – and education only spending 33% of it’s capital budget, is set to repeat itself. The consequences of this is the long term deterioration of one’s assets. Non spending of capital expenditure has an impact on our economy and our economy is not in a healthy position right now.
Where we can assist the economy in our Province, we need to. The failure to spend money on capital works has a negative impact on job creation in this Province so one finds this glowing contradiction that one of the number one priorities of government is to create jobs but you fail to spend the money that is there that would assist in boosting our economy that can create those jobs.
The ANC is a struggle organisation. I know that you are proud of your role in the struggle but it is time for you to make a changed. Even though in Government, you are still acting like a struggle organisation because you are struggling to spend money that is there for education, you are struggling to spend money that is there for Health – please give up the struggle and start governing. This is what this Province demands.
On the other hand, the province is not struggling to spend money when it comes to personnel expenditure. In the first six months of this year, the Province overspent by R889 million on personnel. If one subtracts the R9 billion of conditional grants from the overall R54 billion provincial budget, 80% of what is left continues to be spent on personnel. If this trend continues over the next few years rising by 2% a year, there will be nothing left for service delivery in this Province.
In previous years I have called for benchmarking when it comes to personnel costs – that we set a cap in the budget and we don’t go over that cap – this is simply good financial planning and sound economics.
You see this Government is facing a critical choice, you either want to end up being an employment agency for the elite, or you want to be a service delivery agent for the majority of people in this Province – you can’t do both.
Why is it that this Province has to pay more and more to deliver less and less.
The main culprits when it comes to over expenditure on the cost of employees are Health (R388) and education (R597). When it comes to capital expenditure, the department of health has underspent by R168 million and education by R350 million against budget.
Regarding conditional grants, education is under expended against budget by R299 million on the educational infrastructural grant. The other big culprit is Housing that has underspent by R350 million against budget.
It is not only at Provincial Level that there is massive capital under expenditure but also at Municipal level. 31 Municipalities in this Province underspent on their capital budgets with Nelson Mandela Municipality and Port St Johns showing the highest. Municipalities aggregate spending on capital was R3.449 billion or 63,7% of their total adjusted capital budget of R5.4 billion. On the other hand, Municipalities were owed as at the end of June R4.4 billion in consumer debt.
We need to speak the truth to one another when it comes to under expenditure. Kufuneka sithethe inyani.
The reason why we can’t spent the money is that we don’t have the right people employed. We are protecting people in jobs who cannot do the work. One only has to look at the report of the Auditor General that was tabled in the national assembly last week on infrastructure spending.
In the department of education the average contract period in relation to average delay in completion of contracts was nine months as opposed to 53. So contracts in the education department for infrastructure delivery that should take 9 months on average, end up taking 53 months. This is the worst in the country.
The Health Department was the second worst in the country. The average contract period should have been 18 months but ended up taking 35 months. What one also finds is that penalties that should be enforced for slow progress and delays, are not completely enforced and, on the other hand, late payments, result in interest charges being levied against Departments.
We need to take action against those officials who are not delivering. You need to have the political will and courage to do so. We also need to adopt a new model of service delivery when it comes to capital expenditure. We need to look at bringing in the private sector and a model that utilises more and more of the private sector and less and less of the governing sector. It is the business of government to regulate. It is the business of the private sector to operate.
In that way Government can be in charge and in control – at the moment you are in charge but expenditure patterns in this Province are out of control.
Why is it, chairperson, that the private sector can build massive stadiums in record times but we can’t spend the money that we have.
Something is rotten and we need to get rid of it.