This province faces a number of challenges when it comes to the macroeconomic and fiscal environment. These challenges can be summarised as:
- Weak Economic Growth
- Fiscal Slippage
- The Wage Bill (66% – 63.3%)
- Institutional Vulnerability
The country as a whole is experiencing weak economic growth, where this year it is projected to be at 0.7% barely increasing to 1% in 2018. This weak economic growth can be solely laid at the door of the policy uncertainty created by the political in-fighting that is currently going on in the African National Congress.
We have the weakest economic growth of all the emerging countries and one of the highest income inequality rates. This weak economic growth impacts the unemployment prospects for people in this province.
We have the highest unemployment rate in the country according to the latest quarterly Labour Force survey which is now at 35.5% in the third quarter. This means that there are now a total of 781 000 unemployed people in our province. When one adds the number of discouraged work seekers of 360 000, it takes you to 1 141 million people.
The catastrophic management of our economy is exposed by the sheer horror of these statistics. We are paying the price of not only the national economic meltdown but also the political divisions in the province. ANC congresses where chairs were thrown around instead of ideas do not promote the climate for investment that we need for job creation.
At the moment, the expanded rate of our unemployment is 45.3%. Hundreds of thousands of people cannot put bread on the table for their families, and the number is only getting worse. The hardship of unemployment is wreaking havoc amongst families as they battle to pay for schooling, food and medical expenses.
Unless we get the politics right we will not get the economy right. This is clear from the ongoing in-fighting in the ANC and the recent medium-term budget policy statement delivered by the Minister of Finance, Malusi Gigaba, in Parliament 25 October 2017.
The second issue which I would like to highlight is the fiscal slippage that is taking place in South Africa at the moment, which also impacts the Eastern Cape.
The government is looking to implement R30 billion in tax hikes and more than R50 billion in spending cuts in 2018, as it struggles to deal with the ballooning debt.
Accruals or outstanding payments of Provincial Departments, in the Eastern Cape, have come in at R3.889 billion from the previous financial year. This is an increase of 56% percent or R1 409 billion.
In contrast, the DA government in the Western Cape has accruals in the region of only R200 million.
These accruals have a crippling impact on some of the provincial departments as well as our struggling Eastern Cape economy.
The knock on effect of businesses not being paid within 30 days last year – as of last year December, which is 6478 businesses, is horrific. It results in bankruptcy and layoffs which just add to the unemployment rate.
What is of great concern is that the Health Department accruals have now reached R1 914 billion. It is therefore appropriate that in the adjustment budget that R629 million out of R782 million goes to the Health Department to address various problems, including staff shortages in areas that contribute to Medico-Legal expenses.
On page 43 of the Combined Financial Statements of the Province, it points out that the claims against the province are now totalling R 17 763 billion. This is indeed a horrific figure. The Treasury needs to assist the Department of Health as a matter of urgency in dealing with this matter.
I did advise Treasury Officials of how the Western Cape deals with this. They have a doctor who is both a qualified paediatrician and a lawyer who assists in dealing with these cases. Medico-Legal claims in the Western Cape are currently R32, 9 million. This is a clear indicator that the approach of the Western Cape is succeeding.
The next issue which I want to address is institutional vulnerability. By this, I am referring to how one deal’s with corruption and maladministration. The Hon. Martin, when he addressed the House yesterday, was one of the strong few who believed that corruption be dealt with and that forensic reports should not gather dust, I too agree with that.
In the finance meeting yesterday, I queried why no payments have been made to the Eastern Cape Frail Care Centres this year that operate two frail care centres in Nelson Mandela Bay. These payments should be made at a rate of R4.2 million a month. The answer I was given was that the service provider was not being cooperative in coming to an arrangement. The issue which the Treasury Department has failed to comprehend is that there is a court order and the court order compels the Department of Social Development to pay this amount. The failure of the department to pay is in contempt of court and contrary to their own agreement which they signed; this schedule is enforced until May 2018. Last year, when this House turned a deaf ear to my plea for these two frail care centres the courts had to intervene to stop this gross violation of Human Rights. I trust that a second intervention would not be necessary.
With regard to Nelson Mandela Bay, the Hon. Martin said that people are not left with much change in their pockets. Well, after 23 years of running that municipality into the ground I am not surprised that Hon. Martin made that statement. I would also refer the Hon. Martin to the book “How to Steal a City”, which details some of the looting and stealing that took place under the previous ANC government.
The good news is that in October 2017, the revenue collection rate was 100.5% for the municipality. This means that hundreds of millions of rands are now flowing into the municipality’s coffers, which never flowed in before.
The other point that the Hon. Martin did not mention, is the sabotage that has been taking place in that municipality. I am referring to the hardship that people were experiencing in the Northern Areas, where two poles that were carrying electricity to the communities of Mission Vale, Salt Lake and Windvogel were burnt down which denied them of electricity for some period of time.
Likewise, the municipalities water valves were also turned off which resulted in 150 000 people in parts of the townships in Port Elizabeth, not having water.
In response to the Hon. Chairperson of Finance, the new enemy is not unshackled capitalism but state capture. It is the vanguard of corruption which is the new oppressor that is monopolising opportunities on the basis of self-enrichment for the few and not the many.
These cartels of greed are enslaving the masses of our people in poverty. These monopolistic cartels of greed need to be broken up so that freedom can reign in our economy.
The battle in South Africa is no longer between classes but between the insiders and the outsiders, those who are connected to the means of production and those who are not.
The Democratic Alliance is committed to bringing change to Nelson Mandela Bay, to Kouga and to the entire Eastern Cape.
We look forward to the opportunity when after the 2019 elections take place, to implement some of our policies in this province, which will put it on the high road to prosperity by creating opportunities to millions of our citizens who are currently denied of them.