DA calls for speeding up the rationalisation of provincial entities

Issued by Retief Odendaal, MPL
Shadow MEC for Finance

For over two years the provincial government has been promising the rationalisation of its public entities. Reports have been compiled, but there is no action. Its all bark but no bite.

Given the state of the national fiscus, it is time for action, otherwise salaries for the bloated public entities will continue to increase, while overall service delivery will continue to decline.

Bloated and inefficient Eastern Cape provincial entities are spending just under R1-billion an annum on wages.

Yesterday, during the Medium-Term Budget Policy Statement Finance Minister, Tito Mboweni, highlighted concerns over the Board and Executive Management compensation and benefits at state-owned companies and public entities.

In response to a parliamentary question, Finance MEC, Mlungisi Mvoko, revealed that the wage bill, for senior executives at the province’s entities, was R90,767 million in 2018/19 financial year.

The Eastern Cape Parks and Tourism Board’s senior executives had the highest wage bill, at R43,840 million, followed by Eastern Cape Development Corporation (ECDC), at R36,791 million and the Coega Development Corporation (CDC), at R30,836 million.

The CDC also had the highest paid Chief Executive Officer (CEO), earning R5,618 million, followed by the East London Industrial Development Zone (ELIDZ) CEO who earned R4,327 million

The provincial entities total wage bill was R939,685 million for the 2018/19 period, with the CDC leading at R300,224 million, followed by Eastern Cape Parks and Tourism Board, with a wage bill of R153,093 million and the ECDC, with a wage bill of R118,322 million.

The Eastern Cape Liquor Board had the highest wage bill increase year-on-year, with costs increasing by 23% from R32,424 million to R39,754 million.

[SEE: IQP 5  qq120]

It is clear from yesterday’s Medium-Term Budget Policy Statement it cannot be business as usual, and that severe cost cutting measures are in the pipeline.

I will be writing to the Premier to request that an in-depth review of all the provincial entities must be completed as a matter of urgency, and that, where it is clear that entities are not adding value, these entities must be rationalised.

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