Eastern Cape government needs to cut costs to survive

Issued by Retief Odendaal, MPL
Shadow MEC for Finance

There needs to be a strong focus on cost cutting measures and financial responsibility from the MEC for Finance, Mlungisi Mvoko, during the tabling of the Adjustment Appropriation Bill in the Eastern Cape Provincial Legislature tomorrow.

Last month Minister of Finance, Tito Mboweni, made it clear that it cannot be business as usual, and that significant cost cutting across the board is in the pipeline.

The Eastern Cape government needs to be pro-active in assessing its finances and MEC Mvoko needs to look at slashing non-core expenditure.

The province spent over R798-million on travel and subsistence, R450-million on consultants, R99-million on catering and R511,000 on entertainment in the last financial year.

There needs to be a tougher stance taken with departments over the implementation of the recommendations of the Auditor General, and there needs to be harsh action against those who do not comply.

R928,477 million was identified as unauthorised expenditure, and R67,231 million was identified as fruitless and wasteful expenditure in the last financial year.

One of the biggest challenges the province faces is the escalating cost of employment, which is simply unsustainable, and drastic measures need to be taken to address this. This should include a moratorium on the filling of all non-essential vacancies.

We are also hoping that the MEC will announce a moratorium on the purchase on new vehicles for MECs, and that a commitment will be given to implement the rationalisation of provincial entities, which are costing the province close to a R1 billion a year.

Last month the DA revealed that these public entities spent R90,767 million on senior executives, with the Coega Development Corporation CEO earning R5,618 million, followed by the East London Industrial Development Zone CEO who earned R4,327 million.

Funding spent on non-core expenditure needs to be redirected, with at least R1-billion being allocated to the Department of Health to mitigate the effects of accruals, which has paralysed the department financially, and is set to reach record highs this year.

A further R500-million is needed to give further assistance in drought aid to farmers and for provincial drought interventions in water scarce municipalities.

We cannot continue to do the same things and expect different results. If the province is not pro-active in curbing expenses and addressing financial mismanagement, departments could find themselves in the situation where they are unable to meet their financial obligations. This, in turn, could severely impact on the service delivery to the people of the Eastern Cape.