Full steam ahead for EC Gravy Train, despite fiscal cliff

Issued by Retief Odendaal, MPL
Shadow MEC for Finance

The tabling of the Appropriation Bill in the Eastern Cape Provincial Legislature today made it abundantly clear that its full steam ahead for the Eastern Cape Gravy Train, even if the tracks are heading straight over the fiscal cliff.

South Africa’s economy is in recession, with the weakest annual growth rate since the global financial crisis. The Eastern Cape is haemorrhaging jobs, with the highest unemployment rate in the country. Businesses are closing. Investors are going elsewhere.

Despite this, the message delivered by MEC for Finance Mlungisi Mvoko was clear: It’s still business as usual in the Eastern Cape, with hundreds of millions of taxpayers money ready to be wasted.

MEC Mvoko once again failed to address the elephant in the House; the rampant, unaffordable cost of employment (COE) in the public sector.

In fact, COE has gone up from 65% to 67% of the total budget, up from R55 billion to 57,5 billion, and is projected to reach R63.3 billion over the medium term!

This is in sharp contrast to Finance Minister Tito Mboweni’s announcement that we need to cut R160-billion from the public sector wage bill over the medium term.

Failure to address the ever-increasing COE will lead to the systematic collapse of service delivery in the province, as less and less money is left for infrastructure, goods and services.

The reality is there is simply no political will to implement these cuts.

We were hoping that the MEC would give details relating to the rationalisation of our bloated Provincial State-Owned Entities, which are costing the province hundreds of millions with very little in return.

Instead, we heard today that these entities budgets have been increased, with a cumulative increase of close to 12%.

The province continues to spend money on frivolous, non-service delivery related matters, while struggling to pay its creditors in departments such as Health and Education. Accruals for these two departments are expected to reach R2,9 billion by the end of this financial year!

There were no reprimands for the repeated failings of departments to implement the recommendations from the Auditor General. The MEC also failed to say whether the political leadership would be held to account for the vast amount of fruitless, wasteful and irregular expenditure under their watch.

In short, this was a budget that is completely out of touch with the financial realities that are facing the province.

Sound clip in English