Urgent budget amendments could free up R1-billion to help fight Coronavirus

Issued by Retief Odendaal, MPL
Shadow MEC for Finance

Urgent amendments to the Eastern Cape budget allocations could be made that would free up R1-billion in funds, which could be given to the Department of Health to assist in the fight against the Coronavirus in the province.

I have written to the Finance MEC, Mlungisi Mvoko, and to the Chairperson: Finance and Provincial Treasury Committee, Vumile Lwana, requesting an urgent committee meeting to discuss the budget adjustments proposed by the Democratic Alliance.

Download Letter

The final figures for the 2019/2020 financial year, which ended last week, have not been tallied yet, but the Department of Health is facing accruals of close to R2,9-billion rand.

This again highlights the unfortunate inability of the administration to deal with the ever-increasing accruals which have seen creditors of the Department of Health experiencing huge delays in receiving payment for goods and services rendered.

Considering the financial commitments of the department for the financial year at hand, as well as the contingent liabilities insofar as medico-legal claims are concerned, the Department of Health is factually insolvent.

This is now likely to be exacerbated by the fact that the department will have no choice but to proceed with unplanned, emergency procurement for goods and services that will be utilised in the fight against the Covid-19 pandemic.

Against this backdrop it is my considered opinion that Provincial Treasury must immediately rework the 2020/21 budget and propose budget cuts across all departments in order to assist the Department of Health with their cash flow and overall liquidity.

This commitment of additional funding to the Department of Health would go a long way in alleviating any concerns that potential contractors or service providers may have in doing business with the department in providing goods and services required by the province in the fight against the Covid-19 pandemic.

The Democratic Alliance has made the following suggestions insofar as departmental budget cuts are concerned:

  1. R350 Million in respect of Travel and Subsistence (A total of 47,5% of total budget);
  2. R50 Million in respect of Departmental Catering (A total of 43,1% of total budget);
  3. R350 Million in respect of Cost of Employment (A total of 0.6% of total budget);
  4. R25 Million in respect of Cost of Advertising (A total of 40% of total budget);
  5. R25 Million in respect of Training and Development (A total of 9,2% of budget);
  6. R25 Million in respect of Office Stationery (A total of 15,2% of budget);
  7. R100 Million in respect of Cost of Communication (G&S) (A total of 31,7% of budget);
  8. R75 Million in respect of Transfers to Provincial Entities (The respective entities would be required to identify savings within their own respective budgets. This amount constitutes 4.8% of the total budget for transfers to provincial entities for the year. Provincial entities however received an 11.8% increase in budget for the 20/21 MTEF).

Collectively, these savings total R1 Billion, the majority of which would be taken from non-core service delivery budget line items that will not have a direct impact on service delivery within the province.

The savings in Cost of Employment can be affected by invoking a moratorium on the filling of administrative vacancies for the year at hand.

There is no bigger threat to our people and the economy of the Eastern Cape than this pandemic and as such the Department of Health needs to be given whatever resources necessary to fight this battle!

Listen to English voice clip

Listen to Afrikaans voice clip