Speech Notes: Consideration Of The Adjustments Appropriation Bill, 2020

Issued by Retief Odendaal, MPL
Shadow MEC for Finance

Honourable Speaker, Honourable Premier, Leaders of Political Parties, Members of the House

In January 2020, ahead of the COVID-19 pandemic, the Hon Minister of Finance, Mr Tito Mboweni, warned that if the country could not effect deep structural economic reforms, then it would be game over for South Africa.

Fast-track to June this year, ahead of the Special COVID-19 Adjustments budget Mr Mboweni said:
We can no longer spend the way we were spending before. We can no longer do things which we had hoped to do before.”

The economy of the Eastern Cape has not been spared the devastating impact that the COVID-19 lockdown has had on world economies.

The Province already has the highest unemployment rate in the country, at 40,5%, and is considered to be the poorest Province in South Africa with Gross Domestic Product per capita some 39% lower than that of the national average.

Economists are widely expecting that the Second Quarter GDP figures, which are expected to be announced later this month, will show that our economy has contracted by as much as 8%.

This, Speaker, will not bode well for the Eastern Cape, as the “poorest province in the country.” A massive downturn in economic activity will only lead to more unemployment, more poverty and more hardship for the people of the Eastern Cape.

It makes sense then that government has to do everything in its ability to ensure that the aftermath of the COVID-19 pandemic does not destroy our already fragile economy.

Now, more than ever before, the Eastern Cape Government must be responsive towards the needs of the residents of the Eastern Cape. Now, more than ever before, the government needs to create an enabling environment so that business can survive these turbulent economic times.

Speaker, if our economy is to survive the onslaught of the COVID-19 pandemic, government and private sector must work together in order to find solutions. Whilst the Eastern Cape Government has a dismal track record of being responsive towards the needs of business in the Eastern Cape, failure on the part of this provincial government to listen and provide support to various sectors in the private sector this time around, could prove to be fatal.

Speaker, against this backdrop I am ashamed to stand before this house and speak on an Adjustments Appropriation which offers the people of the Eastern Cape no hope at all.

What should have been a budget to support and guide our people through the worst health and economic crisis that have ever faced this country has become a box-ticking exercise for bureaucrats.

At a time when the government should be pulling out all the stops to assist those people who are bearing the brunt of the economic fallout caused by draconian lockdown measures that were put in place, this government has decided further relief measures can wait.

Yes, unfortunately, what we have before us is a document that only accommodates the changes to grant funding allocations that National Treasury has effected in the National Adjustments Appropriation.

When we talk about government being responsive to the needs of people, this Budget cannot be further away from this goal. Notwithstanding all the discussions and deliberations of the Finance Committee on the fiscal and economic challenges that the Province and the country are facing, sadly, none of those considerations has been included in this Budget.

Why? Because this is a document that has been prepared by our officials and has had absolutely no input from any politician whatsoever.

During our extended deliberations, the committee members made many submissions for considerations. Amongst these submissions were the following from the Democratic Alliance:

  1. The Establishment of a Tourism Recovery Fund. The Tourism industry has been one of the hardest hit by COVID-19 as a result of international and local travel bans. Investment in tourism could possibly yield very positive results, quickly;
  2. The Establishment of a Provincial SMME COVID Support Fund. Savings within the existing Budget of at least R1 Billion should be utilised to support small and medium enterprises who have not benefitted from other support funds from national government;
  3. Additional Budget to be made available and set aside for urgent Drought Relief measures for struggling farmers;
  4. Establishment of a once-off bailout fund for cash strapped municipalities. Assistance could be given to qualifying cash strapped municipalities which are willing to implement a strict financial turnaround plan to be monitored by provincial treasury;
  5. Budget virements to be affected to non-core service delivery related spending in order to prioritise spending on capital infrastructure projects which will get our contractors, but more importantly, the people of the Eastern Cape working again.

These submissions could easily have been accommodated in the Adjustments Budget but sadly, are not.
The message is thus clear- People of the Eastern Cape, you are on your own. The ANC government of this Province will not look after you in your hour of need and will offer the Eastern Cape economy no lifeline amidst these most turbulent financial times.

Speaker adding insult to injury is the fact that our existing Budget has been severely underspent. As at the end of the first quarter of the current financial year, the provincial government has to underspend its Budget by some R2,364 million.

So let me make this perfectly clear. We have an economy that has been decimated by the effects of a global pandemic and we have additional funding available due to our under expenditure as a province in the current financial year. But, we are unable to come up with any meaningful or innovative ways to assist our people or our economy?

We should be ashamed of ourselves.

Notwithstanding the repeated warnings that the Province received from National Treasury that we have to cut wasteful expenditure and move to a zero-based budgeting system as from next year, the Province has done nothing to change expenditure patterns of our departments in the Budget at hand.

Minister Mboweni talks about deep structural reforms! In the Eastern Cape, we can’t even restructure a budget, let alone embark on deep fiscal or economic reforms.

Speaker, if nothing else, we could at least have provided the terminally ill Department of Health with a bailout to alleviate their financial woes once and for all. This house has discussed the unfolding financial crisis in the Department of Health ad nauseam, but to date have come up with no solutions. This adjustments budget is yet another golden opportunity to save this department from bankruptcy, but alas, this is not to be.

Speaker, this government is no better than the previous one. It is inept, unresponsive and uncaring.
The Democratic Alliance rejects the Adjustments Appropriation for lack of credibility and substance during the current economic and socio-economic circumstances.

This is a COVID-19 Adjustments Budget without any actual funding being set aside to deal with the consequences of the COVID-19 pandemic!

This Budget is an insult to the people of the Eastern Cape and bears testimony to the fact that this government has no solutions to the problems of our beloved Province.