The Eastern Cape Budget to be tabled by Finance MEC Mlungisi Mvoko on Wednesday must back the promises made by Premier Oscar Mabuyane, in his recent State of the Province Address, to rebuild the provincial economy through major infrastructure investment.
As the first provincial budget following the Covid-19 pandemic, it will be an important litmus test for both Mabuyane and Mvoko, either charting a new financial trajectory for the poorest province in the country, or sending the Eastern Cape over the fiscal cliff.
Key to the economic growth needed to rebuild our province is a significant increase in infrastructure spending. The province has, however, been spending less and less money on infrastructure development, currently spending just 5c of every Rand on it.
In comparison, 67c of every rand is going towards salaries and wages.
Finance Minister Tito Mboweni, has made it clear that above inflation pay increases for civil servants is a thing of the past, and has budgeted a zero percent increase in cost of employment this year. In stark comparison, the Eastern Cape is expected to consider a pay raise of 6% or R3,4 billion for our own employees.
Should MEC Mvoko fail to hold the line on a zero-percentage increase for Eastern Cape employees, this will significantly decrease funds available for infrastructure development.
The Eastern Cape is in the grips of a devastating seven-year-long drought, and MEC Mvoko must announce measures to assist farmers with funding to secure additional water resources.
Serious consideration also needs to be given to the financial crisis in the Department of Health. This bankrupt Department has R4 billion in accruals and nearly R37 billion in contingent liabilities for medico-legal claims. The Department has already spent more than 10% of next years’ budget!
The Premier also promised to start the long-awaited rationalization process of provincial entities. The budget will be an important indication on whether the Premier has any intention of making good on those promises.
The Democratic Alliance will continue to fight to ensure that more money is made available for service delivery and infrastructure development.