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Budget reaction: no game-changers to put EC on high road to opportunity

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The Eastern Cape MEC for Finance and Provincial Planning, Sakhumzi Somyo, tabled the provincial budget for 2016/17 in the Bhisho legislature on Friday 4 March 2016.

Dear MyPE

This morning the MEC for Finance and Provincial Planning introduced a budget of R69.590-billion.   A budget is not just about rands and cents it’s about creating opportunity.  In a province where it is wastage unusual, it cannot be business as usual.  Although he struck some key notes, history shows the province does not sing along.

The MEC made no game-changer announcements that could put this province on the high road to opportunity.  What we would have expected is clear leadership and concrete plans on a number of key issues to slash waste and contain costs.

The key areas are:

  • 5 478 additional teachers; when there are 4 939 posts crying to be filled;
  • The reported 23,7 % of civil servants on extended sick leave;
  • Lack of management with procurement and over-the-top prices;
  • Irregular expenditure of R1.43-billion;
  • Medico-legal costs;
  • Under-expenditure on infrastructure that will occur this year; and
  • Clear plans to reduce the high percentage of personnel cost in the budget (for example, early retirement for those in non-core posts over the age of 63).

We would also have like to have heard visionary game-changer announcements like the rollout of broadband in this province which stimulates smart growth and e-learning in our schools.  Tourism has massive potential to create jobs but only received a 1,6% increase.

Actual funding for service delivery as a percentage of the previous budget has declined while salaries have increased.   Conditional grants increased by a paltry 1,7%, equitable share by 6,8% but staff cost by a whopping 7,5% compared with last year’s budget.

In the Eastern Cape, staff costs as a percentage of the budget are 65% whereas in the Western Cape it is 54%.

We welcome the R400-million allocated to municipalities in the second Adjustment Bill, tabled today, and, in particular, the additional R300-million for housing in Nelson Mandela Bay, which forms part of this allocation.

We welcome the commitment to streamlining public entities and reducing the high cost of salaries paid to board members, as well as the R265-million for drought relief and the R317-million to provide service to children in need of care and protection.

We welcome the increase of 10% in the HIV aids grant and the 5% increase in the national school nutritional grant.

It all boils down to financial management.  In the Western Cape, 20 out of 24 provincial entities received clean audits.  In the Eastern Cape, only four out of 24 managed this.

Regards

Bobby Stevenson

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