R2.9bn cut brings more delivery woes for province
Doing more with less. This is the tightrope that the Eastern Cape government has to walk this year to meet all its social and service delivery obligations while ensuring there is not a total collapse of the public purse.
Still grappling with a R13-billion knock in the slice of the budget it received from the national Treasury since 2013, due to the thousands who have fled the province, Bhisho was dealt a further R2.9-billion cut in its allocation for the next three years.
This is as a result of the R48-billion SA Revenue Service shortfall nationally and for the funding of free higher education.
Finance MEC Sakhumzi Somyo tabled a R78.4-billion budget at the Bhisho legislature yesterday.
Delivering his budget speech, Somyo said mega infrastructure projects would have to be delayed because of the budget cuts, which have hit housing and roads projects the hardest.
“Consequently, commitments by the national government to fund other policy priorities, including mega infrastructure projects that our province yearns for, have had to be delayed as the government is seized with fiscal consolidation that is aimed at servicing the national debt,” Somyo said.
He said Bhisho had been further burdened by a host of challenges, namely the medico-legal claims amounting to R17-billion as well as the infrastructure backlogs estimated at R151.1-billion.
The provincial government has been saddled with a large number of lawsuits due largely to negligence in hospitals.
This is especially prevalent with the birth of babies.
It hopes to curtail this by appointing specialised staff and training clinicians, and allocating R678-million toward hiring more staff in maternity and reproductive health services.
More money will be invested in essential life-saving equipment and modern technology to monitor and identify high-risk pregnancies.
The provincial health department was allocated the second-biggest share of the budget, at R23.6-billion.
Education received the lion’s share of about R34.7-billion.
This comprises 44.3% of the total budget for the year.
Somyo said the provincial government had been on a big drive to contain costs by monitoring overtime and out-of-town trips as well as the hiring of new staff.
Speaking to the media ahead of his speech in the legislature, Somyo said they had formed a committee that strictly assessed all government posts before they were advertised.
“We need essential staff and we prioritise those positions that we really need,” Somyo said.
With regard to civil servants’ overtime and travel claims, there had been a clampdown on travelling and more departments were making use of video conferencing and other technology to ensure they did not travel unnecessarily for a mere signature on a memorandum.
Bhisho plans to focus its energies on lobbying for a change in the equitable share formula to ensure rural provinces receive more money; preparing itself on possibly benefiting from the pronouncements on land expropriation without compensation, particularly on the agriculture front; and setting up a provincial think-tank, made up of his department, provincial treasury and the Coega and East London industrial development zones, to attract investments.
“We are highly optimistic that global demand for commodities such as agriculture and manufactured goods could potentially spur our economy through revival of investments and manufacturing exports, leading to more job opportunities for our people,” Somyo said.
Taking his cue from premier Phumulo Masualle, he said at least 50% of all goods and services procured by the provincial government would be from small to medium businesses.
This amounts to about R7-billion of the total R14-billion allocated toward goods and services in the budget.
Also, SMMEs were in line to benefit from at least 30% of all infrastructure projects, Somyo said.
“This is to guarantee that those who come from the Eastern Cape are guaranteed work,” he said, before delivering his speech.
Somyo said the Eastern Cape had to be put on an equal footing with Gauteng and the Western Cape, which were prioritised by the apartheid government when it came to infrastructure development.
Developing industrial development zones into special economic zones would be a big focus for his department over the next three years, as well as tourism, which they were looking to as a catalyst for economic growth.
“We are therefore allocating R206.8-million in 2018-19 and R650.9-million over the [medium term] to the Eastern Cape Parks and Tourism Agency to market and promote our province as a tourism destination of choice.”
The Coega Development Corporation is also in line to get R30-million in the 2018-19 year, with about R94-million allocated in the medium term to help it transition from an industrial development zone into a full-fledged special economic zone.
On jobs for young people, Somyo announced that R1.4-billion would go to internship and learnership programmes in the government over the next year.
“In addition, R7-million is allocated to the office of the premier to continue with the skills programme in partnership with VWSA.
“There is a potential for about 250 additional job opportunities,” Somyo said.
DA MPL Jane Cowley said the budget was lacklustre and lacked creativity.
“Jobs can only be created in an environment of fiscal discipline and political will,” she said.
COPE’s Lievie Sharpley said he was disappointed that nothing was said about the SAPS given increased criminal activity in the country, but he was happy with the allocations across departments.
UDM MPL Max Mhlati said he was happy special attention had been given to scholar transport, but raised concerns about wasteful expenditure.
ANC chief whip in the legislature Fundile Gade said he was happy that there was a special focus on the revitalisation of small towns.