Province has less to spend due to dwindling population
The flight of people from the Eastern Cape has cost Bhisho dearly. Thanks to the thousands who have fled the province in the last four years, the Eastern Cape has taken a R10-billion knock in the slice of the budget it has received from the national government since 2013.
By August, 247 000 had migrated from the province in one year alone, according to Statistics SA.
Adding to the pain, Finance MEC Sakhumzi Somyo announced in his budget speech in Bhisho yesterday that the province also had to forgo 1% of its share from the national Treasury to help reduce South Africa’s rising debt.
Somyo tabled a R74.4-billion budget yesterday.
Finance Minister Pravin Gordhan indicated last month that the debt was half of the country’s gross domestic product.
Yesterday, it emerged that all nine provincial governments and national departments would have to take a 1% cut in their share from the Treasury.
The Eastern Cape’s 1% amounts to R380-million The departments receiving the bulk of the budget are:
Health: R21.7-billion; Roads and Public Works: R5-billion; Social Development: R2.6-billion; and Human Settlements: R2.6-billion.
over the next three years.
“This means that the provincial government has to continue doing more with less,” Somyo said.
After a five-year promise to trim Bhisho’s wage bill, he said salaries had been reduced to 64.6% of the total budget, from 65%.
Speaking to the media earlier, Somyo said while the 0.4% cut in the wage bill might seem meagre, it brought huge savings for the province.
However, he did not say how much.
Broader cost-cutting efforts resulted in savings of R723.4-million over the 2016-17 financial year, Somyo said.
His plan was to reduce non-core services further and generate revenue through departments such as transport, health, public works, economic development, environmental affairs and tourism.
Somyo said they were also planning to rationalise provincial entities, which they hoped would cut operational costs and improve efficiencies.
The province’s economic outlook remains gloomy.
The provincial government hopes to turn the tide by focusing on agriculture development as well as social and economic infrastructure development.
Bhisho will also focus on improving its information communication technology infrastructure by spending R218-million on rolling out its broadband strategy from next month.
“Our approach to radical economic transformation is premised on inclusivity that brings on board every community in our province,” Somyo said.
“As per our effort to create employment, closing the gap of inequality and addressing poverty, the economic sector is allocated R10.209-billion in the 2017-18 financial year.
“This will see an enhanced focus on the six economic sectors where the province has a comparative advantage, namely agriculture development, the automotive industry, light manufacturing, renewable energy, oceans economy and tourism.
“It is our overarching vision that we create an enabling economic infrastructure which will see the rapid modernisation of our economic centres while attracting new investors into the remote areas where our people live.”
The Coega IDZ and East London IDZ were key institutional pillars of Bhisho’s economic strategy.
Somyo said about R120million would go towards the development of skills and sustainable youth enterprises, but only once credible business plans were in place and approved.
ANC chief whip in the legislature Mzoleli Mrara welcomed the increase for agriculture, saying the party had taken a decision to make it a priority, along with education and health.
“We are not happy about the outcomes we are getting from education and health,” he said.
“Despite the amount we keep pumping into education, we remain at the bottom.
“We are concerned about the corruption in the health sector.
“Lawyers are camping out in hospitals – minor mistakes [turn into] legal claims before they are corrected. They [lawyers] have agents in hospitals working with corrupt officials to steal people’s files to make up cases for civil claims.”
Mrara said premier Phumulo Masualle had to deal with officials who failed to spend their allocated budgets.
“The premier needs to strengthen his hand in dealing with nonperformance because now the process will be facilitated by the officials, like various heads of departments.”
The DA’s leader in the legislature, Bobby Stevenson, said there had been no bold pronouncements about doing things differently.
He criticised the 7% drop in the amount allocated to economic affairs, environment and tourism.
“If you are talking about boosting the economy of the province, that is one budget that needs to be boosted,” Stevenson said.
On the wage bill, he said there were no clear plans to reduce it.
“One of the things that could be done is giving early retirement to staff over 60, especially those in non-core positions – that could save us money over a period of time, he said.
“There is also an issue of civil servants on extended leave, those cases need to be resolved speedily.”
COPE MPL Lievie Sharpley said while it was a great budget, he was concerned the money would not be spent where it should be.
He also raised concerns about corruption and under-spending.
UDM MPL Thando Mpulu said the party’s concern was the high wage bill with no concrete plans to reduce it.