The Eastern Cape government is struggling to strike a balance between the cost of staff and actual service delivery with the ratio, as a percentage, standing at an astonishing 63/37.
Finance MEC Oscar Mabuyane made the revelation as he tabled his mid-term budget statement in Bhisho on Thursday.
Mabuyane said the R30bn wage bill shortfall, as announced by finance minister Tito Mboweni, meant that ambitious projects in the Eastern Cape would have to be shelved.
“We must now find money from our reserves to accommodate a share of the R30bn shortfall,” Mabuyane said.
“National Treasury has said this is our baby, therefore we must carry it on our backs.
“This is going to put further pressure on our fiscus and it also means we must shelve some of our ambitious plans.”
Mabuyane said his department had not yet identified which mega projects would have to be delayed. In October, Mboweni announced that the national and provincial government departments would have to shoulder an unscheduled R30.2bn wage bill caused by above-inflation salary increases for civil servants.
Mabuyane said striking a balance between the cost of employees and service delivery was in the interest of the province with respect to economic development.
“This matter is an albatross on service delivery and, more importantly, economic development,” he said.
Speaking in the Eastern Cape Legislature, Mabuyane said the province was further faced with losing R5.9bn over the next three financial years as a result of people leaving in pursuit of greener pastures.
He said, however, that discussions were under way to have the equitable share formula – which relies heavily on the number of people who leave a province – reviewed.
“At a national level we are robustly advocating for the review of the equitable share formula, which relies heavily on the outward migration of people from one province to another in the allocation of resources,” he said.
“We are of the view that this formula should be changed as it has a stranglehold on service delivery in rural provinces such as ours.”
He admitted that there were areas where money meant for service delivery had not been spent, while in others, money had been spent but there was nothing of value to show for it.
Other highlights in the midterm budget were:
● R104m to education to build hostels;
● R281m for service providers that have completed work;
● R126m to the department of transport;
● R20m for farmers affected by the drought;
● R50m to the Eastern Cape Development Corporation;
● R325m for the supply of medicines, food and implants; and
● R2.8m for the coronation of King Ndlovuyezwe Ndamase and King Zanozuko Sigcau.
Mabuyane said his department would be cutting back on catering, overnight travel and accommodation as well as subsistence allowances, wherever possible.
“We are not going to hire for the sake of hiring.
“And if you don’t need to have food, we will cut back on that,” he said.
“And if someone doesn’t need to spend the night and someone has to travel to Joburg, you don’t have to spend the night.”
DA MPL Bobby Stevenson said while the province was on a slippery slope of bad governance, he welcomed the allocations to the health and education departments.
“If you want people to stay in this province, you need to fix the education system, you need to fix the roads and make sure that there is a regular supply of electricity and water.
“There is basic infrastructure that you need as a province and if you don’t create it, you have a problem,” he said.