Speech by Adriana Randall MPL, DA Gauteng Shadow MEC for Finance
This speech was delivered in the Gauteng Provincial Legislature during the debate on the 2018/19 Gauteng Treasury budget.
Gauteng Provincial Treasury holds the province’s purse and must realize how powerful this purse is in a stagnant economy, where greater accountability, transparency and value for money is critical.
In-migration and cuts to the Provincial Equitable Share and conditional grants continues to place more pressure on the department to ensure effective performance with limited resources (fiscal consolidation vs increasing demand for quality public services).
The total appropriated amount for vote 14 for the 2018/19 FY amounts to R796 413 000.00.
The interest revenue budget is set conservatively given that increased spending in the province would reduce cash balances and result in lower interest earned.
The DA welcomes this target, as we have always argued that it was more important to increase spending on infrastructure and other projects that will improve service delivery to the residents of the province, versus interest earned on cash balances in the bank.
We further note that the department’s structural reconfiguration has seen the surrender of unutilized budgets for vacant posts and suspension of funds to e-Government during the adjustment budget process.
Compensation of employees is up from R460 million in 2017/18 to R590 million in 2018/19. This is an increase of R130 million at a time when stabilizing the wage bill is critical. As such, a biometrics system must be implemented to monitor staff.
Nothing has been said about the Capacity Building and Training Plan or if it was approved in the previous financial year. Work on this plan was supposed to start in the 2nd quarter of 2017/18 financial year.
Gauteng Infrastructure Financing Agency (GIFA) receives an increased allocation of R58.5 million that is aimed at ensuring a sustainable pipeline of strategic infrastructure projects which are envisaged to be catalysts for socio-economic development in the province.
One of these projects is the long awaited Kopanong Precinct Project. The conclusion of this project is envisaged in this financial year, but I would not hold my breath.
GIFA continues to disappoint in terms of progress on projects and are we still awaiting the two investor roadshows that were supposed to have already taken place.
The other question that comes to mind is, when will economic researchers be appointed to assist with SEIA reports, as no reports were produced in the previous financial year.
In 2017/18, only one feasibility project/study was completed.
With a 40% spend of procurement on registered Gauteng Township suppliers, priority should be given to the completion of several logistic-hub projects as these hubs will assist township entrepreneurs in transporting their goods to and from markets and potential customers.
Specific attention should be placed on improving spend in the Western and Southern corridors.
According to the Auditor General (AG), municipal instability continues to be an issue. Vacancies point towards a serious skills gap and this contributes towards a lack of accountability.
We welcome the amendment of the Public Audit Act, as it will provide the AG with power to refer material irregularities to appropriate authorities to investigate and include a level of remedial power including recovery of money lost because of irregularities.
Illegal VBS Bank Investments, unpaid Eskom and Rand Water bills by municipalities in our province has had, and continues to have severe consequences and impacts negatively on service delivery.
Urgent consideration must be given to innovative infrastructure funding such as municipal bonds, municipal pooled financing, municipal project financing, PPP’s, SPV’s and tax incremental financing.
As far as Gauteng Audit Services is concerned, there is still a lot of work to do to improve effective internal controls. One of the key priorities now is to implement an Internal Audit Plan.
There is no report on how GPT intends to strengthen internal controls and systems to avoid the recurrence of irregular expenditure. The department must deal decisively with fraud and corruption, if not it will continue to be the gift that keeps on giving to a select few in government.
The Premier spoke about the New Dawn, where the following will be achieved = cost benefits on all megaprojects, development of revenue incentive schemes, the ring-fencing of critical service-funds for all departments and municipalities, stabilization of the wage bill, reduced accruals as disclosed in the Annual Financial Statements and effective fraud detection systems.
Only time will tell if this will happen or if it will continue to be business as usual.