Fiscal discipline needed as Gauteng tables 2020/2021 special adjustment budget due to Covid-19

The Democratic Alliance (DA) in Gauteng notes that the MEC for Finance and e-Government, Nomantu Nkomo-Ralehoko will tomorrow, 23 July 2020 table a special adjustment budget for the 2020/2021 financial year due to Covid-19.

The budget will be tabled during a hybrid sitting of the Gauteng Provincial Legislature (GPL) tomorrow.

In an unprecedented move, a second budget will be tabled because of the Covid-19 pandemic which has necessitated that government provides additional funding to help curb the spread of the Covid-19 virus.

Gauteng’s revenue has declined due to the Covid-19 pandemic and therefore it will become critical to plan for daily cash flow requirements.

The DA is calling on the MEC to ensure that serious consequences are imposed for violations of budget rules including withholding of funds.

Furthermore, the DA is concerned that additional money might be allocated without a detailed plan. Therefore, additional money allocated must be focused on spending priorities, as this will create a balance in cost mitigation and the enforcement of efficiencies. In terms of the local government equitable share each municipality will determine how best to use the funds to respond to local pressures.

Provinces had to reprioritize R20bn from the Provincial Equitable Share to Covid-19 from their own budgets. The main concern with this is that the criteria for reprioritization per province was not clearly determined. Each province has a different disease risk profile.

Local government is impacted more than provincial government when it comes to the reprioritization of funds. Local government conditional grants will decrease by 8.9% from R51.4 billion to R46.8 billion in this special adjustment budget. This at a time when local government’s revenue has severely declined because of an increase in indigents, provision of water and sanitation to informal settlements and homeless shelters.

The reprioritization of some grants will in the long run affect service delivery and result in the deterioration of infrastructure with the potential of escalating costs in the future.

Provincial departments will also need to adjust their business plans in a short space of time to accommodate reprioritized spending.

In order to adequately address the Covid-19 pandemic it will be important to see an increase in funds allocated to the public health system, schools and social welfare services.

Ensuring that the public health system runs smoothly is critical as Gauteng is now the epicentre of the Covid-19 pandemic. In addition, we are also seeing patients from other provinces coming to Gauteng for proper treatment because their own public health system is failing them.

Now more than ever fiscal discipline, accountability and transparency regarding spending is needed.

Furthermore, there needs to be a critical balance of the adjustment budget versus our people going hungry.

There should be value for the money being spent by the departments and they should ensure that no one benefits at the expense of the residents.

For this to be achieved departments should adhere to the National Treasury regulations regarding emergency procurement for the Covid-19 pandemic and emergency Supply Chain Management (SCM) processes.

The DA will be closely monitoring how this new budget is spent to ensure that all the Gauteng Provincial Government (GPG) departments and entities adhere to the regulations put in place by National and Provincial Treasury. In addition, there should be transparency and accountability in order to eliminate corruption and inflating of prices by the suppliers.