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Gauteng Treasury Must Stand With Minister Gordhan To Protect The Fiscus

Finance Minister Pravin Gordhan and National Treasury

The DA urges Gauteng Finance MEC, Barbara Creecy, to join the call made by our colleagues in the Western Cape by asking Minister Gordhan to convene a Budget Council Meeting without delay.

The DA is extremely concerned by the public attacks on Finance Minister Pravin Gordhan and National Treasury over the past couple of weeks by President Zuma and his cronies, and the latest attempt to strip National Treasury of its decision making and financial control powers – which will ultimately strip National Treasury of its power to control procurement processes.

It seems that the ANC believes that Treasury is too powerful, and has so much control that it can defy even the presidency when it comes to funding dubious projects and bail-outs.

One of the key changes appears to be for Treasury’s chief procurement officer, Kenneth Brown, to report directly to the president, and not the finance minister.

National Development Plan

President Zuma is actively trying to reign in Minister Gordhan and get rid of him in order to capture National Treasury, and expand his network of patronage and tenderpreneurship, which has underpinned his presidency.

The DA firmly believes that any perceived attack on Minister Gordhan and National Treasury will bring about an extreme loss of confidence in our capacity to deliver on the goals of the National Development Plan, and on our objective to grow the economy and create decent employment opportunities.

We cannot sit back and watch the National Treasury being systematically attacked, its authority eroded and our fiscal sustainability undermined.

It has become urgent to discuss the fiscal and economic implications of the crisis facing Treasury. It will impact the fiscus of the National Government, all provinces and municipalities.

Economy to be Downgraded

Provincial budgets are being squeezed by austerity brought on by financial mismanagement.

The impact on frontline service delivery will be hard to avoid if we allow the economy to be downgraded, or fall into a recession that takes us over the fiscal cliff.

We need to do the responsible thing and show a united front against attacks on Treasury.

The time has come for all finance MECs in all nine provinces to stand together and support and protect the integrity of National Treasury during this time of crisis, and ensure that the people are put before the needs of crony capitalists.

 

Media Enquiries:

Adriana Randall MPL

DA Gauteng Shadow MEC on Finance

060 556 4342

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SPEECH BY MR FRED NEL, MPL ON WORKER’S DAY, DELIVERED IN THE GAUTENG PROVINCIAL LEGISLATURE ON THURSDAY, 26 APRIL 2016

South Africa’s Economic Growth Rate Too Low to Create Jobs

Workers’ Day started as a commemoration of the struggles that workers had to overcome during their campaigns to improve working conditions. These struggles often ended in bloodshed and death of workers as they demanded better treatment. It is often also associated with the trade union movement that organised workers and fought for their rights since the late 1800’s.

Unions started out to improve the working conditions of workers especially those who worked in dirty and unsafe factories. It also started to bargain on behalf of workers for a fair wage and later started entering politics.

Although the initial purpose that brought about labour unions was noble, one could argue that unions have morphed into organisations reaching beyond its core function in society.

However, we cannot talk about Workers’ day in South Africa without looking at employment. It is difficult to celebrate this day when a quarter of our population do not have employment opportunities available to them. In fact, this number is growing more working South Africans are joining the ranks of the unemployed.

A clear indication of this is the drop in labour union membership in the country. We have seen in the last year that large unions like NUM and SAMWU reported major drops in membership figures. This cannot be attributed to increased competition among labour unions alone, but is mainly associated with job losses.

These losses are a direct consequence of a lack of economic growth in South Africa. According to Mineweb/ Bloomberg:

“Even without labour upheaval, the growth prospects in Africa’s most industrialised economy are looking dire. The National Treasury expects the economy to expand less than 1% this year, undermining efforts to cut a 25% unemployment rate, while the nation’s credit rating is on the brink of being downgraded to junk. The risk of political turmoil is also rising…

NUM has also been weakened by the firing of tens of thousands of its members in response to the commodity price slump. The mining industry employed 462,000 people in the final quarter of last year, 5.9% less than in the same period the year before, and down from a peak of more than 800,000 in the 1980s, according to the national statistics agency. Mining production fell for a sixth straight month in February, contracting an annual 8.7%, the agency’s data shows.”

In short, South Africa’s economic growth rate is too low to create jobs, in fact jobs are being cut as a result of this low growth.

However, this situation can be turned around. The DA launched its vision for South Africa in 2015 known as Vision 2029. As part of this plan the DA recently launched its five point job creation plan that aims to generate employment through the following focus areas.

  • Invest in integrated energy, transport and ICT infrastructure for job creation;
  • Give more people the education and skills they need to get a job;
  • Radically reform the labour regime to support job creation;
  • Provide direct incentives for job creation; and,
  • Create a nation of entrepreneurs by making it easier for South Africans to start and grow their own small businesses.

There is no freedom in poverty. There is no fairness in being kept poor. There are no opportunities for the poor.

We need to turn this around by establishing a society where individuals and business are free to access and participate in the economy instead of being restricted by unnecessary government regulation and red tape.

We must promote fair labour practices but not draconian labour laws. We need to provide proper education and training in order to provide equal access to employment opportunities for South Africans.

If we do this we can employ the 25% unemployed South Africans. Moreover, we could in future truly celebrate workers day rather than ignoring unemployment issues.

 

Media enquiries:

Fred Nel MPL

DA Gauteng MEC on Cooperative Governance, Traditional Affairs and Human Settlements

083 263 2427

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SPEECH BY MRS ADRIANNA RANDALL, MPL ON WEAK FINANCIAL CONTROLS OPENING THE DOORS WIDE TO CORRUPTION, DELIVERED IN THE GAUTENG PROVINCIAL LEGISLATURE ON TUESDAY, 10 NOVEMBER 2015

Speaker,

The procurement and Supply Chain Management (SCM) environment is the most susceptible to misconduct in any organisation. The temptation to misrepresentation and favouritism is great because of the importance to suppliers to gain government contracts.

It is important that a high level of integrity and awareness be maintained in the procurement environment. The Code of Conduct for the Public Sector provides direction to employees with regard to their relationship with all other role players.

A total of 59% of South African respondents to the PricewaterhouseCoopers (PwC) Global Economic Crime Survey indicated that they had experienced procurement fraud, compared with the global figure of 29 per cent.

In South Africa, vendor selection was the most targeted.

The monitoring of suppliers should form the basis of Contract Management activities where certain aspects should be monitored and reported on.

These reporting elements include but are not confined to the following:

  1. A database of contracts awarded, and conclusion of Service Level Agreements
  2. Monitoring of the supplier according to the stipulations of the SLA,
  3. Documenting any deviation or non-performance by the supplier,
  4. It is further also recommended that at the completion stage of each project, an assessment of the supplier/service provider (including consultants where applicable) be undertaken and that this assessment be available for future reference i.e. Close out Report with final payment made to the supplier; and
  5. A review of the relationship with suppliers and the improvements needed to enhance efficiencies across the supply chain.

The DA noted with concern the underspending on programme 4 of the department of Finance’s 4th quarter report for the 2014/15 financial year dated 14 May 2015.

The reason for underspending was due to the budget originally set aside for the vendor rotation solution under Procurement Services, as it had not been implemented by the end of the fourth quarter. It is not clear why it was not implemented or whether the budget had been spent. We have raised this question and were told that answers would be forthcoming by 31 July 2015. We have to date not received any explanation on why this system had not been implemented.

Speaker, the rotation of vendors ensures the spread of orders for similar products and amounts amongst several qualified suppliers. Rotation ensures better prices and better services in the form of delivery or warranty. It assists in the fight against wasteful expenditure as highlighted in Minister Nene’s budget Speech earlier this year.

It also refers to the socio-economic obligation of this government in terms of the Premier’s TMR pillars. Adherence to the five pillars of procurement particularly value for money – which is defined as the best available outcome when all relevant costs and benefits over the acquisition period is considered. This is often ignored, despite all the good initiatives for e.g. the e-invoicing system to improve payment to suppliers.

Heads of departments needs to be held accountable for implementing and managing a proper rotation system in their departments thereby offering opportunities to a wider range of properly qualified suppliers. Heads of Departments must also be held accountable for the submission of vendor’s names onto the restricted suppliers list.

Various National Treasury circulars were issued in the past to explain the verification procedures pertaining to the database of restricted suppliers to accounting officers.

The Gauteng Department of Infrastructure Development (DID), while maintaining an internal record of blacklisted contractors, does not share this information with National Treasury, in turn placing the entire Gauteng Provincial Government (GPG) at risk.

DID, responsible for crucial infrastructure projects across the province is often the target of fly-by-night contractors who, aided by poor internal controls and vetting processes, contribute heavily to this departments notoriously bloated expenditure and delayed projects.  In a written reply from DID MEC Nandi Mayathula-Khoza, it was established that the department is taking steps to blacklist defaulting contractors.

While this is a much needed and welcomed step, the MEC has indicated this information – as required by treasury regulations, is not shared with National Treasury. Ultimately, another GPG department, unaware of the unscrupulous nature of a contractor who has been blacklisted by DID will be caught unaware as this information will not appear on the National Treasury’s blacklist.

Speaker, this places the limited public purse under immense threat, not only from wasteful expenditure, but it also short changes Gauteng residents of crucial government services, whilst excluding legitimate contractors from entering the market. Just look at how many projects meant to assist the poor fail because of the misappropriation of funds.

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Mandela Children’s Hospital Opens Next Year, But No Agreement Yet With Government

The Nelson Mandela Children’s Hospital is due to open in the second quarter of next year, but its relationship with government departments has yet to be determined.

According to a written reply by Gauteng Health MEC Qedani Mahlangu to my questions in the Gauteng Legislature, “the nature of the governance model of the hospital has to be agreed between the Nelson Mandela Children’s hospital trust, the Gauteng Department of Health, Gauteng Provincial Treasury, National Treasury and the National Department if Health”.

Mahlangu says that “the NMCH will focus on provision of tertiary services at levels T2 and T3. The hospital will therefore not be taking in walk-in patients but patients will be referred from Gauteng state hospitals, other hospitals nationally and from the SADC region.”

It is worrying that details have still not been settled between government departments and this 200-bed hospital which is being built with R1 billion privately raised money.

The National Health Department has pledged to provide core operations costs of the hospital and staff from Gauteng hospitals will also interact closely with it.

I hope that the hospital is not slowed down by government incompetence as it is being built in record time – two years as opposed to eight years for hospitals built by the Gauteng Health Department.

Government needs to finalise its relationship with the hospital so that it can open smoothly next year to receive its first child patients.

 

Media enquiries:

Jack Bloom MPL

DA Gauteng Shadow MEC for Health

082 333 4222

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