Change management is a laborious and often polarising process. This, however, is an important step towards ensuring that the government of provincial unity (GPU) in KwaZulu-Natal (KZN) operates optimally and ethically, within the confines of legislative prescripts.
Building a capable and ethical state rolls off the tongue, but its implementation is often a different story. Some politicians and administrators love to talk the talk but baulk at the implementation thereof.
Having occupied the seat of KZN MEC for finance for just over a year, I have grappled with the stark reality that provincial finances are not in a good place. There are two major reasons for this.
The first is the constant cuts to our equitable share. These are the result of poor fiscal policy decisions at national level. The continued bailout of SEOs such as Eskom, SAA and Prasa has exacerbated matters. The second reason is that the KZN government was, in the main, neither capable nor ethical.
The province has all but run out of money. As I often say, nobody really cares about money in government, until there is none.
Unfortunately, the most affected public institutions are our frontline departments ― health, education and social development. These departments experience the most spending pressure on salaries.
What I find opportunistic with certain unions and political parties is that this fiscal crisis is now being blamed on the GPU and KZN Treasury. Talk about politicking while Rome is burning.
Compounding this challenge is the inherited historical budget methodology of taking previous years’ departmental expenditure and adding a Consumer Price Index (CPI) percentage point to determine the following year’s budget allocation. This methodology will never resolve fiscal shortfalls in our frontline departments, considering the devastating budget cuts during the fifth and sixth administrations.
What I find opportunistic with certain unions and political parties is that this fiscal crisis is now being blamed on the GPU and KZN Treasury. Talk about politicking while Rome is burning.
Where were these unions and parties when National Treasury cut our equitable share by R60bn? Where were they when, for three consecutive years, the national government failed to fund the negotiated wage increase?
Why did these aggrieved role players not address ghost employees, the inflation of scholar numbers and the continued remuneration of teachers after resigning? This alone led into billions being syphoned off the provincial budget.
Why did these role players not introduce a provincial mechanism to deal with supply chain management gaps as well as reduce the risk of corruption and wastage? Why were critical decisions not taken to cut back so that policy decisions could be fully funded?
It appears convenient for them to now forget that they were part of the former governing party when the rot set in.
The National Treasury has made it clear that there is no silver bullet. The debt to GDP ratio does not allow for further borrowing at national level.
The list of corrective measures that could have been taken during the previous administration is endless. Had corrective measures been implemented, we would not be in this fiscal position. Our frontline departments would not be in the fiscal crisis that they now find themselves in.
On a positive note, KZN’s equitable share allocation is starting to show marginal increases. The National Treasury has instructed provinces to prioritise expenditure on key service delivery objectives, implement cost-containment measures and identify new revenue generation streams.
KZN Treasury implemented this instruction over the past year. It now forms part of a comprehensive fiscal turnaround plan.
My principal aim remains focused on financial stability. This will help us sustain the frontline departments of health, education and social development.
Our financial challenges dictate that protecting these departments must come at the expense of non-frontline departments. This is not easy or popular, but it must happen.
The days of just talking about an ethical state are over. It is now time for implementation. We must do this without fear or favour, for the benefit of the people of KZN.
Francois Rodgers, KZN MEC for finance
For opinion and analysis consideration, email opinions@timeslive.co.za
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