Date: 08/03/2012

Source: The Democratic Alliance

Title: DA: Swart: Address by the spokesperson on appropriations, on the Division of Revenue Bill, in the National Assembly

The Division of Revenue Bill provides for the distribution of nationally raised revenue between the three spheres of government. This year the relevant amounts are R622.43 billion to national government, R309.05 billion to provinces and R37.87 billion to local government.

South Africa needs to create jobs and eradicate poverty. This can only be achieved by a much higher GDP growth rate. Our current growth rate and the growth rate forecast for the MTEF is simply not sufficient for achieving this goal.

In our alternative budget the Democratic Alliance (DA) focuses on ways in which the national budget could be structured to achieve an 8% GDP growth rate on a sustainable basis. Such a growth rate is not only required for job creation and poverty eradication but is also necessary to ensure credibility as a BRICS partner.

We have to work smarter and harder and create a streamlined government. We need to eliminate wastage resulting in the main from inefficient service delivery by a large number of politically well-connected but poorly performing public servants.

In this regard a report by the Public Service Commission found that 1 135 cases of financial misconduct were committed by civil servants during the 2009/2010 financial year, involving an amount of R346million. The financial misconduct was found in 39 national departments and nine provincial departments.

When reflecting on the performance of some state employees, the following two examples illustrate the point of inefficient service delivery:

In the first example, water pipes to the value of some R200 million will have to be replaced at the Nandoni dam project in Limpopo due to the fact that engineers employed by the relevant department specified the installation of glass reinforced instead of steel pipes.

They then failed to do quality tests on the glass reinforced pipes before installation, resulting in the bursting of these pipes when placed under pressure. The pipes are sub-standard and will have to be replaced.

A second example is the way in which private businesses are being disadvantaged by the non-payment of their accounts in respect of goods and services delivered to the state. At the end of February the Department of Health in Gauteng, for instance, owed R2.89 billion to its suppliers, and the amount is increasing. How do we expect suppliers to survive and continue doing business with government under these circumstances?

To ensure a leaner government, the DA’s alternative budget provides for the abolishment of a number of government departments and institutions, such as the Department of Women, Children and People with Disabilities, and the SETAs. In this way, we can create a more streamlined government and free up money to help accelerate growth and tackle poverty.

To achieve the goal of a more streamlined government, the DA’s alternative budget inter alia proposes the abolishment of district municipalities. This would lead to an annual saving of some R500 million. This is a proposal supported by the ANC’s recently released discussion documents.

There are just far too many government departments and institutions, and there is reason to be concerned about the excessively high wage component of government expenditure. A good example of this is the Department of Health in Limpopo, which spends 73 % of its budget on salaries. No wonder they have been placed under administration.

The President in the 2012 State of the Nation Address, and the Honourable Minister of Finance in his Budget Speech this year, quite correctly placed great emphasis on job creation and poverty alleviation by way of infrastructural development.

The question remains, however, whether the three spheres of government have both the ability and/or the capacity to spend the money now allocated to them in the Division of Revenue Bill.

In this regard it is interesting to note that at the end of the third quarter of the 2011/2012 financial year, provinces had in aggregate spent only 61.5% of their combined capital adjusted budgets. Similarly, municipalities underspent by R28.4 billion for the financial period ending 30 June 2011. Of this amount, R12.4 billion was underspent on capital budgets.

Investment is critical if we are to stimulate growth and job creation. The ANC government seems to be intent on shooting itself in the foot in terms of procuring investment for the economy by pushing for legislation such as the Secrecy Bill, tampering with concepts such as willing buyer, willing seller, undermining the independence of the judiciary and generally seeking to tamper with the Constitution. In addition, the ANC’s tripartite alliance partner, COSATU, sees it fit to stage massive strikes costing business and the country billions of rands.

Where then do we find ourselves?

On the one hand we have a budget and a Division of Revenue Bill worthy of support. On the other hand, we face a range of challenges.

But, by tackling government inefficiency, by promoting and protecting the values on which our democracy is built and by improving delivery, we can deliver opportunities and a brighter future for all.