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KwaZulu-Natal’s Mid-Term budgets show a provincial fiscus running on empty, with Treasury engagements indicating that we have now entered dangerous and unstable financial territory.

This as the province has utilized its R350million contingency fund to stay afloat, leaving a bank balance of zero in reserve.

Engagement with certain provincial government departments reveals a continued lack of skills, competence and professionalism which is contributing to nepotism, political interference, lack of accountability, mismanagement and corruption. This while politically-motivated senior appointments continue to severely limit capacity and efficacy.

Treasury has also implied that some MEC’s are incorrectly influenced by their CFO’s when it comes to expenditure and budgeting. This is contrary to what Treasury and the Legislature has adopted and points to the apparent protection of officials who will not comply with legislation.

The Mid-Terms also show that there are six KZN departments guilty of under expenditure. The worst of these is the Office of the Premier (OTP) with 39.5% and Human Settlements at 33.4%. In terms of over expenditure, Health and Education, again lead from the front with a collective total of almost R2 billion while other offenders include Public Works, Human Settlements and Agriculture.

During the last parliamentary term KZN’s Legislature adopted a transversal resolution by the finance committee, compelling departments to table monthly cash flow projections linked to expenditure and budgets. It appears that this has not been implemented.

The DA will now insist that this resolution is adhered to. KZN’s portfolio committees need to monitor budgets in real time, not quarterly or through Mid Terms once the horse has already bolted.

Of further concern to the DA is the by-passing of cash blocking by departments who then seek commercial loans and overdrafts to fund operational costs. The Department of Education (DoE) is the prime culprit, having entered into a commercial loan of almost R1 billion to remain financially sustainable. The first red flag is the enormous interest on this loan, which is unbudgeted and will lead to irregular expenditure.

KZN’s fiscal nightmare is the result of an incompetent state. A capable state with political will and an effective civil service would also not have entities that have only collectively spend 37.6% of their budgets at Mid Term. This, while some have even requested additional funds.

The DA welcomes Treasury’s approval of our proposal for zero-based budgeting. Time, needs and demands change, as should budgets. Inflationary increases are failing our province and creating fiscal challenges.

Our province now finds itself at a fiscal crossroad. This ANC-run government can either continue on this dangerous trajectory or it can change the way things are done. However the ANC’s track record proves that nothing will change. Only a change of government will save our province and 2024 provides citizens with that opportunity.

Issued by Francois Rodgers, MPL - DA KZN Spokesperson on Finance