KwaZulu-Natal turns around its finances

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Copy of nm budget 2 Independent Newspapers.

Durban - The KwaZulu-Natal Treasury was “in the red” facing a budget deficit of R2 billion and huge debt financing costs when Finance MEC Ina Cronje took over the portfolio in 2009.

But yesterday Cronje delivered her third consecutive provincial budget showing a healthy financial position.

Cronje and her team are credited with turning around the books during her five-year term. It was her last budget speech in the current administration.

With the elections ahead, she said the province had a “good story to tell” now boasting a “cash positive” position and contingency reserves of more than R700 million.

She tabled a record R96.9bn 2014/15 provincial budget and said next year’s budget would top the R100bn mark for the first time. Over the next three years KwaZulu-Natal would have more than R2.3 billion in its reserve.

Cronje, who had taken over the department from Zweli Mkhize, said the Treasury had managed to turn around its position in the face of the worst global economic downturn in decades.

She said it was achieved through “tough cost-cutting measures” which started in 2009 and was extended over the years.

In 2009 she announced that goods and services budgets of all departments would be cut by 7.5 percent over three years.

Asked about leading the turnaround, Cronje refused to take all the credit, saying it was a “combined effort” which had to be supported by all departments and heads to be achieved.

In this year’s budget, education and health, as usual, got the lion’s share with education claiming 40.8 percent at R39.4bn, and health at R30.9bn.

The department of transport had recieved the third biggest allocation with just over R9bn.

While the Durban and Pietermaritzburg chambers of business largely welcomed this year’s KwaZulu-Natal budget, it received mixed reaction from opposition parties.

The DA accused the provincial government of failing to deal with fruitless and wasteful expenditure, saying the cost-cutting measures were not enough and needed to be better monitored.

“Cronje is not able to command the bigger political force away from wasteful expenditure towards real investment in the future,” said DA member of the legislature Johann Krog.

T

he IFP’s Lionel Mtshali commended Cronje for “getting the province back in the black” and building strong contingency reserves.

“The province has continued to budget for a contingency reserve. Apart from that KZN has taken a lead in introducing good governance measures which we often referred to as cost cutting measures.” - The Mercury



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