Durban - The people of Kwa-Zulu-Natal must brace for cuts of more than R1 billion in the province’s budget in the year ahead, Premier Senzo Mchunu warned on Thursday.
But he promised plans would be made to preserve service delivery and called for “hope”.
“KwaZulu-Natal is due for cuts totalling over R1bn in the first year of medium-term expenditure framework.
“For us as the executive council, this meant holding several meetings and at times strenuous negotiations on these directives to cut, in order to find solutions that will not negatively impact on service delivery,” Mchunu said.
He made the statement when he tabled his State of the Province Address at the Royal Showgrounds in Pietermaritzburg.
While Mchunu did not explicitly say where the cuts would be felt, he said the anticipated reductions would further squeeze the departments driving economic development, which needed more funding for job-creation initiatives.
“This calls for teamwork among ourselves in the leadership, among officials in various departments and between government and our stakeholders.
“Our message to the people of KwaZulu-Natal today is that we must be full of hope and use this opportunity to gather strength physically and mentally to propel ourselves further with much vigour, and we can.”
The premier said Wednesday’s national Budget clearly indicated the domestic economy was under severe pressure as a result of subdued global economic performance.
“The emerging consensus is that unless we reduce public spending, we will have trouble on many fronts.”
Mchunu said government revenue streams had been hard hit, making substantial budget cuts unavoidable.
“This will obviously have a significant impact on our ability as a province to achieve our growth targets, which were set in 2011 on an assumption of an annual growth rate of 5%.”
But he remained confident the KZN government would deliver on its commitments because his administration had structures and systems in place.
The premier said the citizen satisfaction survey, conducted by Stats SA last year, showed what KZN citizens regarded as the priorities that his administration should attend to.
“At the top of this list is the need for increased employment opportunities, followed closely by a need for accelerated housing delivery.
“A third clear priority is pointing to the need to attend to matters related to crime and corruption and to bolster actions aimed at curbing social ills related to substance abuse and violence against women and children.”
He also said the survey indicated the province’s citizens were happy with the level of health and education services.
“There is, however, an expectation that the quality of these services are to improve,” Mchunu said.
He said regulations on the establishment of special economic zones were now in place for the Dube Trade Port and Richards Bay Industrial Development Zones.
“The significance of this step cannot be underestimated as this finally provides opportunities for large national and international investors to pursue the very favourable incentives to promote in particular our export capabilities.”
On other initiatives to boost the economy and create jobs, Mchunu said a provincial association of traders would be established to handle bulk-buying and warehousing for co-operatives and small businesses.
“We have identified buildings that are owned by Ithala across the province to be used as warehouses. This is to create direct access to suppliers and reduce costs of goods.”
There were also plans to roll out free wi-fi internet in Durban, Richards Bay, Pietermaritzburg, Port Shepstone and Newcastle.
KZN’s total budget allocation from National Treasury for the 2015/16 financial year was R99.135bn.
The provincial budget will be delivered on March 10.