Durban – KWAZULU-NATAL’S provincial compensation budget will be cut by R5.3 billion, leading to wage cuts for government workers, a move that has garnered mixed reaction from political parties.
The austerity measure to cut the provincial compensation budget by R5.3bn was highlighted during a National Treasury briefing on the Division of Revenue Second Amendment Bill to the finance portfolio committee of the provincial legislature on Friday.
According to the National Treasury presentation, the net reduction of the provincial budget cut translated to a figure of R3.8bn after a R1.42bn boost from the presidential employment initiative and R103.5 million in food relief. The cut forms part of the National Treasury’s net reduction in spending of R17.8bn across the provinces.
ANC member of the provincial legislature Sipho Nkosi said the committee understood that the country’s financial situation was “terrible”.
“We will have to be very careful how we spend our budget. We will have to make sure we spend every cent wisely and go back to what we experienced in 2009 when the province was going through financial difficulties and had to make sure every cent counted,” Nkosi said.
“We need to come up with austerity measures and cut the frills and spend the money where it matters, which is service delivery to the people. We understand there are challenges but we will make sure we compel the government to stick to spending where it matters most,” he said.
DA spokesperson on finance Francois Rodgers said the party welcomed the cuts, which would result in no salary increases over the next few years, in line with the government’s plan to cut spending.
“In layman’s language, this relates to no salary increases over the next four years, while KZN will have to cut even more posts to meet these budgets,” he said.
“For some time now we have bemoaned the bloated bureaucracy within our province – one which has certainly not morphed into a capable and ethical state,” he said.
He said the ANC had used “state employment for patronage and cadre deployment” and had created “a monster”. “The big question that remains is whether the ANC’s alliance partners buy into these drastic measures. Currently unions are deadlocked in the courts on this matter.
“If the alliance partners do not reach consensus, the state will have to borrow more money to fund this compensation,” he said.
He added that KZN was also facing a reduction in critical provincial conditional grants in order to fund the R10.5bn SAA bailout.
“The disastrous legacy of SAA and its poor management and endemic corruption is not only reserved for the provincial fiscus. KZN’s embattled and cash-strapped municipalities will also face reductions to their grants in order to fund the bailout,” he said.
IFP president Velenkosini Hlabisa said the cut was “very unfortunate” and would affect departments severely.
He said it was “odd” that the government kept on bailing out SAA yet continually reduced municipal finances.
“It is going to affect service delivery severely because almost all municipalities will not be able to collect as much as they had initially budgeted due to Covid-19, and the reduction by the government will worsen the situation,” he said.
EFF KZN chairperson Vusumuzi Khoza said the party did not believe there should be cuts in workers’ wages in areas like education and social development.
“The human resources structure of the province is top-heavy. There are too many bosses on top earning a whole lot of money, and there is not a lot money distributed to lower-paid jobs, and service delivery is negatively affected,” Khoza said.
The Mercury