DURBAN - Kwazulu-Natal will continue to experience fiscal pressure over the next few years as a result of Eskom’s R69bn, three-year cash bailout and other factors, including the continued migration of people from the province.
Finance MEC Belinda Scott gave the hard-hitting appraisal when she tabled the provincial budget yesterday, saying that all government departments had been affected by cost-cutting measures in an attempt to ensure that service delivery continued.
Scott said the province had learnt to do a lot more with a lot less as it entered the seventh straight year of fiscal consolidation.
“Fiscal consolidation has meant that R32bn that should have come to this province has been top-sliced off the budget over the past seven years.
“These are difficult times for this province as this is the seventh consecutive medium-term framework where we are losing money, yet our responsibilities to our people have not diminished,” she said.
Scott said they had to find a way to effect the cuts without slashing departments’ budgets and impacting on service delivery spending.
“These questions were the focal point of a number of ministers’ committees on the budget, budget council, and provincial executive council discussions in the lead-up to budget day. Solutions are harder to find considering that we have had to find ways to deal with these cuts for many years.
She said they had been cognisant that budgets needed to be cut, but that it had to be done with the least impact on the citizens of this province.
“According to an African proverb, ‘The poorest man in this world is not the one without money, but the one without people.’
“Some of those cuts are based on the population census. We have had two population census assessments during the last seven years and KZN’s population numbers are decreasing.
“As a result they (National Treasury) cut our equitable share.”
Scott said two years ago all provinces, together with the National Treasury, had to contribute towards the #FeesMustFall budget allocation.
“There are some looming pressures on government as a whole and (the biggest) is definitely Eskom. How is that going to be managed? It is going to be very important going forward to see how the power utility is going to be managed. It is going to definitely have a significant impact on South Africa’s economy.”
Finance Minister Tito Mboweni, during his maiden Budget last month, announced that the cash-strapped power utility would get R69bn over the next three years, but under strict conditions.
“The billions are not a loss - they have just been top-sliced before we get into the next financial year - but if you have a look at the medium-term expenditure year on year, you don’t see a decline. There’s an increase because of inflation, but at the same time we have taken on more tasks,” Scott said.
She said the weaker rand had affected the Department of Health in particular, especially with the cost of machinery and medicines.
“Whenever the rand falls, my heart falls because that is a department that is already under pressure.”
The DA’s Finance spokesperson, Francois Rodgers, said the province was heading for the “red” as more than R500m was raided from the province’s contingency and cash reserves in order to bail out various departments.
“To compound the issue, both KZN’s Health and Public Works departments are looking at a projected over- expenditure of R357m and R207m respectively.
“This could completely wipe out the contingency reserve, placing the province in a deficit,” said Rodgers.
Scott, who is expected to serve out her current term ahead of the May 8 elections before leaving office, reflected on her past 25 years in the provincial government.
“It is people like me who have to walk the talk in terms of standing aside to let the younger people come through. I am very positive about that.
“Whatever happens going forward, the ANC government will never place Treasury in harm’s way. That I promise you,” she said.
Scott said the party had had three or four terms in office to prove that, saying the KZN Treasury is the best operated department in the country.