Budget is not ‘business unusual’ enough

11 March 2020

The Democratic Alliance (DA) in the Northern Cape welcomes that the tabling of the provincial budget yesterday showed an honest acknowledgement of financial challenges which will make efficient, cost-effective service delivery difficult. We cannot hope to solve the problems of high unemployment rates, especially for the youth, and the socio-economic burdens it imposes on the people of our province if we are not frank about the challenges.

But admitting the extent of fiscal pressures is simply the first step needed for greater growth, job creation, revenue generation, and improved service delivery.

Our provincial economy is very vulnerable to external shocks and it is worrying that the budget does not give the necessary reassurance that provincial government is geared to implement contingency plans. For example, we have already seen how the corona virus has affected the global and national tourism industries. Although the premier and the MEC for Finance have both spoken about benefits of sports and events tourism for the province specifically, no contingencies are presented which can safeguard the provincial tourism industry. Given the increased need to generate own revenue for the province, which was also acknowledged by the MEC for Finance, more must be done to protect economic opportunities.

We cannot afford not to protect our people. Poor financial management in the form of escalating medico-legal claims, overdrafts at sector departments like Health and Education, underspending on funds allocated for housing, and high levels of municipal debt has been an obstacle to service delivery for far too long. We applaud the MEC for agreeing with arguments raised by the DA about wasteful spending by government. Public funds should be used to public benefit, after all. But plans presented by the MEC to improve financial management, curb wasteful expenditure, initiate disciplinary action, and clean up administration is a repetition of past promises about rapid response teams or intergovernmental forums.

With the provincial economy remaining vulnerable to a macroeconomic climate which is showing “business unusual” ranging from historic losses on global stock exchanges to unprecedented oil price wars, provincial government must likewise adopt a “business unusual” approach to keep driving economic growth and to keep delivering services to our people.

Issued by Andrew Louw,DA Northern Cape Provincial Leader, 11 March 2020