Emergency budget addresses causes, not consequences of Covid-19 – DA NCape

Andrew Louw says budget cuts at national level will also affect the province

Emergency budget addresses causes, but not consequences of coronavirus

23 July 2020

Although the emergency budget tabled today discussed financial challenges brought about by the current pandemic quite honestly, the Democratic Alliance (DA) in the Northern Cape remains concerned about the ultimate impact and funding of disaster management strategies.

The pandemic has created an unexpected emergency requiring immediate action from the provincial government and yet there is a deafening lack of detail on the bread-and-butter issues. Jobseekers and those who lost their jobs as a result of the nationwide lockdown, the owners of SMMEs who suffered massive income losses, and the heads of households now relying solely on assistance from social services cannot wait another day or another budget speech before we begin to work on economic and social recovery.

Estimates from the incoming MEC for Finance, Economic Development & Tourism, Abraham Vosloo, indicates that the extended lockdown with its economic shutdown has already resulted in a reduction of 20% on provincial revenue. Budget cuts at national level will also affect the province through significant reductions in equitable share and conditional grant allocations. Considering these constraints, it is indeed remarkable that the Northern Cape Department of Education can now be protected from additional budget cuts.

Yet the additional funding allocated to the departments of Health, Education, and Social Development remain mere decimal points on the budgets required for efficient disaster management in light of the pandemic. The Northern Cape Department of Education, for example, went into the 2020/21 financial year with outstanding debts of R159 million as well as additional budget pressures amounting to R307 million. The amount of R307 million was necessary to deliver essential services, such as the appointment of much-needed teachers or providing extra learner transport, but does not relate to the pandemic itself. Budget pressures related to the pandemic are estimated at an additional R391 million, including the cost of hygiene packs, repairs to vandalized schools, and the appointment of screeners. But the department is getting less than a third of the total budget pressures; in fact, the allocation of R193 million from the Education Infrastructure Grant is less than half of the budget pressures related to the pandemic alone.

Furthermore, funding mechanisms may provide some short-term relief only at the cost of long-term suffering. Reprioritisations to allow for the Northern Cape Department of Health to procure personal protective equipment, ventilators, and other essential medical equipment, for example, are done from the HIV, TB, Malaria, and Community Outreach grant. Although the procurement must be done as soon and as efficiently as possible, it is a concern that cuts to the conditional grant may hold significant long-term consequences for the provincial health. Not only does the province already have high defaulting rates, but early research also shows that mortality rates from the coronavirus are two to three times higher in individuals who are HIV-positive or who suffer from tuberculosis.

It is clear that financial mismanagement of the past has compromised government’s ability to fund an efficient disaster management strategy. At this time of crisis, the first charge against the Provincial Revenue Fund will be the loss of R550 million incurred in unauthorized expenditure in past financial years. Funds that could have supported the poorest of the poor at this time of crisis and money that could have strengthened our provincial response to the coronavirus is forever lost to us.

It remains to be seen if the province can actually afford efficient disaster management. But we know that the people of the province cannot afford any inefficiencies, which may cost us lives and livelihoods.

Issued by Andrew Louw, DA Northern Cape Provincial Leader, 23 July 2020