Adjustment Estimated Appropriation Bill 2nd Reading Debate

Speech by Dr Ivan Meyer, Minister of Finance

Madam Speaker, thank you for the opportunity to take part in this very important debate.  Madam Speaker this debate takes place shortly after the Auditor-General of SA, Mr Kimi Makwetu released his 2014/15 Audit outcomes. Western Cape got 20 clean audits.

Honourable Speaker, Helen Zille, has shown what good governance does to the people of the Western Cape.  She has also shown that governance and clean audits are not merely technical issues, but that governance is a moral issue.  It is a moral issue because:

1. millions of South Africans go hungry every day,
2. millions of people are unemployed in South Africa, and
3. corruption makes poor people poorer.  

Madam Speaker, it is a moral issue because mismanagement, of public funds, by the ANC Government reduces public confidence.

Madam Speaker, it is a moral issue when the AG reports that R25.7bn is wasted through irregular expenditure by the ANC Government.

Madam Speaker, it is a moral issue, when the ruling party in SA fail millions of South Africans in the provision of basic services, like water, electricity, sanitation and refuse collection.

Madam Speaker, it is a moral issue when people don’t have access to drinking water.  Honourable Speaker the Constitution guarantees basic services in SA, but Madam Speaker, SA knows that Zuma does not care anymore.

Madam Speaker, Economics 101 teaches us to:

1. Managed budgets within clear, credible and predictable limits.
2. Align budgets with medium term strategic priorities.
3. Avoid public spending to run out of control,
4. Maintain fiscal discipline, and
5. Implement expenditure efficiency measures.  

But Honourable Speaker, instead of applying economics 101 principles, the SA Government has formally abanded rational economic theory and fiscal policy principles.  Under President Zuma, SA has just overtaken Nigeria as the most corrupt country on our Continent.  The report just came out.

The SA Government has now formally adopted the principles of Zumanomics 101

1. In Zumanomics, you speak ethics but your practice corruption.
2. In Zumanomics, you speak financial management but you loose R180bn per year on state procurement due to corruption according to the SIU.  Honourable Speaker, I have written to Minister Nene, that we will not take part in centralised procurement.
3. In Zumanomics, you talk expenditure management, but you increase the civil service to over 3m personnel, if you take parastatals into account.
4. In Zumanomics, the Government fails to attract investment due to an Investment Bill that chases investors away from SA.
5. In Zumanomics you grant civil servants wage increases above the inflation rate.
6. In Zumanomics you wipe out your critical cash reserves of R66bn to fund salary increases for civil servants.
7. In Zumanomics you talk green energy, but secretively sign a nuclear deal worth trillions of rands.
8. In Zumanomics you deny there is a problem and you blame poor Jan van Riebeeck for all your own shortcomings.
9. In Zumanomics demand and supply is a colonial, new imperialist concept. That is why the ANC aligned Unions simply just demand more.
10. In Zumanomics, demand and supply theory simply means you demand more.
11. In Zumanomics, expenditure exceeds revenue leaving, a budget deficit of R160bn in 2015/16.
12. In Zumanomics, Madam Speaker, the national gross debt increases from R1.9tn to over R2tn.
13. In Zumanomics, you are told there is no money but you order a R4bn Presidential jet.
14. In Zumanomics the debt to GDP ratio increased to 50% in 2015, if you take into consideration the state guarantees to Eskom, SAA and SANRAL.  

But there is hope after all of this Madam Speaker.

There is hope Madam Speaker, because the more things fall apart under Zumanomics, the more the pieces fall into place, to have a new Government in SA.

Madam Speaker, the AG said last week, voters must vote to end corruption.  Madam Speaker, the debate is no longer about adjusting a budget.  It is about replacing an incompetent Government in the Union Buildings.

Madam Speaker the DA has tabled an alternative adjusted budget to bring immediate relief to the student fees movement, but instead, Madam Speaker, the ANC rejected these proposals because of Zumanomics.

Madam Speaker, in every crisis there is an opportunity.  The more things fall apart, the more pieces fall into place.  There is hope, because change is coming, in SA.

Madam Speaker, the latest audit results, census results, MPAT results, and DPSA, Batho Pele results all confirm that the Western Cape is executing the mandate of the voters.  All the reports confirm the Western Cape is the best run province under the leadership of Helen Zille. Honourable Speaker, this debate is not about the opinions of members of the opposition.  It is about the facts before us.

Let us turn to the facts:

Fact 1: The WC Department of Education the only Education Department in SA received a clean audit in 2014/15 whilst the Education Department in Gauteng had a R1.2bn irregular expenditure.

Fact 2: The WC Department of Human Settlements received a clean audit in 2014/15 FY whilst the Gauteng Department of Human Settlements had a R1.9bn irregular expenditure.

Fact 3: The WC Departments all have good HR controls and systems.  The AG has given us a 100% scoring.  In the National Government the HR Control system only function at 16%.

Madam Speaker, the ANC Government has no fiscal framework and just gave in to the demands of the labour unions.  The labour unions demanded and threatened the SA Government, and the result is a R66bn additions to the public sector wage bill.  This single act wiped out the fiscal reserves over the next 3 years.

Honourable Speaker, Mr Zuma took a calculated risk and agreed to the wage increases, because he desperately needed the Unions to back him with his plans regarding the ANC succession battle.  Well Madam Speaker, it didn’t help him much, because over the past weekend, Cosatu endorsed Mr Ramaphosa to succeed Mr Zuma as President.  For this Mr Zuma, costs the taxpayers R66bn.

Honourable Members, let us debate the real issues facing our nation.  The abuse of taxpayers money to score political points and settle political battles.  Stop engaging in goal displacement.  Let us be honest with South Africans.

Madam Speaker, listening to the debate one thing is clear, the opposition members does not understand the basic principles of an adjustment budget.

The PFM Act specifies the type of spending the adjustment budget may provide for.

An adjusted budget makes provision for:

• The appropriation of funds that have become available to the Province
• Unforeseeable and unavoidable expenditure
• Money to be appropriated for expenditure already announced by the Provincial Minister of Finance during the tabling of the annual budget.
• The shifting of funds between and within votes or to follow the transfer of functions, in terms of section 42 of the PFMA
• The utilisation of savings under a main division of a vote for defraying excess expenditure under another main division of the same vote, in terms of section 43 of the PFMA (virements).
• Roll-overs
• Self-financing expenditure
• Realignment of provincial budgets
• Direct charges against the Provincial revenue fund.

Madam Speaker based on the rules of the Game – this DA Government is playing according to the rules of the Game.  Our books are open, transparent and the adjusted budget reflects sound financial governance.  The opposition is not serious, because if they were serious, there is a tool to show you are serious – you could have tabled an alternative adjusted estimate of expenditure.

In the National Assembly, we the DA tabled an alternative adjusted estimate. We have made concrete proposals.  We have done so, because we care for the future of South Africa.

Madam Speaker, one of our values as a Government is responsive governance.  We are willing to listen and assess an alternative budget.  But Honourable Speaker, I have not received any alternative budget proposals from the opposition. The ANC is either lazy or does not have the capacity to put together and alternative budget. The ANC – has run out of ideas.

Madam Speaker, the DA has submitted an alternative adjustment budget, because we are making ready to govern South Africa from the Union Buildings.  Change is coming in 2016.

Honourable Speaker, this Province has an excellent track record on spending of conditional grants.  Every year we spend 99.9% of our conditional grants, equally we spend 99.9% of all our MIG grants effectively in the Western Cape.

Housing Fund – adjustment Housing Fund is to support the poor.  It is not a loss, Honourable Member, it is a support package to the poor.  The ANC has just spoken against support the poor.

Media Enquiries: 

Daniel Johnson

Media Liaison Officer/Spokesperson to Dr Ivan Meyer Minister of Finance E-mail: daniel.johnson@westerncape.gov.za

Cell: 079 990 4231