Budget Vote 11: Public Enterprises

|Budget Vote 11: Public Enterprises

Budget Vote 11: Public Enterprises

Address by UDM Deputy Secretary General, Mr Nqabayomzi Kwankwa, MP at Committee Room E249

Chairperson, Honourable Minister and Deputy Minister, Honourable Members,

For many years, South Africa’s economic growth potential has been shackled by a lack of properly planned infrastructure investment. This resulted in immense disparities in the quality of the infrastructure between rural and urban communities.

The poor and rural communities have to make do with inadequate and poor quality infrastructure, which confines them to the margins of economic activity.
Through properly planned infrastructure development and rural development programmes, state-owned enterprises (SOEs) have an important role to play to boost economic growth in order to ensure equal opportunity for all people to participate in our country’s economy.

However, this objective will be difficult to achieve if drastic steps are not taken to improve the capacity of SOEs to spend their allocated budgets. For instance, over the past two years, SOEs have been spending approximately 70 per cent of the funds committed to infrastructure development.
To make matters worse, SOE managers also achieve approximately 70 per cent of their performance agreements.

These factors together with the number of times Government has had to bailout some of the SOEs reveals that SOEs are far less productive than private sector companies.
How does one then justify the high salaries paid to the executives of the SOEs?

The United Democratic Movement (UDM) believes capacity levels at SOEs need to be improved if they (SOEs) are to truly serve as an engine for economic growth and development.

We are also of the view that steps should be taken to ensure that the right people are employed into right positions at our SOEs, with clear and strict performance contracts.

We believe that in large infrastructure development programmes, the Department needs to rope in the private sector to either invest in or play a part in them.

Honourable Minister,

We were too happy to hear that the Department has reduced its vacancy rate from 16.7 per cent in 2009 to 11.9 per cent 2013. However, our celebration was short-lived, when we discovered that the use of consultants features prominently in the plans of the Department for the current financial year.
We believe that filling vacancies should result in lower usage of consultants, and not the opposite.

The UDM supports Budget Vote 11.

I thank you.

2016-10-26T08:39:16+00:00 July 17th, 2014|2014 Archive, Speeches|Comments Off on Budget Vote 11: Public Enterprises