Eastern Cape Legislature: Mr Mncedisi Filtane, MPL’s contribution to the budget debate on economic development
1. Having tried to juxtapose the MEC‘s policy speech with his department’s operational plan driven by such a minute budget, I could only conclude that the Eastern Cape government is going nowhere. When you reduce, by as much as 25%, the budget of Treasury, what do you expect to achieve in the sickly fiscal environment?
If the whole province projects a revenue of R6 billion but commits to just R1, 4 billion then psychologically, those tasked during operations with collecting the dream R6bn, will immediately drop their efforts by whopping 80%. Ndokhe ndibone xa kusenzeka umlingo. Poor fiscal management continues to kill our provinces political, social and economic dreams. One suspects that political instability within the ruling party plays a big role in the mismanagement of allocated funds, hence the recurrence of irregular wasteful and non- expenditure of budgets.
2. Treasury should incentivise and reward departments that show great strides in tight fiscal control. Not only had that but even challenge departments in the economic cluster to produce an X number of jobs for every X R3 spent. Treasury should actually have a special internal unit that focuses on two things:
The constant link between departmental expenditure and jobs created and sustained.
Fiscus spent which results in enterprise ownership by Eastern Cape citizens. The fiscus continues to be plundered by the people from outside the province. Our fiscus should be used to create equity for the citizens of this province.
The development of the invoice-tracking mechanism is much appreciated. It cannot be that it is practically impossible to simply put a stop to civil servants who do business with the state. As things stand there are officials who make sure that their invoices are fast tracked for payment? Surely this can be stopped. We implore Treasury to ensure that there is consequence management for those who plunder state resources. The additional powers conferred on the Auditor General should be utilised not only to deter potential thieves but severely punish the devilish beneficiaries.
3. Despite the policy position declared by the National Minister of Finance that tax collection has to be increased, yet in the Eastern Cape the source and base of an increased tax revenue seems to have be given very shy attention. There are no bold steps within the Economic Cluster to increase the tax base.
This assertion is based on the type of projected jobs. Labourers earn low wages; it is the middle and upper class as well as businesses that form a solid tax revenue base. The MEC for Finance in his budget speech puts that emphasis on infrastructure development and agricultural economy. We know the bulk of the infrastructure budget goes to contractors and the goods they procure. Less than 25% goes to professionals. So, we would need to make sure that both the supplies and contractors are locally based in order to drive that budget to local suppliers.
Agriculture we all know that this sector contributes just around 2% to the GDP consequently its contribution to our tax base is understandably low. In order for it to improve its contribution to our tax base, the export market would need to be tapped into in, a big way at that. There you talking billions. Another potential revenue base is by creating, at municipal level, to an environment in which professionals like doctors’ consultants, teachers etc. would feel comfortable to live and work. But alas the conditions are just too atrocious in most of these municipalities. Hence the brain and fiscal emigration to other provinces, where there are better living conditions.
4. Did it occur to the executive of the Eastern Cape that you are sending a very negative message to investors, when you reduce the budget of such a strategic department by whole 25%?
The UDM takes this opportunity to implore the powers that be to review this situation. Add to that the small change allocated to the department of economic development, then potential investors get a clear message of just, how not serious you are on the economy.