IFP, ANC back 2012 revenue bill

2012-04-23 00:00

THE ANC and the Inkatha Freedom Party in KZN have supported the 2012 Division of Revenue Bill, which will see the province receive a total of R82,230 billion for the 2012/13 financial year.

However, the Democratic Alliance did not support the bill when it was debated in the provincial legislature on Friday.

The party felt that the province could get more money if departments handled their finances more competently.

The DA’s Johann Krog said his party did not support the bill as a matter of principle.

KZN was lagging in terms of the amount of money it could get, as a direct result of “massive incompetency within provincial government structures”.

Krog said it was “glaringly obvious” that Treasury’s reluctance to part with funding was due to ongoing underperformance.

This had not only affected the province’s equitable share, but it had also seriously undermined the effectiveness of conditional grants, many of which have had to be returned unspent by KZN government departments, said Krog.

But ANC MPL Maggie Govender noted that KZN received the highest equitable share allocation from the national fiscus.

The debate was a result of the Constitution, which requires that every year a Division of Revenue Act determines the equitable division of nationally raised revenue between national government, the nine provinces and 278 municipalities. The equitable share apportioned to a province is based on a formula and is adjusted taking into account various considerations.

Dr Lionel Mtshali noted that the one issue that could upset the allocation for the province by the Division of Revenue Bill was the upcoming 2012 wage agreement.

“We are currently budgeting for a mere five percent wage increase. This figure will be the test of the government’s resolve to stand up to organised labour as we strive to consolidate our public finances in the long run.”

Mtshali said that if the increases negotiated by the government and organised labour later this year exceeded the five percent provision, the province was likely to eat into its budgeted surplus or worse, incur another cumulative overdraft.

“The stakes are high and we on the opposition benches hope the government will rise up to the challenge,” Mtshali said.

He noted that the national fiscus continued to short-change KZN in compensation for the effects of natural disasters in the province.

“This funding reaches the province late and in smaller volumes than was expended for this purpose by various service delivery departments, most notably transport,” Mtshali added.

Govender noted that the 2012 bill had been tweaked to allow for greater oversight over spending.

She said the changes included specific anti-corruption measures with respect to infrastructure conditional grants. This placed additional responsibilities on heads of provincial departments and included:

•The submission of approved organograms;

•Maintaining up-to-date contract databases and compliance with the Register of Projects and the “i-Tender” system;

•Reporting on infrastructure expenditure through the project and asset segment in the standard chart of accounts.

Mtshali said oversight on conditional grants was also strengthened in last year’s Division of Revenue Act. He said upcoming budget close-out hearings on the provincial budget would show if the oversight tools have led to improved spending of conditional grants in KZN.

• nalini@witness.co.za

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