Cronjé tables R83,5 bln budget

2012-03-10 00:00

UNVEILING a roadmap for action, Finance MEC Ina Cronjé yesterday tabled a R83,5 billion budget for KwaZulu-Natal for 2012.

The province will not neglect its social responsibilities while building and maintaining infrastructure along this journey.

While the bulk of the budget will come from the province’s national allocation, the provincial Treasury also managed to save a significant amount of money through its recovery plan.

This is a three-year budget cycle and by 2014/15 the provincial budget is expected to be R95,7 billion. An upbeat Treasury head of department, Simiso Magagula, said he expected to see a KZN budget of more than R100 billion in his lifetime.

While the bulk of infrastructure projects in KZN will be undertaken by state-owned enterprises, the Treasury has set aside more than R13,4 billion for infrastructure development in 2012/13. This figure will rise to R15,5 billion in 2014/15.

Infrastructure development, Cronjé stressed, would be the cornerstone of KZN’s emergence from a pattern of subdued economic growth. The Dube Trade Port in La Mercy will receive R450 million over the next three years. Upgrades to roads in rural nodes like Zululand, southern KZN and the Drakensberg will be completed by the end of this financial year.

About three-quarter of the budget will be spent on education and health.

Following the austerity measures undertaken by the KZN government in recent years, the Treasury will keep aside R1 billion “for rainy days” in each of the next three financial years.

The growth in the province’s own revenue has freed up more than R271 million to be used in 2012/13. The Treasury continued to collect significant interest on the cash surplus it holds.

While the budget was built on solid foundations, Cronjé stressed the importance of remaining agile when it comes to managing its kitty.

Although the province registered modest economic growth and employment gains in recent quarters, Cronjé was mindful of the fragile state of the world and South African economies.

“Our plan must also be flexible enough to allow modification so that we can achieve our goals — like the ‘recalculating’ option on a GPS [global positioning system] that finds a different route to the same destination,” she said.

Taking her cue from Finance Minister Pravin Gordhan, Cronjé challenged other role players to get involved in effectively managing the province’s financial and human resources. She asked government, business and labour to reduce the cost of doing business, cut red tape, raise productivity, diversify exports, tap new markets and enhance regional integration in southern Africa.

She warned that the KZN government’s wage bill was a cause for concern.

Above-average wage increases that were not accompanied by productivity gains posed a significant threat to the fiscal wellbeing of the province, she said.

The bulk of the extra equitable share allocation of R556 million in 2012/13 will go toward the above-average wage settlements.

Cronjé said an extra R128 million had to be set aside in 2012/13 for education personnel.

Magagula said organised labour representatives and the government would have to discuss this issue.

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