Mkhize: Difficult budget amid storm clouds, but money to support the poor

2009-02-26 00:00

As storm clouds gather over the South African economy, KZN Finance MEC Dr Zweli Mkhize presented a carefully crafted budget balancing pro-poor concerns, stricter controls in government spending and an edge of optimism.

Part of the curb on expenditure will involve government departments cutting down on the use of consultants and promotional material. Treasury will also be more hands-on in tracking expenditure within departments.

Describing this budget as one of the most difficult to prepare, Mkhize quoted two poems on storms in his budget speech to describe the mood. He said it is not like “dancing in the rain, but it is really facing the storm”.

According to Mkhize, in the past the amount given to provinces increased yearly. “We had Trevor Manuel acting like Father Christmas. We would put a wish list to him and he would give you more than you asked for. This time the provinces are getting much less.”

He said the amount given to KZN has also dropped because the population of the province has gone down so the budget has been revised. Gauteng, with a growing population, will be getting more.

Within this scenario he said most of the money will go to education, health, employment and infrastructure. “When things come to a crunch the areas you can’t compromise on are education and skills development,” he said.

Nevertheless, the KZN increases by 18,3% overall — from R51 billion in the previous financial year to R60,4 billion.

The education budget will go up from R21 billion to R24 billion, while the Health Department’s budget will increase from R17,8 billion to R22,2 billion.

Opposition parties have been critical of the R1,4 billion overspend in Health. Mkhize said he recognises that part of the problem was beyond the province’s control. He said seven provinical health departments are in the same predicament because of the serious disease burden in the country and the occupational specific allowances that had to be paid.

However, Mkhize said he is disturbed by the trend of budget overruns, and strict measures are being put in place.

He said the KZN Treasury has undertaken groundbreaking research that allows for both the micro-analysis and tracking of expenditure. This has proved useful in identifying areas of over-expenditure, and the model has been adopted by national departments.

“Most over-expenditure occurs in goods and services and personnnel costs.”

The optimism in the MEC’s speech came in his words that, with the 2010 soccer World Cup on the horizon, the KZN journey to prosperity continues to steam ahead and that he tried to provide the right recipe for the province to keep up the momentum.

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