Treasury write rescue plan as Health Dept overspending threatens to derail KZN budget

2008-11-04 00:00

THE KwaZulu-Natal provincial government is heading for a financial crisis due to massive overspending in the Health Department.

The legislature’s finance committee heard yesterday that Health overspent its budget by R1,2 billion in the 2007/08 financial year and is heading for an overspend of R1,5 billion this year, bringing the total to R2,7 billion.

The situation has led to opposition parties calling on Finance Minister Trevor Manuel to intervene. The IFP and the DA say he can do so in terms of Section 100 of the Constitution.

The KZN Finance portfolio committee heard that other departments are also beginning to overspend on their budgets. The DA’s Johan Krog said they are probably reasoning that “if Health did it and got away with it, why can’t we?”

According to Belinda Scott, the chair of the Finance committee, service delivery is suffering as a result of Health’s overspending.

This had the effect that one department was eating up the money of the province. For example, she said, KZN has the lowest per capita expenditure on school- children in the country. She said the department canot be allowed to create a crisis for everyone else.

“We cannot allow this to happen for a second year in a row. We’ve got to work together to bring about fiscal discipline. It is not as if Health has been deprived of funds. In the last four years the department’s budget went up from R8,7 billion to R15 billion,” Scott added

KZN head of Treasury, Sipho Shabalala, agreed with the committee that KZN has reached the point where it is spending money it does not have and that it has been using up to R1,2 billion on its bank overdraft facility since August this year.

Shabalala said he has gone a bit grey in last three months. He said his department has put together a rescue plan to ensure that Health does not derail other departments. He said the plan is to be put before the ministerial committee shortly.

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