Scott rejects budget criticism
KZN’S Finance MEC Belinda Scott rejected accusations from opposition parties that the provincial government “didn’t care about infrastructure” – a key strategy to boost economic growth and jobs.
Scott was unpacking her budget speech at an Absa-sponsored breakfast in Durban on Monday.
She decried the “doom and gloom” from the opposition about the KZN budget, saying the renewed “vigour and optimism” she felt about South Africa needed to be “given out” more.
She said she and the KZN leadership were striving to improve on last year’s 1.3% national economic growth, this year’s projected 1.5% and the 1.8% for 2019, which she said represented the renewed business and investor confidence in the country.
She also rejected accusations that the government did not care about the poor. “It might not be all bad news – or good news – but it’s a good budget,” she said.
The budget of R122bn was R7bn up from last year, she said, despite cuts that had to be made, in the “easiest and less painful” way, due to the prevailing harsh economic conditions.
Responding to the criticisms she received even before she got up to present the budget last week, as she put it, Scott rejected reports that claimed KZN’S budget was in the red.
“The KZN budget is still in the black. We’re not in overdraft. I have my bank manager here; he can tell you that,” she said pointing at Absa’s provincial head, Faisal Mkhize.
Mkhize, complimented the MEC for the continued prioritisation of health and education despite budget cuts necessitated by current low economic growth in the province and country.
He reassured the provincial government that Absa would continue maintaining the “historical commitment” it had with the province.
Its “change of journey” and new strategy following its recent divorce from Uk-based Barclays Plc would re-energise the bank and make it more relevant to KZN, South Africa and the continent, he said.
Expanding on infrastructure and other cuts, Scott admitted that the National Treasury had indeed “topsliced” about R1.3bn from the KZN budget, but said only about R300m of that was from the equitable share portion and the rest was from conditional grant funding.
The reduction in infrastructure spending actually amounted to only R890 000. She rejected the criticism that the KZN government “didn’t care about infrastructure”, saying “we still have a budget of R12.2bn for infrastructure”, which would help create “many, many” jobs.
The “fair cut” had to be made and cuts were made nationally because of the R50bn shortfall in revenue collection nationally and the need to reduce national debt to keep the World Bank and the IMF at bay.
Turning to the other “elephant in the room”, the MEC said the government had a tough choice to make. “In the past three years the corporate sector had taken quite a large knock when it comes to tax increases.
“And there’s only an extent to which you can tax the people who actually pay the revenue.
“And that was the decision, that we can no longer tax businesses out of business, and the higher income bracket out of being employable and that the more equitable solution was a 1% VAT increase. It does not mean that we do not care about the poor.”
She admitted there were challenges in the health department and the education department
– the other big one experiencing “spending pressures” – but said no intervention was needed there.
A “lot of cleaning up” had to be done besides having to deal with cuts, she said.
Government departments had to work collectively instead of in silos, she said. They had to look at “what is important to spend money on” to ensure service delivery.
“And if that means taking money from one department to deal with a service delivery crisis in another we are going to do that. And we’re going to take collective responsibility for any programmes that we believe should close down – maybe just momentarily – until such time as we’ve got a really smooth, efficientrunning budget that does not impact on service delivery.”
She emphasised that KZN has, at least for the past two years, had a good budget spend, having spent 99.7% of it in the 2016/17 financial year with the 0.3% having come back through roll-overs.