Wasteful Expenditure: ANC spends R1.5-billion on itself, not the poor

A year has passed since the Democratic Alliance (DA) first set up a Wasteful Expenditure Monitor to track wasteful and fruitless spending by the ANC administration. To date, ANC Ministers, Deputy Ministers and the departments and entities that report to them, have spent close to R 1.5 billion on unnecessary items such as luxury cars, prolonged stays in five-star hotels, tickets to major sporting events, self-congratulatory advertising, and lavish parties at top-end restaurants. This kind of spending represents a gross misallocation of public funds and brings absolutely no benefits to the South African people.

R 1.5 billion is equivalent to 50% more than the entire housing budget for the Department of Human Settlements in the North West province (R 985.6 million) and 100% more than the School Nutrition Programme budget for the Eastern Cape Department of Education for 2009/10 (R 486.7 million).

The findings in this report update the previous Wasteful Expenditure Monitor report released in April this year when the Monitor stood at just over R 1 billion. The report tracked five key categories of wasteful and fruitless expenditure identified by the DA. These covered a broad range of items from unnecessary advertising and stays in expensive hotels, to new luxury cars, lavish parties and other, miscellaneous waste.

Since then, the DA was uncovered another R 500 million in wasteful government expenditure - enough to fund an Early Child Development Programme for an entire province.

R1.5 billion, channeled fruitfully towards cruicial service delivery programmes could have genuinely benefitted ordinary citizens:

• If these funds had been spent wisely, they could have provided over 1.1 million people affected by HIV/ AIDS with the care they need to stay healthy (it costs approximately R1 300 per year to provide public sector care to a person affected by HIV/AIDS - this does not include ARV treatment).

• R 1.5 billion could have provided bursaries for 50 000 students to pay for the first year of tuition in a B.Com programme at a top South African university.

• R 1.5bn could also have been used to provide electricity connections to over 185 000 low-cost houses across the country (it costs approximately R 7500 to connect a single house to the national grid).

Of the departments, public entities, and public office bearers whose wasteful spending has been detailed on the Wasteful Expenditure Monitor:

• The national department with the highest wasteful expenditure bill was the Department of Public Works which spent approximately R 99 million on upgrades to the residences of public officials when the Zuma administration came into office.

• The most wasteful provincial government was, by  a large margin, the ANC's KwaZulu-Natal Provincial Government, which spent R 120.5 million on a variety of items from unnecessary rental space, to luxury cars and artwork.

• The biggest-spending single state-owned enterprise was the SABC which, despite being in dire financial straits, wasted R 23 million on unnecessary rented space and a propaganda video praising President Jacob Zuma.

• Minister of Defence Lindiwe Sisulu is responsible for the biggest expenditure on cars since the Wasteful Expenditure Monitor's last report in April: approximately R 7 million for a fleet of four Mercedes-Benz E-class cars.

• Entities reporting to Minister of Transport S'bu Ndebele recorded the largest amount spent on World Cup tickets -  R 20 million

• Minister Ndebele was also responsible for the most expensive single item of self-congratulatory advertising at a total cost of R 1.2 million. Each insert include no less than 27 full-colour photographs of the Minister himself.

• Minister of Communications Siphiwe Nyanda was responsible for the biggest spend on unnecessary luxury hotel accommodation, treating himself to prolonged stays at the five-star Mount Nelson Hotel and Twelve Apostles Hotel and Spa in Cape Town at a total cost of R 515 000 to the South African taxpayer.

• Currently-suspended Director-General in the Department of Labour, Jimmy Manyi, was reportedly responsible for the most expensive single departmental party with a total cost of R 350 000

Far from heeding Finance Minister Pravin Gordhan's call to government departments, back in 2009, to be more careful in the way they spend public money and his more recent warnings that government departments refrain from spending lavishly on World Cup tickets, wasteful and fruitless spending by state departments and entities has continued unabated.

This means that less money is available for critical social services that benefit the poor such as primary healthcare, education and housing. In addition many of the municipalities and state-owned entities that spent lavishly on unnecessary luxuries are themselves in dire financial straits, as illustrated by Eskom which, despite its severe budget shortfalls, saw fit to spend R 12 million on World Cup tickets for senior employees and ‘stakeholders'.

Where the DA governs, we will ensure that funds are not spent wastefully on unnecessary items but rather that the allocation of resources reflects our people- centered policy goals.

Note to editors: This press statement accompanies a document presented at a press conference held in Parliament earlier today.

Statement issued by Lindiwe Mazibuko, MP, Democratic Alliance national spokesperson, July 15 2010

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