EASTERN CAPE HEADING FOR FINANCIAL MELTDOWN
The Eastern Cape Province is projected to over-expend by R3.7 billion at the end of the financial year. This comes on the back of over-expenditure in the last financial year (2009/10) of R2.7 billion. This is going to result in a tragic meltdown of funds available for service delivery.
The goods and services budget will be particularly hard hit. This impacts on the supply of medicine in clinics, blankets and equipment in hospitals, maintenance of schools and other buildings and road maintenance. It means suppliers stand the strong likelihood of not being paid timeiously. This in turn impacts on the viability of businesses and employment. It is a crisis.
The Democratic Alliance is not surprised. During the budget process we queried the figures as we did not believe them. We took the historic step of opposing the budget.
This means that the Province will have had over-expenditure in two financial years of R6.2 billion. The top-slicing of this amount will have a catastrophic impact on future budgets as there is very little likelihood of a bailout from National Treasury. The cost of salaries is going up and up and the money available for actual service delivery is going down and down.
The provincial budget will increase by a little over R2 billion per annum over the next two financial years. When one considers that 79% of the provincial budget received from national government goes towards the provincial salary bill, one can begin to imagine the magnitude of the crisis facing the Eastern Cape. If one includes the conditional grants of R7 billion, the cost of employment is 63%.