The real FS State of the Province shows impact of ANC's failures and inept leadership
15 February 2016
Note to Editors: The following remarks were made by the Leader of the Official Opposition in the Free State Provincial Legislature, Roy Jankielsohn MPL, at a media briefing at the Free State Provincial Legislature on the state of the province.
The impact of successive ANC administrations, especially under Ace Magashule’s premiership, shows that the governing party’s policies and performance in government, are having a negative impact on the socio-economic circumstances of the people of the Free State.
The DA is sad to say that poverty, inequality and unemployment in the province continue to plague our people, while they at the same time have to contend with the ANC governments’ inability to deliver quality basic services at provincial and municipal level.
The real State of the Province
The STATS SA General Household Survey (GHS) released in May 2015 paints a dismal picture. Out of 833 000 households in the Free State, only 533 000 cited salaries as a main source of income and only 99 000 cited that income is generated through a business venture. About 201 000 households cited social grants as the only source of income while an additional 300 000 households have to supplement their salaried income with social grants.
A shocking 13 000 households in the province have no source of income at all. This is extremely worrying and the DA will do what it can to ensure that these people apply for social assistance.
In plain terms, these statistics indicate that the majority of the people of the Free State are struggling to make ends meet.
The unemployment rate as per the Third Quarter 2015 is at 37.7% (expanded definition). This means that out of a total possible workforce population of 1,872 million, only 795 000 people are employed. As the economy continues to move into a recession, with the Free State’s GDP growth expected to be at a mere 0.3%, more jobs are expected to be lost.
The mining sector is plagued by low commodity prices and are struggling to keep shafts open while the agricultural sector has taken severe strain under the worst drought in decades. Analysts expect that the mining sector will retrench about 120 000 jobs this year alone. It is expected that the agricultural sector will follow suit as low harvests are expected, while the cost of production continues to increase. These retrenchments would affect the Free State severely, the economic prospects under the current climate does not bode well.
As our economy heads towards a probable recession, the people of the Free State would undoubtedly like to see decisive leadership from the Premier, and action by government, to improve their lives considerably. The time for rhetoric is over.
The people of the Free State deserve an honest overview of the real state of the province so that they may best prepare for what is to come.
Government has a responsibility to limit the impact of the current economic decline by taking an honest look at how its policies and programmes may have contributed to this negative economic outlook and to bring the changes necessary to turn the situation around.
The DA expects Premier Ace Magashule to focus on the following five key areas to limit the impact of the current negative economic outlook on the lives of all our people:
1. Free State economic growth and job creation
Late last year Finance MEC Elzabe Rockman announced that the expected economic growth for the Free State is estimated to be at 0.3%. Considering the current national economic outlook of 1.5% it is expected that the province will move into recession this year.
Shortly after the 2014 general elections, the ANC-led government introduced the Small Business Department. Almost two years since, this component of government’s initiative to promote entrepreneurship has had a limited impact.
As mentioned earlier, only 12% of households in the province registered an income coming from a business venture. More resources should be channelled to encourage entrepreneurship through the establishment of business centres that would provide assistance to entrepreneurs, specifically with regards to skills development in financial and administrative management.
The DA has been constant in calling on Premier Magashule to implement a ‘Free State First’ approach in the province. Sadly, it remains standard practise for the ANC-led government to award contracts and tenders to companies and individuals from outside the province. This trend must stop. Additional weighting must be extended to Free State registered and owned companies. Furthermore, some politically connected companies and individuals continue to maintain a monopoly over many of the most lucrative contracts.
In addition, government departments and local municipalities fail to pay service providers within the 30 day period as legislated for. Sub-contractors continue to suffer as a result of non-payment by government or the main contractors. This has a negative impact on the cash-flow of small businesses and these struggle to continue functioning as a going concern.
If the Premier fails to adopt this approach the Small Business initiative, it will fail, and as more Free State companies are forced to close down, unemployment will skyrocket further.
2. Clean up government’s financial mismanagement
The ANC-led government continues to misapply financial resources.
Late last year the provincial salary wage bill recorded a R748 million shortfall while an adjustment of only R238 million was made available to address this. The DA has long maintained that the provincial salary wage bill is extremely bloated. The total salary wage budget for the current financial year is R17,5 billion.
This is a massive drain on the province’s finances. Should this trend continue the Free State will reach a point where the salary wage bill would literally suck the province dry, leaving very little money for service delivery. Premier Magashule should announce an initiative where all job placements within his administration will be verified and that politically independent performance appraisals are implemented as standard practise. While there are many civil servants who remain dedicated to serving the people, many are mere political appointments as a result of cadre deployment, and have no impact on improved service delivery, these individuals should leave the employment of government.
The Provincial Departments of Health and Education remain in extreme financial distress.
Under Health MEC Benny Malakoane, people’s lives are put in danger due to the administrative and financial mismanagement of this department. The GHS shows that almost 2,246 million people in the Free State do not subscribe to a medical aid scheme, leaving them completely dependent on public health. Hospitals and clinics remain under resourced in both equipment and medical professional personnel. Medicine shortages is a regular occurrence while emergency medical services remain under resourced. This is a situation where avoidable deaths become common cause.
It appears that Education MEC Tate Makgoe does not have the political will to bring his department’s finances under control. Last year the department incurred R600 million in unauthorised expenditure, while it failed to pay teachers’ salaries and school subsidies on time. This negatively affects the ability of schools to maintain an environment that is conducive towards learning which denies our children the education they need in order to become successful and prosperous individuals.
The Department of Social Development is also struggling to pay subsidies to affiliated NGOs. This has a negative impact on the ability of social assistance programmes to bring relief to the most vulnerable in our society. In fact, as we speak, several NGOs face closure as a result on the department’s inability to pay subsidies. Several NGOs have brought urgent interdicts for the payment of subsidies against MEC for Social Development, Sisi Ntombela, and her department, some of which the department has not complied with. These NGOs are now looking to take the department to the Constitutional Court. This just shows again that when government fails, it is the poor and the most vulnerable that suffers most.
Premier Ace Magashule should announce his administration’s commitment to bringing the provincial finances under control and to support the most vulnerable people in our province.
3. Infrastructure development and the improvement of service delivery
More than 26 towns in the Free State have been left without clean, safe and uninterrupted water supply for several years now. The DA has for more than three years requested government to allocate resources and to recruit much needed skills to improve the management of the province’s water infrastructure, to no avail.
Only two municipalities in the Free State, the Mangaung Metropolitan Municipality and the Metsimaholo Local Municipality, obtained Blue Drop Status. However, this is being disputed since the National Department of Water Affairs has not released the final report as yet. A Blue Drop Status means that the water quality meets the minimum standards with respect to quality, monitoring, testing and is guaranteed safe for Human consumption.
All of the remaining Free State municipalities’ piped water supply does not meet the minimum standards of compliance and experience extended periods where no monitoring and/or testing takes place. As a result the safety and cleanliness of the piped water in these municipalities is extremely questionable. This carries the risk of the spread of disease and an urgent intervention is needed to avoid and outbreak.
Last year R230 million was allocated to the province to eradicate the bucket system. More than 220 000 people in the province do not have access to suitable sanitation and 7.7% of the population are forced to make use of bucket toilets. It is unacceptable that 22 years into democracy this is still the case. The bucket toilet system continues to rob our people of their dignity.
There are 97 708 VIP toilets, 56 902 Pit Latrines and 35 889 bucket toilets in use in the Free State. Free State municipalities identified a total of 116 667 bucket toilets to be eradicated over the last 6 years, it is unfortunate that they could not even reach 50% of that target. Over the last 6 years the ANC government could only eradicate a meagre 55 960 bucket toilets. COGTA MEC Olly Mlamleli has confirmed that her department has not awarded a single contract for the eradication of bucket toilets since 2009. In fact, MEC Mlamleli is on record stating that waterborne sanitation systems is not a desirable option to many rural communities in Qwa-Qwa and other areas.
Unfortunately, not a single municipality in the Free State obtained a Green Drop Status. All 114 sewage plants in the province are in non-compliance. As a result, environmental degradation is rampant, the pollution of fresh water resources is common occurrence and communities are exposed to waterborne diseases.
A sound roads infrastructure is key to our rural economy and our labour intensive agricultural sector. The DA again calls on an audit must be conducted to assess the situation of roads in the province and clear strategies and timeframes must be given for the rehabilitation and maintenance of roads. All possible resources should be accessed from national government for investment in roads.
4. Assist and intervene in failing municipalities
Many municipalities across the Free State are struggling to deliver on their constitutional mandates and are riddled with corruption, financial mismanagement, and incompetence.
Not a single municipality in the province obtained a clean audit outcome for the 2013/14 financial year. Nine municipalities received disclaimer opinions, six qualified with findings and 14 unqualified with findings. We can expect a deterioration in the municipal audit outcomes for the 2014/15 financial year later this year when the Auditor-General releases the consolidated report.
Eight municipalities are under threat by ESKOM to have electricity supply suspended for non-payment of bulk electricity supply. The collective total amount in payments demanded by ESKOM stands at just short of a billion rand totalling just over R842 million.
The ability of municipalities to supply water, electricity, and maintain and develop infrastructure are crucial elements to economic growth. Most municipalities have departments of “Local Economic Development” that merely pay salaries to cadres and contribute nothing towards the creation of economic environments that are conducive to investment and job creation.
The DA expects Premier Magashule to announce provincial interventions into Free State municipalities in order to prevent the total collapse of local government.
5. Fight corruption
During a time where the Free State suffers such economic decline, Premier Magashule opted to purchase luxury German sedans for traditional leaders and the provincial government this year. One would expect financial resources are applied to the improvement of service delivery to the people rather than funding the luxurious lifestyles of ANC fat cats.
The list of financial mismanagement in the Free State is so long it is almost impossible to identify the true extent of this scourge. Drastic cost cutting measures must be adopted by the provincial government. There is no justification for the purchase of new official luxury vehicles, expensive international trips and other luxuries. Since 2009, Ace Magashule’s ANC-led government spent more than R325 million on catering and entertainment alone while 181 000 Free State Households cited that they struggle to obtain food. Hunger and malnutrition in the province is real, especially amongst children and the elderly.
The people’s money must be used to benefit the people. A smaller and more effective administration will make more resources available for the delivery of services and infrastructure.
Premier Ace Magashule’s government has failed to comply for years now with National Treasury’s notices that first class travel, expensive luxury vehicles and massive international travel delegations are no longer allowed. In fact, last year when the DA criticised Premier Magashule for his 75 person delegation to Cuba costing the taxpayers R14 million for a two week holiday, he affirmed that this trip will take place annually. Premier Magashule must tell us that he will no longer indulge in such wasteful expenditures. Magashule’s 45 Cuban engineers recruited during his trips are lazing around in guest houses since May 2015 and have not done a stitch of work.
Corruption continues to steal from the poor.
If the Free State Provincial Government were really committed to eradicate fraud and corruption within their ranks, Premier Magashule would have dismissed Health MEC Benny Malakoane and Arts and Culture MEC Mathabo Leeto who are both before court defending numerous fraud and corruption charges stemming from their Matjhabeng deployment days.
MEC Rockman herself, as well as Premier Ace Magashule, are both embroiled in the irregular and illegal Letlaka Communications scandal that continues to cost this province millions annually at the expense of the people. All the while they both continue to deny any wrong doing at every turn despite the fact that two successive national finance ministers have found the entire arrangement to be illegal and have suggested criminal investigations
The DA would like to see the provincial government save money by taking a zero tolerance approach to corruption. That means going forward there must be consequences for officials who have been found to be implicated in corrupt and fraudulent practises. They must be dismissed and prosecuted and not redeployed. Premier Magashule can start setting the example by dismissing his compromised MECs.
Conclusion
The DA in the legislature is committed to the people of the Free State and will support any measures that will improve the lives and livelihoods of our people. Despite our recommendations to the ANC-led government under Premier Ace Magashule, we have little hope that he would consider implementing these.
The ANC does not have the political will or the policies to take the people through the impending financial and economic crisis facing the province. The DA however, has exactly the remedy to this crisis, as can be seen in the Western Cape where the DA is in government.
Unemployment in the Western Cape is lowest in the country at 23.1% (expanded definition).
The DA government continues to excel at financial management. Last year the Auditor-General, Kimi Makwetu, acknowledged that the DA-led Western Cape government continues to excel in sound financial management, constantly improving on its audit outcomes while improving service delivery. It obtained twenty completely clean audits while the Free State, under the ANC, managed only six. Irregular expenditure in the Western Cape totalled a meagre R79 million, while in the Free State, irregular expenditure totals R1,5 billion.
Where the DA governs we improve people’s lives. We have a credible track record. The DA calls on all the people of the Free State to vote DA in this year’s municipal elections, so that we can start bringing positive change to the lives of our people.
Issued by the DA Free State, 15 February 2016
