By Simon Nare
Wasteful expenditure, corruption and inefficiency are some of the contributors to budget constraints and the country sinking deeper into debt. South Africa’s economic growth has averaged below 1% in the last decade.
MPs serving in Parliament’s financial cluster lambasted how recklessly the government was spending money, while failing to keep tabs on how it was being spent. This placed additional pressure on the Treasury to raise money for the deficit.
They were briefing the media during Parliament’s weekly update on Monday.
Standing Committee on Public Accounts chairperson Songezo Zibi said Parliament could not discuss the Budget while ignoring the fact that the government misused money through bad policies, maladministration and corruption.
Zibi said the country was borrowing too much while spending inefficiently or allowing money to be stolen.
He said government debt was R1.79 trillion in 2014/15 financial year, and R5.26 trillion in 2023/24. During this period real gross domestic product per person fell from R80,046 to R74,599, underscoring how economic stagnation intensified pressure on households and the broader economy.
“We lose billions to water losses, which means lost revenue. According to National Treasury expenditure reviews, weak revenue management, a failure to bill consumers, low payment levels and ineffective debt collection undermine the financial sustainability of the water services sector.
“The shortfall, which averaged around 30% of total costs per cubic metre, is unsustainable, as it is too large to be covered by the equitable share grant. Should non-revenue water be reduced to 25% through repairs, maintenance and the refurbishment of infrastructure, the four municipalities in the study (reviews) could realise an additional R800 million per year,” he said.
Standing Committee on Appropriations chairperson Mmusi Maimane said told reporters there were two areas of expenditure the state had to confront. They were the salary bill, which was about 38 cents for every rand the state made, and social grants expenditure.
“We need to say to ourselves how do we enhance efficiency? And this speaks particularly to municipalities. We have all read with harrowing effects how the municipalities are returning money back [due to] wasteful and fruitless expenditure,” he said.
Maimane said the government needed to urgently decide what to do with municipalities that were struggling to raise money.
He said they had informed Parliamentary committees that they could only raise 60% of their expenditure.
This shortfall had to be funded one way or another.
“We are at the peak of taxation, I would argue and therefore we have to think hard about A, cutting expenditure focus on prioritised growth infrastructure and ensuring that our state is much more efficient,” he said.
Maimane said that when Finance Minister Enoch Godongwana tabled the Budget on Wednesday it should be noted that it was just a proposal, and Parliament had a duty to process it.
He urged ordinary South Africans to test the democratic process as Parliament would be debating the Budget before it was signed by President Cyril Ramaphosa.
It was important that ordinary South Africans, civil society and unions made their voices heard on the Budget, Maimane said.
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