Service delivery does not match spending, plans are not implemented and debt keeps increasing, OUTA tells Parliament’s finance committees. OUTA asks Parliament to set up a fiscal policy committee to focus on a more robust policy.
Waste not, want not, OUTA told Parliament today.
OUTA told the Standing and Select Committees on Finance that its core concern about the budget is the lack of impact from the spending and concern over where the money goes.
OUTA has made a submission to Parliament on the recent Medium-Term Budget Policy Statement (MTBPS). On 4 November, Matt Johnston, OUTA’s Parliamentary Engagement Manager, made a verbal submission to a joint sitting of the committees.
This is OUTA’s first submission on MTBPS 2020, and a second will be submitted to the appropriations committees. OUTA regards this MTBPS as the most important moment in South Africa’s fiscal history, given the financial situation.
Revenue predictions are significantly down, but OUTA’s submission points out that if less money was wasted and stolen, South Africa would be able to get by despite the decreasing pool of tax revenue.
Furthermore, the politicisation of budgets and all levels of government results in budgets serving political agendas rather than the public interest.
“We spend significant amounts of money, but we don’t really see increases in productivity: that’s the core problem,” Johnston told the committees.
“What we see instead is an increased wage bill that is completely disconnected from the quality of service delivery, we see permanent corruption and maladministration without any significant consequences, and we see ad hoc solutions for SOEs and their financial situation that have obviously not alleviated the situation.”
Johnston said the national debt continues to increase, there are concerns whether the tax revenue is sustainable, and promised plans such as prioritising infrastructure spending are not implemented.
“The current situation demands robust fiscal policy,” he said.
OUTA thus proposes the establishment of a committee which focuses on inclusive fiscal policy, tasked to develop a fiscal policy paper promoting private sector growth and focusing on more productive categories of spending.
Johnston also said that OUTA wants to see greater transparency and greater efficiency in spending, and supports the proposed zero-based budgeting policy which will assess spending on each programme.
OUTA does not support bailouts, particularly the new R10.5bn bailout to SAA, and called for the wage bill to be addressed. “The wage bill is unaffordable despite capped growth over the medium term,” said Johnston.
OUTA agrees with the prioritisation of capital spending, particularly on infrastructure, but while this is consistently promised it is seldom delivered and there is insufficient value for money.
OUTA recommends the establishment of a presidential task team to address the collapse of the rail system.
OUTA also wants to see sufficient funding for the National Prosecuting Authority and SARS. “OUTA would like to see stringent action against perpetrators of tax evasion and fraud. Better mechanisms and teams within SARS are needed to detect and tackle transgressors, as was the case in the past. An investment in such task teams will pay for itself many times over,” said Johnston.
