More money, more problems for govt?

This is despite the increase of Southern African Customs Union (SACU) receipts to E7 billion for the 2012/2013 financial year.

The revenue of E2.8 billion that was realised in the first quarter of the year was easily overridden by the debts, which grew by 5.4 per cent from the past year.

For two years now government has struggled to honour all its financial obligations, such as the payment of salaries and local and domestic debts, because so little revenue has been generated. Government’s obligations far outweigh its income.

Sizakele Dlamini, acting Principal Secretary (PS) in the Ministry of Finance, said government is running at a cash deficit which started in the first quarter of the year.

The first instalment of E1.7 billion from the Southern African Customs Union (SACU) two months ago did not help much.

"You will recall that the 2012 budget speech gave the responsibility to pay arrears. At the beginning of the first quarter, the ministry projected revenues at E2.8 billion including the E1.7 billion from SACU.

"Government spending on the other hand was projected at E2.6 billion. Important to note, though, is that actual spending for the quarter surpassed the E2.8 billion revenues," explained Dlamini.

She said this was attributed to debt repayments as well as accrued spending from the previous financial year.

Asked how much had been paid towards the clearing of arrears so far, she said only E300 million.

"Outstanding public debt consists of both external and domestic debt. It therefore shows an increase of 5.4 per cent, that is, from E4.2 billion as recorded in the previous year to E4.4 billion by the end of March 2012.

The increase was mainly attributed to the continued issuance of government Treasury Bills during the period under review," she stated. One of the biggest financial drains for government over the years, as was pointed out by the International Monetary Fund (IMF), is the high wage bill.

With a workforce of around 37 000, government parts with approximately E350 million per month in salaries alone. Not much improvement has been noted despite efforts in trying to reduce it.

Early this month, the Ministry of Public Service revealed that the wage bill had gone down by only 1.8 per cent owing to retirements and the non-replacement in posts.

The Enhanced Voluntary Early Retirement Scheme (EVERS) remains the much anticipated key to making a huge impact in as far reducing the wage bill is concerned. However, the poor cash flow has delayed its start.

Well when more money can't help, then you must know something must be horribly wrong. What surprises some of commoners is that government's spending pattern and its taste for living large hasn't changed one bit in the face of such financial dire straits. I mean the guys still fly first class, they still want to honour every invitation to honour festivities of other wealthier nations, they still want to have large entourages and delegations including reporters to have live coverage of inconsequential events at huge cost. Where is the common sense here? Well, like they say money does not grow on trees, let's use what we have very sparingly and stop funding Tinkhundla campaigns under the guise of development.
June 25, 2012, 1:00 PM, Burns Dlamini (Lobhoncela) (Burnspolitics@gmail.com)

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