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The Financial and Fiscal Commission (FFC) warned that the spending cuts foreseen in the Medium-Term Budget Policy Statement (MTBPS) of the Minister of Finance, Tito Mboweni, could have a direct and lasting impact on the provision of services in the country .
In a presentation to Parliament’s Finance and Appropriations Committees this week, CTF Vice President Michael Sachs described the cuts as “tearful.”
Sachs said the commission is concerned about projected declines in basic education, agriculture, defense and social security funding in the next financial year (2021/22) and, more importantly, how these declines will affect service delivery. .
The responsibility of these departments is to tell parliament how they will absorb these cuts, how they will address these cuts, or what will be lost in terms of service delivery, he said.
While some departments, like Basic Education, will not see any budget increases in 2021, other departments like the Department of the Interior will see budget cuts of up to 13.4%.
The table below, displayed by the FFC in its filing, describes how the cuts will affect various departments over the next year.
Municipalities in trouble
The FFC said that many municipalities continue to suffer serious problems, facing spiraling debt, huge income gaps, unfunded budgets, poor audit results, and the Covid-19 pandemic exacerbates the situation.
“Against the previous situation, the MTBPS is proposing some important adjustments to the fiscal framework of the local government, adjustments that will have lasting effects on the provision of services, the growth program driven by the government infrastructure and the general recovery plan” , said.
The FFC said that continued cuts to municipalities will also have an impact on basic water and electricity supplies.
“The commission takes note of the proposed allocations and the downward revision of the previously announced allocations, and remains concerned about the effect of these reductions on service provision, given the increase in water and electricity costs and the decrease in the collection of own income ”, he said.
The commission also warned that the cuts may run counter to the government’s infrastructure growth strategy.
“Repeated benchmark cuts will have a negative effect on service delivery, infrastructure investment, repairs and maintenance, and go against the government’s objective of infrastructure-driven growth and the targets outlined in the recovery plan. economic, ”he said.
The FFC said the government-planned District Development Model (DDM), which is intended to improve service delivery by solving perennial planning and coordination challenges, also requires adequate resources.
“However, MTBPS is silent on how the DDM will be resourced. For this initiative to be effective and catalyze local economic development and support the economic recovery plan, it is important that the government provides clarity on its operational modalities and provides the initiative with the necessary resources, ”he said.
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