The DP has accused Gauteng MEC Jabu Moleketi of bribery. Charlene Smith writes that he is a great administrator, setting an example for other provinces
While most provincial governments have struggled to manage their budgets, Gauteng has quietly but efficiently managed to cut back debt and increase revenue, in an environment where provinces have virtually zero revenue-generating capacity by law.
And under Gauteng MEC for Finance and Economics MEC Jabu Moleketi, the province has a range of exciting new industrial and business projects on the cards to stimulate new development.
Moleketi is the man at the centre of Gauteng’s sound economic management. A quiet, unassuming politician, a communist with no previous economics background, after his appointment in 1994 he found the time to study economics through London University, and is now pursuing a masters degree.
He has also built around him the finest financial management team – and probably the most racially representative – of any province.
In the past year Gauteng managed to reduce debt to 1,6%, from 2% in 1997, and he says in the financial year ahead Gauteng will balance its books. Only one department – health – experienced serious debt shortfalls, primarily from high drug price increases and ”rank and leg promotions” determined by the Central Bargaining Council.
Moleketi is planning to reduce the Department of Health’s R340-million debt. He says hospital clerks have little interest in collecting fees from patients, so he is investigating outsourcing debt collection.
He is investigating bringing in financial professionals as hospital administrators, rather than relying on medical staff to balance the books and administer institutions.
He is also considering whether Chris Hani Baragwanath hospital – the largest in the southern hemisphere – should be broken up into more manageable divisions. ”It is so big, it is almost impossible to manage as a single entity. It might be more manageable as four medium-sized hospitals.”
Baragwanath has a budget of R300-million. ”If private hospitals can be managed at a profit, I do not see why provinical hospitals cannot operate within budgets,” says Moleketi. ”People must pay for services, but also there has to be a better ethic in collecting fees.”
One of the things Moleketi has done to ensure efficacy is to centralise financial management of all departments under his department. In most other provinces multibillion-rand budgets are handled by officials without basic accounting skills.
The Eastern Cape has followed Moleketi’s example of centralising financial control to cut down on corruption and mismanagement.
Moleketi is negotiating to have the management of wages – which make up 64% of the R16-billion Gauteng budget – removed from the control of the premier’s office and placed under the provincial Department of Economics and Finance.
He points out that 2 000 people in Gauteng have access to Persal, the method used to issue provincial salary cheques. ”We will never eliminate ghost workers unless we dramatically reduce access to that system,” he says.
He has welcomed the Heath commission’s inquiry into the provincial government: ”We must uncover any weaknesses in our system and eradicate them.”
Moleketi says while initial Gauteng provincial budgets introduced a process of adjusting to the new provincial make-up of the region, since 1995/96 Gauteng has been examining how to enhance service delivery.
While the Eastern Cape has battled to pay pensions, and other provinces have periodically had stand-offs with teachers because of the late payment of salaries, Gauteng has experienced no glitches. And it has managed to reduce pupil/teacher ratios and build new schools.
Moleketi has educated departments to plan ahead and have projects ready to roll by May 1, when new budgetary allocations arrive, so they can ensure capital expenditure is not lost to inept planning.
This has seen Gauteng ensure in the past four years that 1,3-million children attend schools. It has renovated 1 296 schools, built 71 new schools, upgraded 96, paid welfare grants to 317 000 beneficiaries, built 28 new clinics, laid down 87km of new road, and resurfaced and maintained 815km of existing roads. It spends double that of any other province on capital expenditure.
Moleketi says the focus is on trying to maintain existing standards, while extending facilities to the previously disadvantaged. But a lack of adequate powers hampers such efforts in all the provinces.
All are overstaffed but lack retrenchment tools, as well as representation at the Central Bargaining Council. The council is responsible for increasing wages for provincial workers, ensuring staff freezes and a deterioration in services as the wage bill swallows delivery capacity in all provinces.
New salaries determined last June by the council, for example, have seen the Gauteng wage bill leap an additional R300-million.
”Management is very difficult if a manager has no control over a huge part of his budget,” says Moleketi. ”An attitude has developed that the civil service is a permanent job, which also leads to underperformance.”
Moleketi, along with other provincial finance MECs and the Financial and Fiscal Commission, is urging the government to give the provinces greater revenue-creation capacity. This would include an income tax surcharge (without increasing existing tax), to allow 85% of provincial expenditure on personnel and 15% on developmental imperatives.
”If that does not happen, children will end up being taught under trees because we will lack the funds to build and improve schools.”
About 92% of Gauteng’s R16-billion revenue base comes from the government. It is only allowed to raise a further 8% in revenue through motor vehicle taxes, gambling and hospital fees.
In September it will introduce a 5% tourism levy. Moleketi says it has been calculated this will raise an additional R40-million a year. The levy will apply to tourist accommodation at resorts, hotels and bed-and- breakfast institutions.
The province has issued its full allotment of six casino licences and is earning R3-million a week from the five casinos that are up and running.
The 9% levy on horse racing earned the province R148-million last year. Moleketi says this levy is unjustifiably high and may be reduced next year.
Most of the revenue – some R450-million – comes from motor vehicle licensing.
Under Moleketi, Gauteng has been meticulous about ensuring that procurement carries a strong empowerment component. At present 30% of its R400-million procurement bill goes to small, medium and micro-enterprises.
”When we took over in this province there were only two school textbook and stationery suppliers. Now there are eight, and all are small, medium and micro-enterprises.”
Moleketi has shown that, despite government shortfalls in funds and policies, there is no reason why provinces have to be run into the ground.
However, competent administrators like him need affirmation from the government in terms of greater powers and revenue-generating capacity – and second terms in office.