BCM Mayor guilty of Fruitless and Wasteful Expenditure

Jacob Zuma has rightfully received much criticism for calling on CEO's and other executives to freeze their salary increases and not take bonuses, at the same time as he is spending a reported R240mil of taxpayer’s money on upgrades to his private home!

It seems that this hypocritical political attitude is also present in Buffalo City Metro, where the Mayor and three councillors spent R253,844.00 on business class airfare to attend a function in Germany. If you break the cost down, the airfare was R63,461.00 each, more than three times more than the economy class rate of R17,842! An additional R63,000.00 was spent on a week’s hotel accommodation. It is my opinion that the council did not even need to be represented and provided no value to the delegation as the Province, ELIDZ, and the ECDC had already sent people to represent our area. I called on this issue to be investigated by the Fruitless and Wasteful Expenditure Committee in a full sitting of council, however was overruled by the governing party councillors.

Madam Mayor, how can you possibly claim to the citizens of Buffalo City that the council cannot afford to fix our roads, water and electricity networks, if you yourself are spending such large amounts on needless luxuries? I won’t even go into the details of the costs of renting the luxury Mercedes-Benz SUV you are chauffeured around town in. Just because the mayoral handbook makes allowances for these luxuries, it does not mean that it is ethically correct to take full advantage of them.

It is time that politicians in Buffalo City wake up and start tightening their own belts. before they once again claim that we cannot afford to fill potholes or keep the city clean. Service delivery might also be improved if our jet-setting mayor spent more time in her office and not overseas.

Voters remember – you get the government you vote for.

Census results wake-up call for Eastern Cape

The critical state of the Eastern Cape has been highlighted in the Census 2011 results by Statistics South Africa.  The official rate of unemployment for the Eastern Cape is now an alarming 37.4% and the expanded unemployment rate is 51.2%, which is the highest in the country.

This heart rendering figure must be a wake-up call to the Eastern Cape government that it cannot afford to waste one cent on activities that are not geared to improving service delivery and job creation.  

The fact that we have the highest amount of out-migration is a direct result of a lack of opportunities that people have in this province. 

The Eastern Cape recorded the highest net migration of all the provinces namely a loss of 278 000 people since 2001.  The next closest was Limpopo with a loss of 152 000 people. 

Other statistics also indicate the extent of the poor quality of life that people in the Eastern Cape experience.

We have the highest number of households with no access to piped water of 374 000, the highest number of households (295 000) that rely on rivers and streams for their main source of water, the highest number of households – one out of eight - who have no toilets (214 000) and the highest number of households (22 000) that rely on animal dung as an energy source for cooking.  This shows the lack of human dignity that people in the Eastern Cape still experience.

The Eastern Cape needs to be re-engineered.  We can no longer afford a bloated bureaucracy that does not give value for money when it comes to service delivery.   The fact that the Eastern Cape only achieved an average of 51% of its service delivery targets in 2011/12 says it all.

The DA's leader in the Provincial Legislature, Bobby Stevenson, said to that the Party will continue to fight for improved service delivery at all levels of government so that this province can become a place of rising opportunity for all; a place where employment is rising and where people can continue to make the Eastern Cape their home with confidence.  

The people of this province have the power to bring about this change and this power lies in their vote and not in service delivery protests.

Unsecured credit rises by a third

According to the National Credit Regulator (NCR), total outstanding debt owed by consumers to their creditors as at June 2012 was R1.36 trillion. This is made up of money owed by consumers in the form of mortgages, secured credit, credit facilities, unsecured credit, and short-term credit.

Of 19.6 million credit active consumers, 53% were in good standing while 47% had impaired credit records. An impaired credit record refers to consumer accounts that were in arrears by three or more months, accounts that had an adverse listing, or that reflected a judgement or administrative order.

Unsecured credit represents almost 10% of total outstanding consumer credit. It increased by 31.5% from 2011. Both the minister of trade and industry, Rob Davies, and the minister of finance, Pravin Gordhan, have expressed concern over the growth of unsecured credit. Mr Davies said that ‘while unsecured credit comprised different components, some is outright preying on the vulnerability of low-income groups’.  

Government needs to look at more ways to safeguard vulnerable low-income groups from unscrupulous money lenders as the end result can be financially devastating to these already financially stressed low income groups. 

Urgent intervention required from provincial government following the damage and collapse of Eastern Cape roads

Loss of life and infrastructure destruction by flooding, has hit our province hard during the past weeks. Millions of rands in damages were caused to the province’s road infrastructure.

DA representatives in the provincial legislature have written to the Chairperson of Roads & Public Works portfolio committee to request an urgent meeting for the department officials to brief the committee about the short and long term plan to normalize the situation.

DA members of the provincial legislature have also written to Premier Noxolo Kiviet offering the DA’s full support at Provincial and National level to lobby funds for the reconstruction of our devastated roads network. Provincial Leader, Athol Trollip, will also introduce a member’s statement later on this week in Parliament on this matter. Municipalities and the province do not have sufficient resources to fix these roads alone. National intervention is critical.

Our roads network is the lifeblood of our economy and reconstruction needs to begin as a matter of urgency. Our Province’s already high unemployment rate will be affected negatively by this recent disaster. Speed is therefore critical in reconstructing our Province’s roads so our economy does not suffer more damage.

The DA would like to express its condolences to all families and friends who have lost their loved ones during the recent devastating floods. The DA would also like to thank all NGO’s, public representatives, department officials and all other individuals who played a role in assisting our affected citizens.

I hope that politicians will react swiftly like the citizens of our province who assisted each other; so that we are not faced with a situation such as in the past where there were floods a few years ago and we are still to this day waiting for a budget to repair the infrastructure damage that occurred to our roads.

We need leadership now!

LGBTI Policy in SA

I was asked last week about South African LGBTI policy by a Dutch college. This got me thinking - we have constitutional protections for sexual orientation but there is no specific LGBTI policy.

Chapter 2, Section 9 (Bill of Rights) of our Constitution reads: the right to equality before the law and freedom from discrimination. Prohibited grounds of discrimination include race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.

Based on this clause in the constitution, laws have had to made or altered to be sensitive to those rights e.g. two years after the Constitution was passed in 1996 the Constitutional Court ruled that the law which prohibited homosexual conduct between consenting adults in private, violated the Constitution.

In 1998, Parliament passed the Employment Equity Act. The law protects South Africans from unfair labour discrimination on the basis of sexual orientation, among many other categories. In 2000, similar protections were extended to public accommodations and services with the approval of the Promotion of Equality and Prevention of Unfair Discrimination Act.

In December 2005, the Constitutional Court ruled that it was unconstitutional to prevent people of the same gender from marrying when it was permitted to people of opposite gender, and gave the South African Parliament one year to allow same-sex unions. In November 2006, Parliament voted 230:41 for a bill allowing same-sex civil marriage, as well as civil unions for unmarried opposite-sex and same-sex couples. However, civil servants and clergy can refuse to solemnize same-sex unions.

In summary, there is no one specific LGBTI policy as freedom from discrimination and equality before the law is grouped in one large group as listed in the extract from the Constitution above.  Interestingly though, polices relating to others on the list e.g. gender exist, however LGBTI-specific policy has been left in the cold. More than a year ago the Department of Justice set up the (failed) “Gender and Sexual Orientation based Violence Task Team” which was tasked with developing a "legislative intervention plan", this however has never materialised.

This poses an interesting question: should South Africa have a LGBTI-specfic policy, and if so what should it include?

Infrastructure must grow economy, not politicians’ wealth

This is the sixth (and final) post in my series on the DA's Working for Change, Working for Jobs campaign.

A copy of the DA's plan on “Infrastructure for Growth and Jobs” can be downloaded here.

Infrastructure for Growth

South Africa’s ability to grow the economy, create jobs and reduce poverty is constrained by persistent under-investment in infrastructure and the propensity of the ANC government to use infrastructure programmes as an instrument for cronyism and corruption.

Today the DA presents its plan on how to harness the potential of infrastructure to support economic growth and job creation.
Research unequivocally proves that infrastructure matters when a country wants to improve the capacity of its economy to lift people from poverty. A recent World Bank report shows that key infrastructure sectors, including telecoms, electricity, roads and water significantly affect GDP per capita. A recent study by the National Bureau for Economic Research (NBER) found that low and middle income countries that fail to invest in growth-enhancing infrastructure pay a growth penalty.

This is a penalty that the people of South Africa are paying every day.
The World Bank’s 2012 Ease of Doing Business Report, scores South Africa 124th out of 183 countries for ‘getting electricity’ - one of its top ten criteria for measuring the economy’s ability to attract entrepreneurial activity. It is easier to get electricity in Kenya, Mauritius, Botswana and Namibia than in South Africa.

South Africa scores 112th out of 142 economies in the World Economic Forum’s global competitiveness ratings for ‘Internet bandwidth (kb/s/per capita)’; 100th for fixed telephone lines/100 people; and 71st for mobile phone subscriptions/100 people. The quality of our roads ranks 43rd in the world; railroad infrastructure 46th; and port infrastructure 50th.

All this explains why the World Economic Forum identifies “inadequate supply of infrastructure” as one of the top six factors that make it difficult to do business  in South Africa.

During his State of the Nation Address in February, President Zuma placed significant emphasis on infrastructure, announcing a R330 billion infrastructure plan to be driven by the Presidential Infrastructure Coordinating Commission.

But, all too often, infrastructure projects do not end up doing what they are supposed to do. They tend to cost more than they should, take longer than anticipated and sometimes not at all -- usually because of a crony deal that was the driving force behind them in the first place.

As Deputy President Kgalema Motlanthe famously said not so long ago:

"This rot is across the board. It's not confined to any level or any area of the country. Almost every project is conceived because it offers opportunities for certain people to make money. A great deal of the ANC's problems are occasioned by this.”

We continue to see examples of how the ANC as a government uses infrastructure expansion to line the pockets of the ANC as a political party and as a means to secure political support.

• In 2007, Eskom awarded its largest contract ever to Hitachi Power Africa to build boilers at the Medupi and Kusile power stations. Reports at the time suggested that Chancellor House stood to make a profit close to R1 billion from the deal. The project now faces a 20-month and R60 billion overrun, yet no penalty clauses have been invoked to bring the politically connected service provider back in line.
• Tri-partite alliance partner COSATU is estimated to have made a tidy R24 million profit through its investment in a construction company which benefited from the Gauteng Freeway Improvement Project. The entire Gauteng E-tolling project has been mired in controversy, given the exorbitant costs that residents would incur.
• More than R1 billion in public money has been allocated to build a new town just 3.2 km from President Jacob Zuma’s Nkandla homestead in KwaZulu-Natal in what the DA believes to be a very expensive public relations exercise by the President in the run-up to Mangaung.
• In January, National Treasury had to intervene in Provincial Departments of Roads and Transport in both Limpopo and the Free State because irregular supply chain and procurement were found to be draining provincial resources.
• It was reported in March 2010 that Julius Malema, former ANC Youth League leader, received tenders to build several multi-million rand bridges and roads in Limpopo. These bridges were washed away within weeks of their completion due to shoddy construction.
• The Hawks are currently investigating corruption around the construction of the R1.2 billion Mbombela Stadium where there appears to have been involvement by a former municipal manager who has subsequently been dismissed with a R1.5 million golden handshake.

In Brazil, the potential for power abuse in large infrastructure projects is curbed through a model in which the state holds the minority share in state-owned enterprises (SOEs) driving infrastructure expansion. Private shareholders have enough say in the running of the erstwhile SOEs to prevent these entities from becoming vehicles for rent-seeking or patronage politics.

In the Western Cape, the DA government has adopted legislation to prevent officials from doing business with the provincial government. All attempts by the DA to push for similar legislation in other provinces and by the national government have been blocked by the ANC.

The DA has a number of policy proposals which are aimed at promoting private sector involvement in infrastructure expansion, curbing the potential for large-scale corruption related to large-scale projects and ensuring that South Africa’s infrastructure serves the needs of the economy.

These can be summarised as follows:

General proposals

• Increase infrastructure investment to 10% of GDP.
• Conduct a comprehensive review of the current state of South Africa’s independent infrastructure regulators. The review process will (i) clarify their respective roles; (ii) strengthen accountability; (iii) update relevant legislation and regulations; and (iv) make recommendations regarding institutional design reform.
• Begin a process of rationalising South Africa’s portfolio of SOE’s.

Telecommunications infrastructure

• Enter into private-public partnerships (PPPs) to expand and upgrade South Africa’s Information and Communications Technology (ICT) infrastructure, with a specific view to extending the availability, reach, and competitiveness of broadband internet. In the Western Cape, we are co-ordinating broadband roll-out with the private sector and aim to have 70% of government offices and every school in the province connected to broadband by 2014.

Electricity supply

• The DA would decentralise power production by moving Eskom’s current system operator, planning, power procurement, power purchasing and power contracting functions to an independent system and market operator.
• Resolving outstanding distribution problems by ring-fencing the electricity distribution businesses of the 12 largest municipalities, resolve maintenance and refurbishment backlogs and develop a financing plan, with a complimentary programme investing in human capital in the energy sector.
• Developing a long-term coal policy and country investment strategy based on a thorough scientific assessment of South Africa’s coal reserves, the sustainable supply of domestic coal needs to power high rates of economic growth and rapid industrial development, and the sustainable expansion of coal export markets with the intention of gradually reducing carbon intensity in the long-term.

Water infrastructure

• Rehabilitate existing water infrastructure, particularly at a local government level, to curb the current high loss of water in transmission.
• Conduct a feasibility study for large-scale desalination plants to augment the water needs of large cities.

Transport infrastructure

• Initiate a process of renewing the country’s entire freight rail fleet to expand capacity and enhance the efficiency, reliability and competitiveness of transporting goods around the country and to our trading partners abroad.
• Develop an inter-SA business corridor using infrastructure investment to improve commercial connectivity between regions by upgrading the Durban-Gauteng freight corridor, and build a new port at the old Durban International Airport site. This will both stimulate commercial activity within South Africa and enhance our trade profile by better integrating the country’s primary economic hub (Gauteng) with the main port (Durban).
• Increase the transport infrastructure budget: Increase budget allocations to the public transport network to better connect people with opportunities (for example, by extending Rapid Bus Transit systems) and increase spending on upgrading informal settlements.
• Locally, we will expand the MyCiti bus network to link Mitchell’s Plain and Khayelitsha with the city centre by the end of 2013 to reduce car use and reduce carbon emissions in the city.

Infrastructure must be made to work for the economy and job creation, not for the benefit of politicians. We need the right infrastructure in place for roads to bring goods and services to the marketplace, modern and free ports to enable trade, and the power to switch the lights on. We need infrastructure to build a capable state, so that everyone can participate in a dynamic economy. This must be to the benefit of all South Africans, not a politically connected few.