SA borrowing too much, spending inefficiently and losing money to corruption – Scopa chair

The government must save money by eliminating maladministration and corruption, standing committee on public accounts (Scopa) chair Songezo Zibi says.

Parliament’s chairs of the finance cluster committees briefed the media on Monday ahead of the budget speech, which will be delivered on Wednesday.

This comes amid disagreements among political parties on the VAT (value added tax) increase, which saw the postponement of the speech last month.

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The withdrawal of USAid funding for some programmes adds to the country’s challenges as it means the government must find money to close the gap left by US President Donald Trump’s executive order.

“The finance minister must find a solution that parliament can support. That solution will cost tens of billions of rands over the medium term, and we cannot claim to be surprised when we must do this,” said Zibi.

‘Money lost to corruption’

However, Zibi said the government must first learn to manage the money it already has.

“We are borrowing too much while spending inefficiently or allowing money to be stolen. Government debt was R1.79 trillion in 2014-15. In the last financial year, 2023-24, it was R5.26 trillion,” said Zibi.

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“We cannot discuss the budget while totally ignoring the fact that the government misuses money through bad policy, wastes it through maladministration and loses it entirely through corruption.”

“Government’s inefficiency and poor decisions cost billions of rands and we do nothing about it because there is a bad attitude towards government expenditure.”

Money is also lost in the water services sector, which means lost revenue.

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“Weak revenue management, a failure to bill consumers, low payment levels and ineffective debt collection undermine the financial sustainability of the water services sector.”

Government’s rental expenses

He further highlighted the government’s rental expenses, which “cost too much”.

Out of 29 000 buildings in the public works department’s asset register nationwide, the department has started a process to recover approximately 1 260 properties flagged as being illegally occupied under Operation Bring Back.

Last year, Public Works Minister Dean Macpherson announced he would commission an independent report into the purchase of the former Telkom headquarters building, acquired in 2016 for R696 million and later renovated for R250 million.

The building has been vacant for the past eight years.

The department of home affairs also spent R343.9 million to lease 214 buildings from private owners in the 2023-24 financial year.

“The government property portfolio costs too much in terms of rental expenses. In 2016-17, provincial governments collectively leased 1.2 million square metres of office accommodation at an average cost of R120 per m2 per month – at a total cost of R151 million per month or R1.8 billion per year,” said Zibi.

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“Most lease expenditures (85%) were in the provinces’ major economic centres, where average costs are R125 per m2 for leases of offices that average 5 400m2 in size. Elsewhere, leases tend to be considerably smaller.

“We must look at how the government spends money and realise savings from there.”