R9.162 billion in unspent funds meant for the poor and vulnerable bails out failed SOEs

Issued by Alexandra Abrahams MP – DA Shadow Deputy Minister of Social Development
25 May 2023 in News

Note to editors: Please find attached soundbite by Alexandra Abrahams MP.

On 15 March 2023, the Department of Social Development (DSD) presented its third quarter expenditure report to the parliamentary portfolio committee on social development, which highlighted two shifts of considerable amounts to other departments:

  • R755.303 million transferred to the Department of Defence for the extended deployment as part of the Southern African Development Community (SADC) Mission in Mozambique. The funds were used for the compensation of employees and for items such as food rations, fuel, ammunition and transport of about 1 495 South African National Defence Force (SANDF) members.
  • R2.937 billion transferred to the Department of Public Enterprises for Transnet to repair and replace assets and infrastructure damaged by the floods in KwaZulu-Natal in April 2022.

Seeking further clarity on the matter, the DA approached National Treasury through a written parliamentary question which exposed “a total of R9.162 billion savings was declared by DSD in 2022/23 and approved by Parliament through the Adjusted Appropriation Act and the 2nd Adjusted Appropriation Act.”

“R5.462 billion in the Adjusted Appropriation Act and R3.7 billion in the 2nd Adjusted Appropriation Act. The shifts in the adjustment budget are described above.”

“In the 2nd adjustment budget:

i. R2.4 billion was shifted to the Department of Communication and Digital Technologies for the recapitalisation of the South African Post Office;

ii. R1 billion was shifted to the Department of Public Enterprises for settlement of business rescue plan obligations; and

iii. R300 million was shifted to the Department of Home Affairs for political party funding.”

The Department of Social Development’s failure to spend its 2022/23 budget left the door wide open for National Treasury to shift R9.162 billion, originally meant for the poor and vulnerable through various social development programmes such as substance abuse; family strengthening; protection of children; gender-based violence; funding of shelters; funding of NGOs and social workers, as well as social security programmes through SASSA, in order to bailout failed State-owned public enterprises.

DSD indicated in their third quarter report that R1.769 billion was unspent funds “due to low uptake of the R350 Social Relief of Distress grant following the lower income threshold and bank verification of applicants’ income.”

R1.769 billion in savings when many SRD R350 grants are still pending and many have not received monies, complaints which the DA regularly receives. Savings when South Africans are suffering under job-killing load-shedding and skyrocketing cost of living and food while children scavenge landfills for scraps, eat sand and wildflowers in an attempt to stop the hunger pains and perish in public hospitals due to the slow and agonizing death of malnutrition.

The shift of funds was approved by Parliament through the Adjusted Appropriation Act. In other words, the ANC used their 230-seat majority to prioritise vanity projects over the poor.

But that is not all, this majority in Parliament affords the ANC the lion’s share of the R300 million shifted to the Department of Home Affairs for political party funding as it is calculated on a pro-rata basis. This demonstrates the ANC’s continual abuse of parliamentary processes, in pushing through anti-poor budgets and legislation, as well as the continual abuse of taxpayer budgets to further their own self-interests.

The ANC’s vanity and obsession with bailing out failed SOEs has and will continue at the expense of the poor if they are not stopped in the 2024 National Elections. The ANC and those aligned to them, do not care for the poor and the proof is in the multi-billion-rand budgets which they fail to spend, only to reappropriate at a later date.

The Minister for Social Development, Lindiwe Zulu, is expected to deliver the Department’s budget for 2023/24 on 30th May 2023, however, this poor performance by the Minister and her Department leaves little hope and confidence the newly allocated funds will be spent on those who so desperately need it.