MINISTER of Higher Education and Training Blade Nzimande has no idea how to fund the estimated R2.7bn shortfall arising from the zero-percent fees increase announced by President Jacob Zuma, beyond raising taxes and squeezing the private sector, Democratic Alliance (DA) MP David Maynier said on Monday.
His comments come as the country still awaits details of how the shortfall will be made up, following Mr Zuma’s announcement. Mr Nzimande was set to disclose a funding solution last week but instead had to wait for Mr Zuma to return to the country.
“The fact is that the R2.7bn shortfall can be funded by re-prioritising expenditure within the existing budget, which will require amendments to the mini-budget in terms of the Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2000),” Mr Maynier said.
He said the DA proposed shifting R720m from the Department of International Relations and Co-operation, allocated for the “impact of the depreciation of the rand on foreign currency-denominated expenditure” for foreign missions, to the Department of Higher Education and Training.
“The National Treasury noted in the 2015 Budget Review that government spends over R3.5bn a year to maintain foreign missions. Rapid spending growth is largely attributable to higher property costs and rising staff costs. While the costs of locally recruited staff are too high, cost of living allowances for South African staff are more generous than those offered by other countries and international organisations — between 20% and 50% higher than the United Nations, for example. The location of some of the most expensive missions is not aligned with trade relations or other economic interests.
“The Department of International Relations and Co-operation will, in our view, be able to absorb the shortfall by cutting spending on foreign missions and/or closing foreign missions, which will have little or no impact on the international relations and trade relations of South Africa.”
Mr Maynier explained further that the second step would be to amend the National Development Bank Special Appropriations Bill 2015 in order to transfer the R2bn from the sale of government’s stake in Vodacom, currently allocated to the Brics (Brazil, Russia, India, China and SA) Bank, to the Department of Higher Education and Training, to be ring-fenced and rolled over to fund the shortfall in the 2016/17 financial year.