The Fiscal Financial Commission (FFC) has told the Portfolio Committee on Social Development that the compensation of employees is a worry across all government departments.

FFC Commissioner, Dr Mkhululi Mcube, said as an expenditure item, compensation of employees has been growing rapidly and more than what the economy can take.

“Compensation of employees is crowding out service delivery. There is a need to look across departments and curb it so that it does not crowd out service delivery.”

Mr Mcube said borrowing costs were also beginning to crowd out spending on social services like education and health.

The FFC came to brief the committee on the expenditure of the entire social development portfolio so that it could do its oversight function maximally.

The Chairperson of the committee, Mr Mondli Gungubele, welcomed the presentation and said it will help the committee in taking decisions that will contribute to a prosperous South Africa.

Ms Elzabe Rockman, who is also an FFC Commissioner, told members of the committee that Covid-19 has caused massive impact and condemned many people to hunger and unemployment. “The department had played its role and will likely do so for the next few months. However, there are fiscal challenges going forward that the social development sector is likely to face.

“The mandate and purpose of the department is to ensure protection against vulnerability. Increase in the number of beneficiaries may not be financially viable into the future. It will be a good thing for government to expand services to cover other vulnerable people.”

Ms Rockman said the numbers of those who are dependent on government were growing substantially while the economy was not doing well. “This raises the question of sustainability.”

She said administrative and implementation challenges should be addressed so that money is not spent on administration glitches, but it must be spent on what is was intended for.

Members welcomed the presentation and sought clarity on certain issues including victim empowerment, quality of teaching at ECDs (early childhood development centres), and the number of people who depend on social assistance.

Dr Mcube said there was a need to prioritise the ECD sector with qualified teachers. “There is a need to prioritise this sector. If there is no capacity at ECDs, the output in the sector would be poor. ECDs are very important.”

The committee also received a briefing from the Auditor-General on the audit outcomes and performance of the sector.

By Sibongile Maputi

18 November 2020