The Free State government’s ongoing inability to generate revenue and manage finances continue to threaten the provincial fiscus. This is according to Dulandi Leech, spokesperson for the DA on Finance in the Free State Legislature.
She was speaking on the side line of the Auditor General’s (AG) report for the 2023-’24 financial year, revealing regression of the Free State government, owing to its inability to manage and generate income. Repeated talk of improving the situation by the provincial governmental leadership is yet to bear fruit.
Leech lamented that provincial government entities were compounded by the financial mismanagement. These entities are the Free State Development Corporation (FDC) and the Free State Gambling and Liquor and Tourism Authority (FSGLTA).
“The AG report also reveals that the FSGLTA faces similar challenges in terms of decreased assets and increased liabilities. The FDC saw a 9% decrease in its assets while its total liabilities increased by 9%. The development corporation should be at the centre of economic stimulation in the province and operate as a self-sustaining corporation that generates revenue, but is a liability instead. For the 2023-’24 period, the development corporation reported a net deficit of R9,8 million, raising concerns about its ability meet its financial obligations. Due to corruption and a management crisis, the FSGLTA has failed to fulfil its mandate, which is why we see so many liquor establishments across the province that were awarded licenses under questionable circumstances and why, in spite of hundreds of millions of investments, facilities like the Phakisa Motor Circuit in Welkom remains a white elephant,” said Leech.
She pointed out that the province had significant untapped potential.
“The most recent financial report indicates that during the past financial year, the Free State did not receive any revenue directly from tourism. Provincial resorts and reserves should bring in money instead of costing money. The Philip Saunders resort, for example, has cost the province R160 million and still fails to bring in revenue.”
Own revenue can significantly relieve an already overburdened fiscus, but not without government structured toward delivery rather than expensive and failing entities.
The Free State also has an increasing unemployment rate, hovering at 36,0%, expanded at 43,3%.
