Premier Alan Winde has written to President Cyril Ramaphosa to urgently discuss looming national budget cuts, which Winde says will risk the provision of essential services in the Western Cape.
Earlier this year, National Treasury told all government departments in provinces that no new spending will be allocated to them.
Winde wants to discuss the matter at the upcoming President’s Coordinating Council (PCC) meeting scheduled for Friday.
He says the recent, unfunded increase in public servant salaries are largely to blame for the looming budget cuts.
Earlier this year, government and the majority of trade unions agreed on a multi-term agreement for the financial years 2023/2024 and 2024/2025.
This includes an average increase of 7.5% salary adjustment for public servants for the financial year 2023/2024.
Winde says as a result, the imminent reductions in the 2023 medium term expenditure framework (MTEF) must be urgently placed on the agenda of the upcoming PCC meeting.
“South Africa’s deteriorating fiscal position poses a considerable risk to, among others, essential service delivery. It is for this reason that I have repeatedly requested that this issue be discussed at the PCC as a matter of urgency.”
Economists estimate that South Africa’s fiscal deficit for this year will exceed the budget set by finance minister Enoch Godongwana.
South Africa’s fiscal deficit for 2023 is set to be between 6% and 6.5% of gross domestic product (GDP), much higher than the minister’s expected 4%.
The provincial government has previously written to President Ramaphosa emphasising that the fiscal challenges arising from budget reductions faced by the WCG would be severe.
It would not be possible to protect frontline services, such as health care, education, and social development. The Premier stressed that this would likely exacerbate frustrations and grievances in communities across the country.
“Severe expenditure reductions that harm basic, constitutionally mandated services are not credible nor rational. Residents, particularly the most vulnerable, will bear the brunt of these budget cuts due to the significant negative impact on service delivery. Provinces should not be forced to absorb the budget shortfall as a result of the 2023 public sector wage agreement. National Government cannot commit provinces to expenditure by concluding wage agreements on their behalf, without providing the requisite funding.”
The Premier points out that section 214(2) of the Constitution provides that in its allocation of revenue the national government must, amongst others, ensure that provinces are provided with sufficient revenue allocation to provide basic services and perform the functions allocated to them.
“We remain committed to addressing these concerns as this would be in the best interest of our citizens, particularly the most vulnerable. While I am raising this issue on behalf of the Western Cape, I know that this is an issue that will be of concern to all provincial governments.”