The Western Cape Government (WCG) is concerned over the effects of the nationally imposed budget cuts on essential services.
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Premier Alan Winde and Mireille Wenger, provincial minister of finance and economic opportunities, released a statement on the effects of R6.7 billion in national budget cuts, highlighting the difficulties in health, education and social services.
‘The fact is that these budget cuts are beyond the control of the provinces because we rely almost entirely on funding from the nationally collected tax revenue,’ says Wenger.
‘This is then allocated to each of the nine provinces by the National Treasury through the Provincial Equitable Share (PES), to fund the core constitutional mandates of providing, amongst others, health care, education and social development services.’
The PES accounts for about 75% of the budget in the province, while conditional grants amount to 18% of the total budget. The national government decides what these sources should be, and they make up 93% of the Western Cape budget.
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A total of R6.7 billion has been cut from the Western Cape’s PES over the 2024 medium-term expenditure framework (MTEF) over the next three financial years due to a nationally imposed fiscal consolidation.
This amounts to more than the total combined budgets of the provincial departments of Police Oversight and Community Safety, Economic Development and Tourism, and Cultural Affairs and Sport.
The Department of Health and Wellness only received 37% of the province’s total budget.
‘Over and above these devastating reductions, provinces have not been fully compensated by the national government for the 2023 public sector wage agreement, that was centrally negotiated without consultation, and unilaterally imposed on provinces,’ says Wenger.
The wage agreement shortfall of R1.1 billion for the 2022/23 financial year will persist over the MTEF, with only Health and Education receiving partial funding at 70% and 64.5% respectively, while other departments and services bear the full cost.
Wenger notes that these budget cuts will have a direct impact on critical service delivery in the Western Cape.
Furthermore, the latest census data has not been incorporated into the PES calculations, says Wenger.
‘The result of which is that while the Western Cape is the third largest province in South Africa by population, we only get the fifth largest budget allocation.’
‘This is why, in November last year, we formally declared an intergovernmental dispute (IGD) with the national government,’ says Premier Alan Winde. ‘As much as we are fighting for our vulnerable residents, we are also fighting for our public servants like our health professionals so they can focus on their critical work.’
‘The mission of the WCG is to do all we can, using all available levers, to cushion these blows. However, the hard truth is that the quantum of the budget cuts is now so large that it will be almost impossible to fully mitigate the loss of funding from the national purse.’
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