Driving Economic Growth and Creating More Jobs Must Be the Focus of Government’s Fiscal Agenda

The Western Cape Government (WCG) is encouraged by some aspects of the 2024 Medium-Term Budget Policy Statement (MTBPS), which was tabled today, 30 October 2024, by Minister of Finance Enoch Godongwana.

“The WCG welcomes national government’s commitment to fully implement structural reforms, particularly in the logistics sector, through Operation Vulindlela,” stated Premier Alan Winde, adding, “efficient and modern rail, freight, energy, and ports are key to radically growing our economy. It is only through dramatically improved growth that our economy will create the jobs so desperately needed to uplift the most vulnerable residents in our province and to make our communities safer and more prosperous.”

“I urge national government to double down on the implementation of the objectives of Operation Vulindlela and to allow more private sector investment and participation. The provincial government agrees that more inclusive economic growth is needed to eradicate poverty. To achieve meaningful economic growth, we must open our economy to the private sector, to unlock and attract more investment and create more jobs,” stated Premier Winde.

To supplement the logistics sector, the WCG has been clear on the need to boost infrastructure development and investment. The WCG is encouraged by Minister Godongwana’s emphasis on growth-enhancing infrastructure development – a key priority of the Government of National Unity, which must be sustained and intensified.

The WCG notes the Minister’s remarks about controlling growth in the public sector wage bill. The Premier continued, “We agree our public servants must be fairly compensated, but not at the expense of critical frontline services in education, health, and social development. We will support measures to control the public service wage bill, ensuring it is not above inflation and therefore a burden on the province’s fiscus.

Deidre Baartman, Western Cape Minister of Finance added, “We welcome National Treasury’s approval of the Western Cape’s Budget Facility for Infrastructure (BFI) and Disaster Relief Funding applications as well as the updates to the data sets in the Provincial Equitable Share (PES) formula. Disasters and population growth do not wait for budget processes and thus we will monitor whether processes will be expedited to accommodate these pressures. However, today’s MTBPS makes it clear where national government’s priorities lie—and it is not with frontline services in provinces. The national government is effectively forcing budget cuts down on provinces and this will directly impact how many teachers, nurses, and doctors provinces can employ. We are effectively left out in the cold, with our envelopes remaining the same while having to meet increasing demands. The national government thus seems more interested in essentially bailing out Gauteng’s E-Toll debt than saving teachers.

“National Treasury seems adamant on moving forward on the Public Procurement Act regulations, including set-asides; based on a fundamentally flawed Act. The Western Cape Government will now consult its legal counsel,” Minister Baartman continued.