Ramaphosa Must Urgently Include Looming Budget Cuts On Agenda Of President’s Coordinating Council

The Premier of the Western Cape has written to President Cyril Ramaphosa requesting that imminent reductions in the 2023 medium term expenditure framework (MTEF) be urgently placed on the agenda of the upcoming President’s Coordinating Council (PCC) meeting scheduled for Friday, 1 September 2023. The fiscal emergency has, in large part, been created by the conclusion of the 2023/24 and 2024/25 public service wage settlement without the requisite funding to sustain such settlement.

“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,” said Premier Alan Winde.

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.

He added, “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 pointed 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.

The Premier stressed that given the severity of this situation, the President must place this issue on the PCC’s agenda for urgent discussion. “We as the WCG 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,” he concluded.

Premier Winde will also raise the constrained fiscal environment with Western Cape mayors and municipal managers at the Premier’s Coordinating Forum, today, 29 August 2023, in Plettenberg Bay.