Western Cape 2023/24 MTBPS and Adjustments Budget: A Budget to Build Your Future
Today, provincial Minister of Finance and Economic Opportunities, Mireille Wenger, tabled the 2023/24 Western Cape Medium-Term Budget Policy Statement and the 2023/24 Adjustments Budget.
Opening her address, Minister Wenger stated unequivocally that: “We are a province that works and is at work, building a better future. In the face of the challenges and grave uncertainty that we face because of national failings, we do what we in the Western Cape do best: We protect. We strategically prioritise. We boost so we can continue to Build Your Future.”
Adjustments Budget 2023/24:
Speaking to the 2023/24 Adjustments Budget, Minister Wenger stated that: “Our national budget process has collapsed. There is no certainty over the next three years of the MTEF, and now, there is no certainty in the current financial year, with cuts being made in an unprecedented way, in-year.”
The centrally negotiated and agreed-to public-sector wage bill, implemented after the Western Cape Provincial Parliament approved the annual budget, has meant that the Western Cape is confronted with unprecedented in-year budget cuts because national government will not fully fund the impact.
This shortfall amounts to R1,1 billion and in a double whammy also comes with R642.284 million in cuts to Conditional Grants.
This government has repeatedly and consistently raised formal objections to how centrally negotiated wage deals that impact the provinces are concluded by national government, and these objections and calls to engage for a constructive solution have gone unheeded.
“We are taking this fight to the highest levels so that the people of the Western Cape receive what is right and, frankly, what they should lawfully receive as people of this country” shared Minister Wenger.
2023/24 Medium-Term Budget Policy statement:
Speaking to the Medium-Term Budget Policy Statement, Minister Wenger detailed that the Western Cape faces, due to technical adjustments to the Provincial Equitable Share as well as fiscal consolidation measures, a net reduction to the 2023 baseline of R6.7 billion or 3.5 per cent over the 2024 Medium-Term Expenditure Framework (MTEF).
This reduction comprises of:
- R379.612 million as result of technical changes to the Provincial Equitable Share (PES) formula over the 2024 MTEF, and
- a further R6.4 billion due to fiscal consolidation reductions imposed by national government.
The Provincial baseline is thus reduced by R2.219 billion (or 3.64 per cent) in 2024/25, R2.211 billion (or 3.48 per cent) in 2025/26 and R2.307 billion (or 3.48 per cent) in 2026/27.
In terms of the Public Sector wage bill, National Treasury has committed only 78% of the cost for Education and Health, leaving a shortfall of 22% for these, our largest departments, while no allocation has been made to any other votes to cushion the blow of these increases.
“And so, we have had to find – by cutting, protecting, and boosting - an additional R6.7 billion over the next three years. In response to the unprecedented fiscal constraints at the national level, the Western Cape Government is proactively drawing down its provincial reserves to safeguard against fiscal consolidation measures, which impact service delivery” continued Minister Wenger.
“We are able to cushion this severe slashing of our budgets from the fiscal stabilisation reserve and from the Provincial Revenue Fund across the MTEF. But we are still confronted with a shortfall of R2.646 billion over the MTEF that needs to be funded from our departments, amounting to:
- R855.789 million in 2024/25,
- R846.740 million in 2025/26, and
- R943.515 million in 2026/27.
Exacerbating the situation is the significant uncertainty around the cuts to the conditional grants, which have been reduced by R642.28 million in-year, but which are not yet clear over the 2024 MTEF.
Minister Wenger pointed out that: “In stark contrast to previous years, we are now only able to give broad estimates for allocations, by cluster, as a direct result of the uncertainties created by the chaotic budget process. Our focus remains on wellbeing, safety and jobs throughout.”
The preliminary 2024 MTEF allocations for the Social Cluster (Police Oversight and Community Safety; Education; Health and Wellness; Social Development; Cultural Affairs and Sport) amounts to R198 billion.
“Our focus on improving the well-being of our residents remains a priority, so that we can ensure that children in every district in our province can learn and grow and build their future careers and interests, so that we can help our residents to be healthy and active in society to, together, build communities for the future.” confirmed Minister Wenger.
Speaking to the preliminary 2024 MTEF allocations for the Economic Cluster (Mobility; Environmental Affairs and Development Planning; Infrastructure; Agriculture; Economic Development and Tourism), Minister Wenger stated that: “We will allocate R44.8 billion, to continue to prioritise according to our Growth of Jobs strategy because we know that by investing and creating the conditions in which the private sector can thrive, we are building your future by growing an economy that delivers sustainable job creation.
Underpinning all of this is a focus on safety. We are building a safe and secure future, not only by tackling crime in the most violent hotspots head on by increasing law enforcement but also by using data-led violence prevention to stop crime before it happens.
For the Governance Cluster (Department of the Premier; Provincial Treasury; Local Government), the total preliminary 2024 MTEF allocation amounts to R8.1 billion, by focusing on sound decision-making and institutionalising good governance.
Concluding her address, Minister Wenger stressed that: “In the face of these in-year cuts, as well as the significant uncertainly over the MTEF, this government is taking the most decisive of action to protect our frontline services, our children, those who depend on the public health system, and the most vulnerable in our society, while we strive to invest in the Western Cape’s future economic success by maintaining and building our province to be strong and sustainable, for a future that is full of jobs and growth, hope and prosperity. And so, to ensure stability and hope, we will continue to stand up for every single resident, now and always to deliver a Budget for Your Future.”
Related documents:
WC MTBPS AND Adjustments budget speech 2023 Final
WC Adjusted Estimates of Provincial Review and Expenditure (AEPRE) 2023
WC Medium Term Budget Policy Statement (MTBPS) 2023
WC Overview of Adjusted Provincial and Municipal Infrastructure Investment (OAPMII) 2023
WC Additional and Amended Allocations to Municipalities (AE Draft Notice and grant framework)
WC-Bill7-2023-ag_WC-Bill07-2023-ag
Media Queries:
Georgina Maree
Spokesperson for the Provincial Minister of Finance and Economic Opportunities
(Responsible for the Provincial Treasury and the Department of Economic Development and Tourism)
Cell: 076 423 7541