Western Cape tables 2017-2020 Medium Term Budget Policy Statement
Earlier today, Western Cape Minister of Finance, Dr Ivan Meyer tabled the Western Cape Government’s Medium Term Budget Policy Statement commonly known as the “mini” budget.
The Western Cape Provincial Budget estimated to amount to R56.023 billion in 2017/18, R59.796 billion in 2018/19 and R64.083 billion in 2019/20.
Commenting on these figures Minister Meyer said:
“In addition to the impact that global risks has had on our economy which is expected to slow further to 0.5 per cent in 2016 from 1.3 per cent in 2015, political uncertainty, electricity constraints, water shortages and drought has adversely impacted the South African economy.”
“One of the hard truths in South Africa is that the South African government wage bill, plus total social grants plus debt servicing costs equals 69% of government expenditure. This is not a sustainable fiscal path. The Western Cape has therefore introduced Cost of Employment (COE) upper limits and we have assented this into legislation” said Meyer.
MEC Meyer highlighted that provincial departments are fully aware that there is limited room for fiscal expansion and any additional funding requirements for expansion of current or new programmes are to be funded within the current budget allocations.
“Fiscal consolidation remains a priority over the 2017 MTEF and will require a review of programmes and projects to identify what this Government should prioritise in line with our fiscal and strategic imperatives” said Meyer
Given the economic climate the Western Cape also for the first time included a fiscal risk statement as part of the MTBPS.
“We have to ensure sustainability in public finances whilst providing sufficient policy room to manage adverse shocks resulting from the current weak economic and fiscal environment. The hard truth is that we have to cut our expenditure to maintain our current service delivery standards while at the same time maintaining fiscal discipline” said Meyer.
Infrastructure will continue to form the basis for growing the Western Cape economy.
Meyer: “The Western Cape Government owns and maintains approximately R200 billion worth of immovable assets and roads. This portfolio of assets is critical to the realisation of the Western Cape’s socio-economic, service delivery and growth objectives.”
Key priority projects to support economic growth are the Borcherds Quarry Interchange on the N2 and the N1/N7 upgrade.
“The development of sustainable integrated human settlements in the Western Cape that will also allow its residents to access social and economic opportunities close to where they live” said Meyer
Western Cape Provincial Legislature Parliament receiving an additional R5 million in 2017/2018, R7.5 million in 2018/19 and R10 million in 2019/20.
The Western Cape is an accountable government and we will therefore strengthen the oversight and governance role of our legislature. Said Meyer.
Minister Meyer also announced and additional R908.166m net adjustment to the Western Cape Government’s 2016 main budget.
Meyer: “The adjustment estimates are in line with provincial policy priorities. I have therefore allocated R439.464 million to infrastructure related projects, in the main to Transport and Public Works (R216.805 million), Education (R142.492 million), Economic Development and Tourism for the acquisition of land for the Saldanha Bay Industrial Development Zone (R100 million), Health (R59.894 million) and Human Settlements (R20.173 million).
Meyer further announced additional R25 million which will be expanded over the 2017 MTEF to deal with the impact of the drought.
“In support of measures to address water security and the spill over effects of drought the Department of Environmental Affairs and Development Planning receives R5 million to ensure the availability of water for sustainable growth and development, the Department of Agriculture receives R10 million for food and water security and the Department of Local Government receives R10 million as part of a support package to Municipalities” Meyer.
R65.293 million is also allocated for various ICT related projects in the Departments of the Premier, Education and Transport and Public Works.