Daily Maverick
Dailymaverick logo

South Africa

South Africa

Gauteng is forced to make tough choices but it won’t cut education and health jobs

Gauteng is forced to make tough choices but it won’t cut education and health jobs
Nonkululeko Njilo
By Nonkululeko Njilo
26 Nov 2024
Facebook
10
The Gauteng government is paying the price for scrapping e-tolls, and will have to service its R20.1-billion debt to Sanral from its already constrained resources.

Six months after the controversial e-tolls were permanently shut down, the Gauteng government is still grappling with the financial burden. To service the R20.1-billion debt, which includes interest, Finance and Economic Development MEC Lebogang Maile said the province has had to make tough decisions that will strain an already stretched budget.   

Maile made the remarks on Tuesday, 26 November, while tabling his Medium-Term Budget Policy Statement before the Gauteng legislature in Johannesburg.   

“The obligation to service this debt has necessitated the implementation of a host of reforms and measures to maintain a healthy fiscal environment that will be both sustainable and manageable in the long term.”

The electronic tolling system, officially called the Gauteng Freeway Improvement Project, imposed tolls on Gauteng motorists for using newly upgraded highways in the province. The system, however, faced significant opposition from businesses, motorists, trade unions and civil society organisations.   

Read more: Roads agency Sanral faces R28bn debt linked to Gauteng's scuppered e-tolls 

In September, Maile announced that the provincial government had paid the SA National Roads Agency (Sanral), R3.8-billion towards its e-toll debt. This payment marked the beginning of the provincial government’s plan to settle its e-toll debt, with a commitment to settle it in five equal annual instalments, based on the government’s five-year interest rate.

“As the Gauteng provincial government, we have a full appreciation of the implications that repaying the e-toll debt will have on our financial position. The debt of R20.1-billion, inclusive of interest, is a substantial bite into our already stretched and limited resources… To meet our obligations to repay this debt, we have had to make very difficult decisions and re-orientate our budget priorities, which, necessarily, will have an impact on the fiscus,” Maile said.   

Although e-tolls were scrapped, motorists are still liable to pay their debts up until midnight on 11 April 2024. The national government is, however, yet to figure out how it will enforce this.

Budget adjustment


A total of R1.2-billion will be carried over from the 2023/24 financial year to 2024/25, including R920.9-million in conditional grants and R282.5-million in provincial equitable share funds. These funds will be used to cover outstanding expenses from the previous year, including goods and services costs and commitments related to payments for capital assets, according to the MEC. 

Maile announced that in the 2024/25 financial year, the provincial budget will be adjusted upwards with an amount of R2.1-billion, which includes: 

  • For the Office of the Premier: an amount of R135-million, of which R73.9-million is for outstanding Life Esidimeni claims, R57.4-million for the Commission of Inquiry into the Usindiso Building fire, and R4.2-million for SA Police Service (SAPS) security to the Commission of Inquiry; and

  • For the Gauteng provincial legislature: an amount of R53.7-million to provide for operational requirements and funding support for political parties represented in the legislature in line with the requirements of the Constitution of South Africa and Financial Management of Parliament and Provincial Legislatures Act.   


Gauteng faces complex socioeconomic challenges, including high unemployment, poverty and income inequality. Unemployment is particularly high among the youth, sitting at almost 40%.   

Maile made a commitment that despite significant budget cuts from the National Treasury, the province would not be laying off people in crucial departments including health and education.

Read more: Teachers stand to lose posts as SA’s provincial education departments face budget shortfall of billions of rands

“Furthermore, it is important to emphasise that the Gauteng provincial government will not be cutting jobs in education, health or any of the sectors that have been impacted by the budget cuts and debt prioritisation,” Maile said.  

As a result, the MEC announced the following additional allocations to partially offset pressures in the compensation of employees: 

  • R600-million for the Department of Health;

  • R300-million for the Department of Education;

  • R70-million for the Department of Social Development;

  • R59-million for the Department of Environment; and

  • 2-million for the Department of Infrastructure Development.


Social development


In March, Daily Maverick reported that the Gauteng Department of Social Development (GDSD) had cut R223-million from its 2024/25 budget for services to vulnerable persons because of fiscal constraints, leaving thousands of their beneficiaries facing a bleak future. 

Maile said this would be rectified as he announced that as part of supporting the most vulnerable members of society, an additional amount of R221.8-million would be allocated to restore the budget allocated to qualifying non-profit institutions to the 2023/24 baseline of R2.1-billion.  

He said fiscal discipline was the only way to get the province out of the woods. 

“Fiscal discipline requires that governments maintain fiscal positions that are consistent with macroeconomic stability and sustained economic growth. Furthermore, provincial departments and entities must explore alternative sources of funding to supplement the existing constrained revenue streams and thus enhance fiscal sustainability over the long term,” Maile said. 

Maile added that partnerships with the private sector, donor funding and developmental finance are potential alternative sources of funding.

The provincial government sees public-private partnerships as a key strategy, not only for delivering infrastructure but also for stimulating the economy, creating jobs and ensuring projects are completed on time and within budget. DM

Categories:

Tags: