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National government inflicting death by a thousand budget cuts on SA and the Western Cape

Alan Winde
By Alan Winde
31 Aug 2023
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The Western Cape has issued multiple warnings over the past few months, all of which appear to have been ignored. Meetings have been cancelled or postponed, and when they do proceed as arranged, the constrained fiscal environment is glaring in its absence from the agenda.

It is often said South Africa is at a crossroads. And when it comes to our country’s worsening financial situation, our crossroads is on the verge of a calamitous collision right now.

We face a financial crisis with the potential for a devastating impact on basic service delivery unless President Cyril Ramaphosa and National Treasury act with urgency.

I will not sugarcoat the looming crisis that lies ahead, that all of us in government have a responsibility to confront now. It is becoming clearer that national government will not be able to fund the 2023 medium-term expenditure framework, in large part due to:


  • Lower than anticipated revenue from tax;

  • An over-optimistic growth forecast for the South African economy;

  • Crippling debt servicing costs;

  • The devastating knock-on effects of the worst year of load shedding yet; and

  • The unfunded increase in the public sector wage bill, which was centrally negotiated and agreed to by Pretoria.


Alarmingly, rather than addressing this looming fiscal crisis through sound and critical policy choices and structural interventions, national government has tried to pass this budget shortfall onto provincial governments. It is unacceptable that provinces will be forced to absorb the budget shortfall as a result of the public sector wage agreement, as well as a reduction in the provincial equitable share and cuts to conditional grants.

My greatest concern is what this will mean for our frontline services, and our ability to deliver basic services to the people who need them the most.

As the Western Cape Government, we have created a provincial government obsessed with our residents. We stretch every cent to ensure our constitutionally mandated service areas such as health, education and social development are prioritised to protect and support our residents, particularly our most vulnerable.

These envisaged cuts are neither credible nor rational and will inflict severe and lasting damage on service delivery well into the future. 

The Western Cape has issued multiple warnings over the past few months, all of which appear to have been ignored. Meetings have been cancelled or postponed, and when they do proceed as arranged, the constrained fiscal environment is glaring in its absence from the agenda.

I have again written to President Ramaphosa requesting that this fiscal crisis be placed at the top of the agenda of the upcoming President’s Coordinating Council (PCC) meeting set for this week Friday, 1 September.

I am deeply concerned that I have still not had a word from the Union Buildings. This silence is more than salt to a festering wound and could be construed as a Presidency and government out of touch. But it is an undeniable reality that many South Africans, particularly the most vulnerable, have little choice but to confront.

The national government has a duty, when allocating revenue, to act in the best interests of all three spheres of government, and especially our citizens. Yet through its unilateral actions, it is at grave risk of harming South Africans where it hurts the most: health, education, and social services.

All the warning alerts are already flashing on every budget measure, but we also know that these budget cuts will run deeper than what the numbers are telling us.

In the case of the Western Cape, our province is under immense pressure due to an ever-growing population. In the context of this budget slashing, keeping up with the momentum will be an even bigger challenge.

Read more in Daily Maverick: Robbing Peter to pay Paul — National government shortchanging healthcare in the Western Cape

In our engagements with national government, we will raise with them that they have not taken into consideration the highly responsible spending record of the Western Cape Government, which has seen the province maintain acceptable headcount and cost of employment to budget ratios. This is something that we have worked very hard to get right and we believe that we should not be punished for spending decisions made by other governments.

As the Western Cape Government, we have an excellent track record of service delivery backed by a culture of good governance. I refuse to allow this financial calamity to compromise our progress and determination to do even more for the people of the province.

Read more in Daily Maverick: SA’s delivery of crucial services under threat after Treasury desperately calls for public ‘fiscal consolidation’

We believe that there are clear alternatives available to national government to address the serious fiscal challenges facing South Africa: introduce the urgent structural reforms our economy needs to grow and ensure that decisive political steps are taken to counter negative investor sentiment in the market.

National government also needs to reconsider some of the unsustainable and unfinanced policy commitments that it continues to make. When faced with tough choices, we believe that there can be no greater priority than ensuring the education and healthcare of our citizens and protecting the most vulnerable among us.  

In the context of this current constrained fiscal environment, balancing budgets to support the work we do to create a better future for our residents is even more essential.

The Western Cape stands ready to work with national government to urgently address this. I trust that they will take my call. DM

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