Medium term budget discussions focus on maintaining service delivery despite severe budget cuts

13 October 2020

Yesterday we concluded the Provincial Government Medium Term Expenditure Committee (PG MTEC) 1 engagements, which are critical budget discussions hosted by Provincial Treasury ahead of the 2020 Medium-Term Budget Policy Statement (MTBPS). 

During PG MTEC 1, Provincial Treasury engaged with 13 provincial departments and 9 provincial entities over four days deep-diving into the many projects and initiatives we plan to deliver over the next three years, taking into account the fiscal challenges we face as a result of the Covid-19 pandemic.

Since the Minister of Finance, Tito Mboweni, tabled the Main Budget in March, it has been clear that due to the mismanagement of the economy and public finances by national government, together with the significant resources that have been re-allocated to respond to the Covid-19 pandemic, the cuts facing provinces will be more severe than ever before.

In anticipation of the PG MTEC 1 engagements and the anticipated cuts facing provinces, Provincial Treasury set strict fiscal targets for each department. While these are broad and preliminary, they have allowed us to assess the impact that these cuts might have across our departments and entities in the Western Cape.

I will now work with ‘Team Finance’ to assess the submissions and presentations made to us over the past four days to finalise the second Adjusted Budget and the preliminary Medium Term Expenditure Framework (MTEF) allocations ahead of the MTBPS which is scheduled to be tabled on 19 November 2020 in parliament in the Western Cape.

While it has been an incredibly challenging round of budget discussions with departments and entities, we have also had good discussions on how we can unlock new and innovative ways of working and delivering services to those living in the Western Cape. 

Critical to our finalisation of this stage of the budget process will be the announcements made by Minister Tito Mboweni next Wednesday, 21 October 2020, when he tables the national MTBPS.

We are concerned that there is a serious risk that provinces will be expected to absorb major budget cuts to bailout zombie state-owned enterprises like South African Airways.

Issued by Francine Higham, Spokesperson for the Provincial Minister of Finance and Economic Opportunities (Responsible for the Provincial Treasury and the Department of Economic Development and Tourism), 13 October 2020