KZN headed over the fiscal cliff as province is told to finance R5.3billion government employee wage increase
24 August 2023
During a KwaZulu-Natal (KZN) SCOPA meeting earlier today, Finance MEC, Peggy Nkonyeni, dropped the bomb that National Treasury will not fund the R5.3billion wage increase for government employees in the province.
The news has placed KZN in an untenable position and is a repeat of what we have already endured due to the unfunded national mandate regarding the payment of iZinduna.
The fact that KZN will now have to find more than R5billion for Compensation of Employees (CoE) is set to have a devastating effect on the provincial budget.
There is already no room to move in KZN’s coffers to fulfil this new national mandate. As a result, the province’s ANC-run government may well have to borrow the funds, a detrimental decision for the provincial fiscus.
The option of cutting spending within government departments to finance this massive sum is also not an option. KZN has been cutting back on budgets for years, to the point where many important projects have already been stopped to try to ensure financial stability.
The impact of budget cuts within departments has been dire, with many now projecting massive over-expenditure. This includes Education with an estimated R3billion overspend and Health, with a projected overspend of well over R4billion.
KZN is now headed over the fiscal cliff. The DA has consistently warned this ANC-run government about the looming disaster.
We have also warned about ongoing historical budgeting leading the province into the red. Yet the ANC has not listened and gone ahead as though it is business as usual – a clear lack of good governance.
Our province must be saved. The 2024 elections will provide KZN’s people with the opportunity to vote for a new government – one that is capable of running our province.
KZN headed over the fiscal cliff as province is told to finance R5.3billion government employee wage increase
Issued by Francois Rodgers, DA KZN Spokesperson on Finance and SCOPA
