Thulisile Mapongwana
Eastern Cape Finance MEC, Mlungisi Mvoko, says the province's fiscal outlook remains constrained, mainly due to the economy that is not growing at the expected rate.
He tabled his medium-term budget policy statement in the provincial legislature on Thursday,
MEC Mvoko also welcomed the additional funding from the national government of R2.3 billion that has been allocated as an adjustment.
"The additional funding is allocated to provide support to the provinces, especially for funding for health and education to respond to the cost of implementing the public service wage agreement which amounted to R3.6bn for the province in the current financial year," he said, noting that this the allocation does not cover the full amount.
"The total transfers from national to the province therefore amounts to R89.4 billion, and after taking into consideration the total payments of R92.5 billion, the province is left with a deficit of about R3 billion after adjustments.
"Provincial own receipts remain R1.6 billion in the Adjusted Appropriation, which brings the deficit to R1.3 billion before financing," Mvoko said.
He said the total payments amounted to R91.6 billion in the 2023/24 main appropriation, and departments have been allocated net additional funding of R857.6 million, which resulted in an adjusted appropriation of R92.4 billion.
Meanwhile, MEC Mvoko said conditional grants have been affected by the fiscal consolidation.
He says they've adjusted the budget downwards by R761 million, leaving the adjusted budget at R13.8 billion from the R14.6 billion allocated in the main budget earlier this year.
The Finance MEC said Minister Godongwana had outlined measures for fiscal consolidation in his budget speech, including a strategy of targeted spending adjustments.
Mvoko said these must based on policy priorities and the reconfiguration and rationalisation of the state.
"National Treasury issued guidelines on cost containment measures which the provincial treasury customised and subsequently issued a provincial cost-containment instruction Note 1, which among others, protects core items, governs the funding of non-core items and manages the compensation of employees," he said.
Opposition parties blasted the Bhisho government for spending the vast majority of the budget on salaries.
"Social Development, for example, was awarded R25 million for salaries but nothing more to feed hungry children," lamented DA chief whip in the Legislature, Bobby Stevenson.
"When one looks at the cuts to conditional grants, of R761 million, one sees that R133 million was cut from Health, R247 million from Education, of which R228 million was cut from the school infrastructure grant, and R70 million from Road Maintenance. The biggest cut was R256 million from the Department of Human Settlements," he noted.
Stevenson said despite these significant cuts, MEC Mvoko had failed to spell out any long-term plans to address the elephant in the room, the runaway cost of employment in the public sector, which is currently at around 66%.
The Economic Freedom Fighters said they were disappointed by the budget, expecting "interventions" to be announced in the departments of Education, Health and Cooperative Governance and Traditional Affairs.
MPL Simthembile Madikizela said these departments are the "main contributors" when it comes to unspent money having to be returned to the national treasury.
"Underspending cost the people of the Eastern Cape the chance to access service delivery," he said.
