Cape Town - The Western Cape government has threatened to approach the courts against the country’s government after declaring an intergovernmental dispute for a public wage increase.
The dispute relates to the centrally negotiated and agreed-to public sector wage bill, which was implemented after the Western Cape Provincial Parliament approved the annual budget, leading to in-year budget cuts.
Deidré Baartman, DA Member of the Provincial Legislature and spokesperson on the budget, said the increase in public wages had an almost R2.9 billion impact on the Western Cape’s budget for this financial year.
“Despite this, the national government has only allocated an additional R1.7 billion to the Western Cape in the 2023 division of revenue, which will only partially cover the wage increase for education and healthcare.
“All other departments’ wage increases will have to be self-funded. The approximately R1.1 billion shortfall would have to be found within the existing budget, meaning cuts to vital programmes that impact our residents directly,” said Baartman.
Tabling the Western Cape’s medium-term budget policy statement (MTBPS) and adjustment budget in the provincial parliament, Finance and Economic Opportunities MEC Mireille Wenger said that due to technical adjustments to the provincial equitable share as well as fiscal consolidation measures, there was a net reduction to the 2023 baseline of R6.7 billion, or 3.5%, over the 2024 medium-term expenditure framework (MTEF),
“This reduction comprises R379.612 million as a result of technical changes to the provincial equitable share (PES) formula over the 2024 MTEF, and a further R6.4 billion due to fiscal consolidation reductions imposed by the national government.
“The provincial baseline is thus reduced by R2.219 billion (or 3.64%) in 2024/25, R2.211 billion (or 3.48%) in 2025/26, and R2.307 billion (or 3.48%) in 2026/27,” said Wenger.
Premier Alan Winde said: “From the start of this process, it was evident we could not afford this wage deal, and all warning signs of the irrationality of the agreement were seemingly ignored. This is an issue that affects all provinces … What is desperately needed is prudent fiscal consolidation, management, and discipline. This appears to be lacking in the national government.”
Winde further stated that they are ready to approach the courts should their concerns not be heard.
The National Treasury was contacted for comment. However, no response was received by the time of going to print.