Cape Town - The National Treasury has disputed claims made by the Democratic Alliance (DA) that 90% of the Western Cape conditional grant allocations for the 2023/24 fiscal year are being cut, saying there are no grants that have been reduced or cut and all the grant baselines were in fact increased.
DA Western Cape Spokesperson on Budget, Deidré Baartman, said the Division of Revenue Bill for 2023 has seen real decreases in funding for 20 out of 22 key conditional grants that the Western Cape Government receives from the National Government.
She said this is despite a record of good governance and unqualified audits for all Western Cape government departments in the 2021/22 financial year, the latest year fully audited by the Auditor-General of South Africa.
‘’Provincial governments have limited revenue collection capabilities and, as such, they receive the vast majority of their funding from the national government. That means that cuts to conditional grants are directly affecting the Western Cape Government’s ability to deliver the quality services our residents deserve. Even still, the Western Cape will stretch every rand to make sure we do the utmost for our residents within the financial constraints created by the ANC.’’
According to the provincial treasury, there are 22 conditional grant categories received by the Western Cape, of which two received above inflation increases, 10 received declines, and 10 received below inflation increases.
MEC of Finance and Economic Opportunities, Mireille Wenger, is concerned over effective declines in almost all conditional grants to the province, especially when inflation is factored in.
‘’This is despite increased service pressures and a growing population. Provinces are on the frontlines of service delivery and should be better supported to deliver quality services for citizens,’’ said Wenger.
The National Treasury said the analysis of the assertion that there is a 90 percent reduction to the grants going to the Western Cape is based on a comparison of information that is not comparable and allocations that are incorrectly captured.
It said that for the provincial conditional grants, the Western Cape compared the 2022/23 revised estimates as taken from the Western Cape 2023 Estimates of Provincial Revenue and Expenditure (EPRE) to the 2023/24 allocations as contained in the 2023 Division of Revenue Bill (DoRB).
‘’The appropriate comparison to assess if allocations are increasing or decreasing over time would have been to compare the allocations of the first year in 2022 DoRB (2022/23) against the first year in 2023 DoRB (2023/24). That way, the province would have an indication of whether their allocations in 2023/24 increased, decreased, or remained the same compared to allocations they received in the previous financial year, 2022/23,’’ it said.
Treasury further said it should be noted that the 2022/23 revised estimates contain rollovers and in-year additions through reallocations based on performance.
‘’Therefore, by using the 2022/23 revised estimates, this does not reflect the correct picture as the revised estimates have been artificially inflated by the rollovers and the reallocations when comparing them to the 2023/24 allocations in DoRB. Therefore, in all instances where there was a rollover or a reallocation, the Western Cape sees this as a reduction to their allocation given that the 2022/23 revised estimate is often higher than the 2023/24 allocation.’’