POLITICAL NEWS - Yesterday, 18 May 2021, the provincial parliament’s Budget Committee considered the Division of Revenue Bill (DORB) and agreed not to support the Bill which seeks to allocate just under R68 billion to the Western Cape for the 2021/22 financial year.
Over the next three years, the provincial government’s budget is set to be reduced by a staggering R20,7 billion in comparison to the 2020 Medium Term Budget, while local governments’ will experience a cut of R3.1 billion this financial year alone.
MPP Deidré Baartman says: “While I fully understand the severe impact of Covid-19 on government’s funding, my concern is for the consistent reduction in funding for the Western Cape. The Provincial Equitable Share (PES) formula, which determines the national allocation of each province, is flawed despite some recent updates.
There continues to be a delay in the reporting of the population increases, meaning that the formula uses outdated data. To fully address our priorities for recovery in the Western Cape, additional funding is needed. Without this, funds do not follow the needs of residents, our schools and learners, and our vulnerable communities. For this reason, the Budget Committee will be inviting that National Treasury to brief the committee on the PES formula.
The provincial government has consistently had to mobilise its own reserves to ‘fill the gaps’. Last year, despite the promises of national government to financially support provinces in combating Covid-19, the Western Cape Government had to mobilise R1.7 billion of its own reserves to protect provincial departments from severe budget cuts.
Even before the effects of the Covid-19 pandemic, we saw entrenched corruption and irresponsible spending by national government, including the bailing out failing SOEs. In fact, the Special Investigating Unit has indicated that a shocking R14.2 billion of the R30.7 billion spent on Covid-19 emergency relief efforts by the National Treasury is under criminal investigation.
To put that into perspective, that is more than half the budget for the Western Cape Department of Health for the 2021/22 financial year.
While the Western Cape Government has stretched every Rand in order bring services to residents, funding is need to support its work. National government needs to consider where its priorities lie – with residents or with failing SOEs such as Denel and SAA.”
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