At a media briefing on Tuesday, Gauteng finance and economic development MEC Lebogang Maile rejected claims that the province is in a financial crisis.
Bizarrely, this comes after Maile himself warned the province had a R6bn shortfall.
In September last year, the DA warned of a potential collapse of Gauteng's finances, claiming the province invested large amounts of money in the Nasi iSpani programme including the training of crime wardens, only for much of this money to be returned to the provincial Treasury.
“Premier [Panyaza] Lesufi has introduced bursary schemes, a state-owned bank, a state-owned pharmaceutical company and several initiatives aimed at usurping the mandates of local government. This spend first, plan later approach to government puts unnecessary strain on provincial financial resources,” DA MPL Ruhan Robinson said.
However, Maile said in November overall expenditure was R115.238bn or 68% of the adjusted budget of R169.213bn, leaving R53.9bn available to be spent until the end of March 2025.
He said expenditure was mainly driven by education and health, which accounted for 80% of total expenditure.
Health expenditure was R46.1bn or 69.8% against the adjusted appropriation of R66.017bn attributed to its main programmes including central, district and provincial hospital services.
The department received an additional R600m during the recent adjusted budget to partially offset pressures in the compensation of employees, he said.
Education spending amounted to R45.9bn or 69.5% against an adjusted budget of R66.142bn, with high spending emanating from the public special schools and early childhood development programmes, he said.
“Due to in-year pressure, the department received an additional R300m during the adjustment budget to partially offset pressures in the compensation of employees.”
Maile said the provincial government budget increased by R3.4bn during the 2024/2025 adjustment budget with a rollover of R1.2bn and additional funding of R2.1bn.
“While the 2024/2025 adjustments budget saw a net injection of R3.4bn in additional funding and approved rollovers, there is still pressure in a few other departments. This will necessitate further reprioritisation to avoid unauthorised expenditure at the end of the financial year.”
After the scrapping of e-tolls, Maile said the province resolved the funding impasse, contributing 30% to settling Sanral's debt and interest obligations, while the national government would cover 70%.
The obligation to service this debt has necessitated the implementation of a host of reforms and measures to maintain a healthy fiscal environment that will be both sustainable and manageable in the long-term. True to our commitment, in September 2024, we made the first instalment amounting to R3.8bn. billion. This amount consisted of R3.2bn billion historical debt and the maintenance portion of R546m million.
— Lebogang Maile, Gauteng finance and economic development MEC
“The obligation to service this debt has necessitated the implementation of a host of reforms and measures to maintain a healthy fiscal environment that will be sustainable and manageable in the long-term. True to our commitment, in September 2024 we made the first instalment amounting to R3.8bn. This amount consisted of R3.2bn historical debt and the maintenance portion of R546m,” he said.
The province has an e-toll debt of R20.1bn including interest, he said, adding this is a substantial bite into its already stretched and limited resources.
“To meet our obligations to repay this debt, we have had to make difficult decisions and reorientate our budget priorities, which, necessarily, will have an impact on the fiscus. But we have remained steadfast in the commitment that service delivery priorities will not be negatively affected.”
Maile said the 2025 budget will see a conclusion of the national fiscal consolidation strategy, with debt stabilising, a reduction in the fiscal deficit to pre‐Covid-19 levels and a stabilisation of debt service costs as a percentage of revenue.
However, there was still concern about elevated risks to the outlook in the short- to medium-term that cannot be ignored. He attributed this to low revenue growth, wage settlements, higher borrowing costs and persistent deficits accumulated from state-owned companies, potentially leading to increased demands for budgetary support.
“Due to a decline in Gauteng’s share of the national population, the province faces further budgetary reductions. Key components such as education, health and poverty alleviation, which collectively account for 91% of the provincial equitable share formula, will be affected, creating additional fiscal pressure.”
He said efforts to improve spending efficiency are under way including standardised pricing for frequently procured items and the introduction of a comprehensive raft of practice notes that reinforce fiscal discipline, eliminate wastage, improve accountability and enhance the province’s ability to meet its development goals.
“While the provincial government is operating under a strained fiscus environment, the province is not facing imminent bankruptcy. Members of the media have an obligation to report the truth and to do so with an appreciation of the impact that untrue and subjective reporting can do to the provincial and national economy.
“Beyond the panic that such reports can cause to residents of Gauteng, they have the potential to also impact businesses and diminish investor confidence at a time when the provincial government is working hard to strengthen the provincial revenue.”
TimesLIVE
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