Note to editors: The open letter below was sent to Premier Panyaza Lesufi today regarding the proposed budget cuts by National Treasury
Dear Honourable Premier Panyaza Lesufi
RE: DA requests Premier Lesufi to call an urgent sitting to outline how Gauteng will implement the proposed budget cuts by the National Treasury
The Democratic Alliance (DA) in Gauteng is requesting Premier Panyaza Lesufi to call for an urgent sitting of the Gauteng Provincial Legislature (GPL). This is for the Premier of this province to outline exactly how the Gauteng Provincial Government (GPG) will deal with the proposed budget cuts that the National Treasury wants to be implemented.
Last month, the National Treasury instructed departments to cut budgets by up to 15%. It also instructed departments to freeze all vacancies, freeze the advertisement of the procurement of all infrastructure projects unless approved by the National Treasury, and reduce non-essential travel unless funded by non-government resources.
Recent National Treasury data indicates that the budget moved to a deficit of R143.8 billion for July, the largest since at least 2004 and wider than the R115.5 billion forecast by economists. South Africa’s fiscal deficit in 2023 is set to be between 6% and 6.5% of gross domestic product (GDP). Furthermore, the debt situation has worsened significantly and is expected to reach R6 trillion by 2025.
As a province, we are anxious. The cost of living is high, food prices are skyrocketing, and rolling blackouts have only exacerbated a situation that was on a downward spiral. A massive public sector wage bill, struggling local municipalities, failing State-Owned Enterprises (SOEs), the increased inability to service debt, talk of tax hikes, an expected budget shortfall in 2023, high levels of unemployment, and low investment, amongst others, have put South African households, workers, and businesses alike in a chokehold.
Furthermore, the DA is concerned about how these proposed budget cuts will affect the Nasi iSpani programme you implemented. Given the directive from the National Treasury, this programme will be negatively affected.
Daily, economists warn us of the dangerous financial path that the country is on. Alarm bells of a possible financial crash have started ringing in the face of slow economic growth.
The massive public sector wage bill is of greatest concern for the DA. The government plans to spend around R37 billion in the 2023/24 budget to fund public servant salary increases.
The full extent of what awaits the country will only be revealed when the Finance Minister, Enoch Godongwana, tables the Medium-Term Budget Policy Framework (MTBPS) on 1 November. We hope that the Premier will have shared his plan with us.
Premier Lesufi, Section 17(1) of the GPL Standing Rules states that the Premier may call an extraordinary sitting to conduct special business as mandated by Section 110(2) of the Constitution. This gives the Premier the power to call all members of the GPL to a special sitting.