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The DA-led Western Cape Government has declared an intergovernmental dispute with the National Government, to secure funding from National Treasury for the public wage increase they centrally-agreed and are enforcing on the province.

The wage increase has seen National Treasury scramble to fund this year’s budget, and has led to grave budget cuts in-year.

This was announced as the Minister of Finance and Economic Opportunities, Mireille Wenger, today tabled the Western Cape’s Medium-Term Budget Policy Statement (MTBPS) and Adjustment Budget in the Provincial Parliament.

The increase in public wages has 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.

In addition, National Government is cutting R640 million from conditional grants to the province, and there will be no disaster funding coming from National Government to repair damage from this year’s flooding in the Western Cape.

DA Western Cape Spokesperson on Budget, MPP Deidré Baartman says: “Provincial Governments have been put in an impossible position by the ANC’s fiscal irresponsibility, and the DA will fight to ensure that it is not the residents of this province that carry the consequences. That is why the Western Cape Government has launched an intergovernmental dispute. National Government negotiated and centrally agreed to the wage increase, and therefore they must fund it.

It is only because the Western Cape has a record of clean governance that our government will be able to respond and stabilise the fiscus in the very difficult conditions created by National Government. Residents can be assured that DA-led Western Cape Government has a plan and is proactively working to make sure service delivery is protected from ruthless National Treasury budget cuts, other provinces may not.”

Issued by the Democratic Alliance