Provincial Treasury 2020/21 Budget Adjustments (Vote 3)
Today we table the adjusted estimates of Vote 3: Provincial Treasury.
The Provincial Treasury may have one of the smallest departmental budgets in the Western Cape, but the important work that is done with that budget cannot be underestimated.
As Provincial Treasury is itself responsible for overall budgeting and fiscal management in the Western Cape, it continues to lead by example and has done everything possible to reduce expenditure.
The main appropriation of R356.9 million was adjusted down by R11.6 million in the first adjustments budget to R345.2 million. That revised appropriation has now been adjusted down further by R 38.4 million to R306.8 million for the 2020/21 financial year.
Over the past few years, Provincial Treasury has consistently and prudently implemented the Western Cape Fiscal Strategy by:
continuing to focus on proper expenditure management, proper revenue management and maintaining a balanced budget in the Western Cape; and
continuing to apply the principles of allocative efficiency, fiscal sustainability, fiscal consolidation and fiscal discipline in the Western Cape.
This work has come to bear this year, with our provincial reserves enabling the Western Cape to respond swiftly and effectively to the Covid-19 pandemic.
Provincial Treasury stepped up in the First Adjustment Budget and in support of the immediate health response, humanitarian response and economic response, mobilised every cent available, and allocated R3.05 billion to support the fight against Covid-19 in the Western Cape.
In the Second Adjustment Budget, Provincial Treasury have "leaned in" further and have mobilised an additional combined R1.4 billion support package for "Jobs", for "Safety" and for "Wellbeing", in this financial year, so that we can bounce back in the Western Cape.
And because the budget cuts we are facing are so severe, Provincial Treasury have also "leaned in" to help departments to transition to this new fiscal reality in which we have to make difficult decisions on what we will continue to do and what we will no longer do in the Western Cape.
They have done this through the creation of, the Fiscal Transition Support Facility, which is a R1.7 billion facility, drawn from our reserves, that can be accessed by departments over the medium term to support them to find new and smarter ways of delivering services in the Western Cape.
Leading by Example
No one can deny that 2020 has been a year of great turbulence, of instability and of transition. And while those conditions can cause great challenge they can also lead to growth and strength if harnessed correctly.
And I believe that has been the case for Provincial Treasury.
This has started with an investment in the Provincial Treasury leadership pipeline, with excellent candidates having filled both Deputy-Director General posts and several critical Chief Director posts inside the Department.
And it can be seen throughout the various programmes of the department.
We have begun critical expenditure and performance reviews which will help inform more efficient and effective ways of achieving goals in the Western Cape government;
We have embarked on a review of our public entities which will help drive improved governance within these important delivery vehicles;
We are the lead Treasury in South Africa for the way that we manage compensation of employees across to provincial government;
We are leading the way on Supply Chain Management reform, having published the first ever, Procurement Disclosure Report and being in the process of developing our automated procurement planning tool;
We are moving ahead with new ways to harness Artificial Intelligence to help analyse and inform the way that we do business in the Western Cape; and
We continue to provide critical support and monitoring within our municipalities to ensure enhanced financial performance across the Western Cape.
In many ways, Provincial Treasury is leading the way towards being a future focused, future ready department.
investing in IT capacity such as video conferencing capabilities;
innovating in the clean governance space through increased transparency and by harnessing technology; and
leading the way on critical policy discussions as we face an ever more fiscally constrained future.
Budget cuts have been dramatic, and we are not going to go down without a fight and will continue to robustly engage and arm wrestle with national government to get a fair deal for the Western Cape.
And so, on Friday, 27 November 2020, Premier Alan Winde and I submitted a section 79 petition to President Cyril Ramaphosa to bring to his attention material concerns over the constitutionality of certain aspects of the 2020 Division of Revenue Second Amendment Bill which was passed by Parliament on 26 November 2020.
While the Western Cape does support National Treasury's overall goal of decreasing the public sector wage bill, the way that they have proceeded in the 2020/21 financial year has raised significant concern for the Western Cape, as it has with other provincial governments as well.
Essentially, National Treasury have transferred significant risk to provinces, by pre-emptively cutting our budgets. This assumes that they will win their court case against the unions on the wage agreement, an assumption which is far from certain.
Should they lose that court case, provinces, including the Western Cape, will face a significant and immediate liquidity squeeze as we will have to immediately implement the wage agreement but without necessarily having the funds made available from national government.
And so, we trust that President Cyril Ramaphosa and his legal team will engage with our arguments and will return the 2020 Division of Revenue Second Amendment Bill to Parliament on the grounds of our valid constitutional concerns.
I said it before and I'm going to say it again, we cannot be expected to cough up R2.3 billion that we do not have in the Western Cape.
This year not only did the Provincial Treasury have to respond, alongside the rest of the Western Cape government, to the Covid-19 pandemic, but as a result of the crisis had to table not one but two adjustment budgets.
The scale of this task cannot be underestimated.
The hard work and dedication of "Team Finance" at Provincial Treasury deserves to be warmly applauded.
I would like to thank each and every staff member inside Provincial Treasury for all their hard work and persistence during this year.
I have said it before and will happily repeat myself because: "Team Finance" are certainly, 'behind the scenes' heroes in the Western Cape.