Hard times hit growth of economy

Drought the main thorn as Meyer presents R62bn ‘pro-poor’ budget

ALITANY of issues bedevilling economic growth in the province saw Finance MEC Ivan Meyer present a R62 billion budget in the Legislature with a major focus on the drought. Meyer listed the following as impacting negatively on the province’s economic growth: levels of economic growth and reduced transfers from the National Treasury, the drought/water crisis and the impact on agriculture, increased service load pressures, the extent of crime, damage to public and economic infrastructure, the impact of the VAT increase and the outcome of the public sector wage negotiations.

Meyer tabled what he dubbed a propoor budget amid a weak economy and growing consumer unhappiness. Although at times MPLs in the opposition benches heckled him, Meyer said the R62bn budget will ensure the delivery of health and education services, while still catering for drought interventions. The budget is for the 2018 Medium Term Expenditure Framework (3-year period).

Over the next three years, the Western Cape government will build close to 10 000 houses, collectively deliver 18 160 housing opportunities and build and maintain regional and national roads in the province, while billions will be pumped into upgrading existing schools, clinics and hospitals.

Meyer said there is an additional adjusted budget as R100 million was transferred from the National Treasury to provincial Human Settlements, of which R57m will be spent on catalytic projects and R43m allocated for land acquisition in Imizamo Yethu. Monies will go to municipalities for drought relief and R2m will be spent on asbestos removal in the Eden District. He said R257m will be spent on drought-relief projects.

“This is a pro-poor budget in which we are delivering critical services despite a really bad economy. The drought has severely impacted on this budget as we had to make provision for the agricultural sector. One of our biggest challenges is the drought, and added to that there is less money we are getting from the National Treasury, but still we have managed to deliver,” Meyer said.

Despite slow economic growth, Meyer said Education will receive R22bn of the budget, Health will be allocated R23bn, Transport and Public Works will get R7.7bn and Social Development R2.242bn.

The Department of the Premier received R1.486bn while the provincial parliament got R143.874m and the provincial treasury R325.390m.

“Over the 2018 Medium Term Expenditure Framework, R4.754bn will be spent on education infrastructure. The Western Cape Education Department will also facilitate drought interventions, and R490m has been allocated for this,” Meyer said.

The provincial government’s biggest expenditure was the compensation of employees, he said. Personnel expenditure accounts for R34.240bn of the total budget, which translates to 54.6% of the total 2018/19 budget.

The provincial government spends R13.613bn on goods and services.