Province in for tough times, predicts Meyer
MEC delivers medium-term budget
WESTERN Cape MEC for Finance Ivan Meyer warned of tough times ahead caused by sluggish economic growth when he delivered his mediumterm budget policy statement to the provincial legislature yesterday.
Meyer said the province’s economy was expected to grow by 2 percent next year, slightly up from the current 1.9 percent.
The statement is delivered annually by the finance MEC to give members of the provincial parliament a feeling for the province’s economic climate.
Meyer did not announce any major changes to how the provincial budget would be spent, and much of his 20-minute speech included short recaps of existing priorities.
These included making it easier to do business in the province, improving the standard of language and mathematics in schools, continuing to roll out a province- wide broadband network and upgrading informal settlements.
The tenor of the speech, and the accompanying 74-page document signalled finances would be constrained next year. “The economic outlook anticipates relatively low economic growth for South Africa and consequently the Western Cape,” stated the document.
“The domestic environment comprises low investment, low levels of business confidence and weak domestic demand.”
Meyer said sluggish growth meant “low levels of revenue for the fiscus”, a sign that next year’s budget would likely not introduce any expansive and costly new initiatives.
A higher- than- anticipated public sector wage agreement had increased pressure on the budget.
While not calling for a wage freeze, Meyer said the public sector wage bill and “low levels of productivity in state-owned enterprises” needed serious government intervention.
After the statement, Meyer announced budget adjustments for the year.
● R240 million would be added in net spending, the lion’s share going to public servants’ wages.
● R26.5m had been budgeted for climate change, disaster prevention and municipal fire brigades. Of this, R10m would go towards boosting fire fighting capacity across the province – especially in municipalities outside Cape Metro, R6.5m towards helping CapeNature manage wildfires, and R10m to assist with the current widespread drought.
As a result of the drought and its effects on farmers, the provincial government is also considering asking the national government to declare the Western Cape a disaster area.
Local Government MEC Anton Bredell said earlier in the week this followed an assessment of the how waterstressed the province was. “The assessments indicated more than one region or district municipality in the province is experiencing very dry and water-stressed conditions.
“Some areas are in more need than others. At least four municipalities have already moved to implement water restrictions as a precautionary measure.
“More may follow over the coming months.”