Prov­ince in for tough times, pre­dicts Meyer

MEC de­liv­ers medium-term bud­get

Weekend Argus (Saturday Edition) - - NEWS - JAN CRONJE

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.”

Ivan Meyer

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