Premier of the Western Cape, Helen Zille has laid blame on the last round of public sector wage negotiations for a budget crisis that will freeze vacant job posts and reduce new posts.
Speaking yesterday in her “Inside Government column”, the premier said that the Finance Minister Pravin Gordhan’s budget will have more money committed to financing national and provinces this year and provinces like the western cape, hundreds of millions of rand would have to be cut down over the next three-year to have the budget balanced.
“If we are to apply it in the way national Cabinet has suggested‚ it will have a major impact not only on our ability to spend on infrastructure‚ but also on personnel,“ Zille said.
According to her, the Department of Public Service and Administration (DPSA) had been mandated by the national Cabinet to make sure that the total negotiated amount does not go above a fixed threshold and in the Western Cape as budgeted on Treasury’s budget estimates for a maximum increase of 5.5%”.
She recalled that as the DSPA succumbed to the pressures of unions to settle on a 7.2% increase for 2016/2017, it became pertinent for other governmental spheres to adjust by funding the difference from within existing budgets. She added that there was a R1.249-billion increase to the Western Cape wage bill for 2016/17 alone.
“The citizens of the province would have to suffer because of an unmandated agreement reached on the basis of money that was never available.”
The Western Province took its concerns to Treasury ‚ which “appeared to appreciate our position and informed us that the shortfall we (and other provinces) would incur as a result of the decision‚ would be made up from the government’s contingency fund…for unforeseen circumstances that might occur”.
“While this did not remove the concern we had raised over the wage negotiation process‚ it alleviated the need to pursue remedies to make up our budget shortfall‚” said Zille.
Meanwhile, president Zuma has in a recent meeting at Pretoria, informed all premiers of more budget cuts as they would not be given more money. This has contributed to “new crisis that has erupted due to national government’s chronic under-funding of higher education over many years”. Zilla said.
In short‚ money promised by Treasury to cover the unbudgeted public sector wage increases had to “be re-prioritized for payment elsewhere”‚ she said.
“No matter what fancy words are used to describe the impact of the cabinet’s decision‚ the fact remains that prior to the wage agreement being signed‚ the Western Cape Government did not have a shortfall in its budget; after it was signed we had a shortfall of about R3 billion over the next 3 years.
“The implications of this directive are dire‚ and Treasury suggestions have included the rationalization of our current work force… which is code for ‘retrenchments’ she said.
The outcome of the current budget cut according to her, would be a big blow on the western Cape which had been known for its “good policy decisions”‚ well-managed budgets and whose “expenditure on personnel as a percentage of the budget‚ is the lowest in the country‚ at 53.2%‚ compared‚ say‚ to Limpopo’s 72.9%”. “But when budgets are cut‚ there is no distinction between good governance and bad.” she added.
Speaking further, Zilla quickly pointed out that the province is faced with three options – To have the DPSA 7.2% wage increase agreement set aside or reversed; to insist that Treasury provides the shortfall in funds‚ meaning key policy decision changes by national government or to “rationalize” the public service to make sure that the province has enough money to continue front-line service delivery and pay remaining employees their increased salaries every month.
“These three options will now be interrogated further. It would make the most sense if we could all revert to the affordable 5.5% increase which Treasury endorsed.
This would be in the best interests of citizens and service delivery‚
Sure‚ it will require a small sacrifice by people who are already privileged merely to have a job in these times of mass unemployment. It is time to make this small sacrifice in the interests of the country.” She concluded.