THURSDAY, 9.00AM:
A CONFIDENTIAL meeting between ministers and provincial premiers in Cape Town on Wednesday (see below) was told that KwaZulu-Natal only managed to pay pensions after persuading the bank not to bounce all the cheques.
The combined overspending by the provinces for the year was over R6 billion, with KwaZulu-Natal the worst offender with R1,8 billion, followed by the Eastern Cape at R1,6 billion. While their had been savings to reduce that figure, provincial spending would prevent the government from meeting its 4% budget deficit target.
The provinces said the major cause of overspending is that they had been instructed to reduce staff by 300 000 over three years, but lacked the mechanisms to retrench staff. Meanwhile, public servants had received pay increases.
The meeting appointed a task team to look into the impact of national policies on the provinces, and whether the current policy — in which payments are made weekly to enforce fiscal discipline — was creating cash flow crises.
WEDNESDAY, 1.15AM:
The premiers and finance ministers of the nine provinces will meet with the national cabinet today (Wednesday) to discuss next year’s budget allocations. Also on the agenda for discussion, will be KwaZulu-Natal’s recent formal request for a ‘special grant’ of R600-million.
KZN premier and finance MEC, Ben Ngubane, said yesterday the cash-strapped province is in danger of falling into overdraft. He said the amount would just be withdrawn early from the funds already alloted to the province by this year’s budget – the request, he said, should not be seen as a request for extra funds.
The constitution prevents any province from incurring debt, but other provinces are also feeling the pinch. Both KZN and the Eastern Cape have estimated the year’s deficit at R2,2-billion each, while the Western and Northern Cape expect smaller deficits of about R1-billion.
Manuel has not yet formally adressed the issue, but is expected to do so after today’s meeting.