/ 24 February 2009

W Cape pro-poor budget ‘not reckless pre-election spending’

In what it described as a ”pro-poor” budget, the Western Cape provincial government on Tuesday promised to combat the threat of job losses amid a global recession.

But Western Cape Finance Minister Garth Strachan denied that the budget was drawn up with an eye on the general election, now less than two months away.

”The points of departure for this provincial government are not reckless pre-election expenditure and empty promises,” he said.

Strachan said the province’s economy was projected to grow at 1,7% this year, substantially less than the 2,5% predicted in October last year. This meant there was a real risk of job losses.

”Three quarters of households in the Western Cape receive the bulk of their income from selling their labour power and this accounts for 65% of total household income in the province,” he said.

He said the provincial government had been liaising with the presidential task team established to deal with the impact of the global crisis.

The province would hold ”high-level summits” soon with leaders and representatives of labour and business, and would announce its interventions on March 4.

Premier Lynne Brown has, however, already indicated that the intervention will not take the form of massive cash bailouts for companies under pressure.

Strachan said the provincial government had already intervened to leverage existing support from the Department of Trade and Industry.

According to a document distributed by his department, the department of economic development and tourism would get R277-million in the coming year, 26% more than in 2008/09.

This would fund interventions including improving the match between skills demand and skills supply.

The budget for early childhood development was up by 37,5% to R314-million, while education as a whole received a 15% boost.

There had been a similar percentage increase in the health budget, which included R310-million for treatment of HIV/Aids.

The provincial department of local government and housing would get R1,6-billion in the coming financial year to deliver 19 000 housing units and 18 000 serviced sites. — Sapa