/ 23 February 2024

KZN faces R4bn budget deficit because of national public sector wage agreement

Civil servants demonstrate during a public sector strike.
Civil servants demonstrate during a public sector strike.

KwaZulu-Natal faces a more than R4 billion budget deficit, with provincial departments struggling to find funds to meet the additional expense of the national government’s wage agreement for public sector workers.

This was the warning from outgoing Democratic Alliance (DA) provincial leader Francois Rodgers at a media briefing on Friday where he and uMngeni local municipality mayor Chris Pappas outlined the state of the province and the party’s election offering.

This was ahead of KwaZulu-Natal Premier Nomusa Dube-Ncube’s official state of the province address next week. Pappas is the DA’s candidate for premier in the province.

“If you look at the situation, at the closure of our budgets, we would be budgeting a deficit of R9 billion. That deficit comes about because the national government could not fund the negotiated wage agreement and has only funded a small portion of it. It funded R3.7 billion, which means our province still faces an over R4 billion deficit,” Rodgers said.

The majority of trade unions representing public sector workers agreed to a two-year wage agreement, which encompassed a 7.5% increase in 2023-24 and an inflation-linked increase in 2024-25, according to a statement issued by the treasury at the time of the settlement last year.

The cost of the agreement is estimated to be R37.4 billion in 2023-24, with carry-through effects applicable to subsequent financial years.

Nationally, the public sector wage bill will cost R421 billion or 34.9% of the total R1.206 trillion social wage bill allocated in the 2024-24 budget, a treasury spokesperson said on Friday. This is mostly for the salaries for educators and health professionals.

But, said Rodgers, the KwaZulu-Natal departments of health and education, which also make up the largest portion of the provincial wage bill, had received only 78% of the negotiated wage settlement.

“The other departments received nothing, they had to fund it entirely. Agriculture was affected to the tune of R80 million, Cogta [department of cooperative governance and traditional affairs] was affected to the tune of nearly R34.5 million,” he said.

“Health lost R2.89 billion because of the unfunded wage agreement and human settlements and public works, R26.4 million that they didn’t get, and the department of social development [DSD] lost R97.2 million,” he said.

“And now our entities, under the DSD, nonprofit organisations, have been told that there is no additional funding for them because of the budget cuts. I don’t need to tell you about the inequality that still exists in our province. And those entities played a critical role in dealing with those individuals. So all in all, we’re not in a great position.”

Rodgers said the province’s contingency reserve had dwindled from R500 million to just R158 million over the last few years. Service delivery had collapsed in the province and in eThekwini metro, which is struggling with water outages.

“We are lurching from one crisis to another,” Rodgers said.

He said KwaZulu-Natal’s expanded unemployment rate was at 43.4%, and it “remains the country’s murder and rape capital”, while the health department was facing medico-legal claims amounting to R31 billion and the education department had provided an internet connection, laptops, data projectors and other technology to only 110 schools.

Pappas said the DA was focused on dealing with crime and security, the controversial policy of cadre deployment, load-shedding and the water crisis, as well as creating jobs by working with the private sector, improving healthcare services and education and restoring respect for the Zulu monarchy in the province.

He said the performance management of officials as well as lifestyle and skills audits were essential to improving service delivery, noting that officials had resigned from his municipality after being implicated in lifestyle audits.

“We must measure service delivery. We must stop measuring the number of ribbons we cut. We have to have impact based programmes that have outcomes that see people’s lives tangibly improved,” Pappas said.