Finance Minister Pravin Gordhan arrived in Bhisho yesterday to gather information on how to slice up the mid-term budget which he is expected to table on October 26.
The Eastern Cape was the first point of call as Gordhan, along with his deputy, Mcebisi Jonas, kicked off their visit to all nine provinces to receive input from respective executive councils on priority areas in preparation for the mid-term budget.
Addressing the media in Bhisho yesterday, Gordhan said: “Clearly we are not in a very good space at the moment as an economy because we are growing at less than 1% of GDP [gross domestic product].
“And the lower the growth is, the lower the revenue that is collected. The lower the revenue that is collected, the lower the money that is available for spending by government whether it’s provincial, national or indeed local government.” Gordhan said his team would visit other provinces over the next 10 days to have similar discussions, with the aim of finding ways to save and also understanding some of the challenges provinces faced in service delivery, so they could address them.
His visits follow a cabinet decision that the national Treasury would have to undertake “further consultation with provinces on provincial expenditure and some of the challenges they face in the economy”.
Times Media has previously reported on how the Eastern Cape’s slice of the budget was being slashed due to migration of people to other provinces. Cuts are also a result of spending problems in the province.
Tabling the mid-term budget in November 2014, treasury MEC Sakhumzi Somyo announced that the Eastern Cape would lose more than R800-million in the following financial year.
Indications were that the province was spending too much on business and advisory services.
Gordhan said yesterday they were embarking on the road shows to make provinces understand the budget implications.
“How to spend it? How do we divide that money between national, provincial and local government?
And how can we work with provinces to contain expenditure. . . while helping them understand where they could collect more revenue,” he said.
Premier Phumulo Masualle said irregular expenditure remained a sticky area in the province but was being addressed.