Africa-Press – South-Africa. All nine provincial governments are projected to overspend by a total of R24.8 billion this year, mainly due to higher wage costs for employees that kicked in on 1 April.
The wage increase for 2023/24 was not factored into the February budget as Finance Minister Enoch Godongwana did not want to pre-empt the wage settlement. On 31 March, unions and government signed a 7.5% increase that will cost the government R37.4 billion that has not been budgeted.
In a statement on the trends in first-quarter provincial spending, the Treasury said that both provinces and the largest service delivery departments were projected to overspend. The statement reads:
At the time of the wage agreement, Treasury warned that “tough trade-offs” would need to be made for departments to remain within their budgets. It suggested a range of options available to departments to rein in spending. These included:
While the numbers reflect only on the first quarter of the year, they show that provinces and line departments are yet to adjust their spending on goods, services and other programmes to come within the budget envelope.
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