Finance
In November 2023, in MTBPS 2023, it was announced that the Western Cape provincial equitable share would have a net reduction of R6,7 billion to its provincial equitable share
baseline over the 2024 MTEF and that the “significant shortfall” would need to be funded by departments over the 2024 MTEF:
(1) What are the details of this reduction to the baseline;
(2) whether there was any adjustment to this reduction to the baseline after the 2023 MTBPS made by the national Minister of Finance and the provincial Minister of
Finance respectively; is so, (a) what are the relevant details and (b) what are the details of how the Department funded the shortfall over the 2024 MTEF?
Details of the reduction to the baseline:
The total Provincial Equitable Share (PES) reduction of R6.7 billion over the 2024 MTEF amounting to R2.2 billion in 2024/25, R2.2 billion in 2025/26 and R2.3 billion in 2026/27 comprised of the following:
• R6.358 billion fiscal consolidation reduction for a direct baseline cut imposed nationally to address budget deficit pressures
• R380 million for the impact of new data technical updates to the PES formula.
(2) Details of any further adjustments to the reduction to the baseline after the 2023 MTBPS and how the reduction was funded:
(a) No further reduction post the 2023 MTBPS.
(b) The R6.7 billion reduction on PES over the 2024 MTEF was funded with:
• R4.1 billion from various sources such as underspending and
overcollection of own revenue from 2022/23, tax overruns in the 2022/23 financial year, interest earnings and the fiscal stabilisation reserve.
• R2.6 billion reduction of Votes 2024 MTEF baselines.
