WC TAPS INTO R3.2BN RESERVE

Increasing VAT not the solution

- MAYIBONGWE MAQHINA

THE Western Cape government is preparing for a R3.2 billion deficit in its 2025/26 budget, Finance MEC Deidre Baartman announced during her address in Cape Town yesterday.

Baartman detailed that the province's R269.524bn Medium-Term Expenditure Framework (MTEF) budget will allocate R43.789bn for job growth programmes, R3.955bn for safety initiatives, R194.928bn for education, health, and social care, and R23.439bn for innovation, culture, and governance.

She said the 2025/26 budget will be funded through the R65.376bn provincial equitable share allocation, R16.268bn in conditional grants, and R4.457bn from the provincial revenue.

However, she said the total provincial receipts amounted to R86.101bn in the 2025/26 financial year and our total provincial payments and provisions amounted to R89.316bn.

"In order to fund the R3.215bn deficit we need for the 2025/26 financial year, we will finance this budget deficit from our accumulated provincial reserves," Baartman said.

The budget in the next two years will be supplemented with R1.584bn in 2026/27 and R796.832 million in 2027/28 from their provincial reserves in order to maintain stability in service delivery while navigating fiscal pressures, Baartman added. She noted that no consensus has been reached on the national Budget recently tabled by Finance Minister Enoch Godongwana in Parliament amid opposition to the proposal on VAT increase.