KZN cabinet tightens budget controls amid projected R9 billion deficit

KwaZulu-Natal’s government of provincial unity (GPU) has announced a series of stringent cost-cutting measures to tackle the province’s escalating budget deficit, currently projected to reach R9 billion by the end of the financial year.

Provincial Treasury said the cuts would lead to an estimated R3 billion cost-saving.

The initiative, issued via a Treasury Instruction from Finance MEC Francois Rodgers, is aimed at addressing spending pressures while prioritising essential services, KZN Treasury said in a statement.

The measures were endorsed during a recent provincial cabinet meeting and include significant reductions in subsistence and travel expenses, international travel, vehicle rentals, functions, and catering.

Rodgers said the cuts were intended to offset financial strain that has led to growing accruals and the province’s difficulty in paying suppliers within the legally mandated 30-day period.

“KZN is facing severe financial constraints,” Rodgers said.

“We are committed to achieving a budget surplus by the end of our term, which will require strict fiscal discipline and enhanced revenue-generation streams.”

He said that essential expenditure would not be compromised, underscoring the GPU’s focus on job creation, poverty reduction, and frontline service delivery in sectors such as education and health.

The cost-containment plan aligns with the recent Medium-Term Budget Policy Statement (MTBPS) by National Finance Minister Enoch Godongwana, which revealed that the national economy remains sluggish, with the debt-to-GDP ratio under pressure.

The MTBPS also confirmed that no additional midterm funding would be allocated to provinces, reinforcing the urgency for provincial-level fiscal reforms, said Rodgers.

But the province is anticipating a boost from new census data, with a potential R4 billion increase in its equitable share grant over the Medium-Term Expenditure Framework.

Despite this potential relief, Rodgers said that non-compliance with the new fiscal policies would not be tolerated, citing provisions under the Public Finance Management Act to enforce adherence.

Rodgers said the decision is part of a broader commitment to building an ethical and capable provincial government, as it seeks to balance financial responsibility with critical service delivery priorities amidst tough economic conditions.