Provincial and local spheres of government will now face the task of cutting their spending to realise much of the savings Finance Minister Pravin Gordhan pledged in his budget speech on Wednesday. This is compounded by an expected R6bn reduction in conditional grant allocations to provinces and municipalities in the medium term (R2bn in 2017-18). Local and provincial government, especially in poor communities, rely on grant allocations for housing development, basic service delivery and bulk infrastructure. In Gordhan’s speech, as well as the National Treasury’s Estimates of National Expenditure and 2017 Budget Review, provincial governments and municipalities are expected to cut spending and collect revenue more efficiently to offset funding leakage. The Budget Review said that up to six provincial governments around the country had undergone the process of reducing the number of entities under their authority to reduce costs to the fiscus. Gordhan said the national fiscus was ree...
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