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Today the KwaZulu-Natal (KZN) Legislature debates the Provincial Adjustments Appropriation Bill in terms of Treasury Note 6.6.3. Section 31 of the Public Finance Management Act (PFMA) stipulates the circumstances under which the province may table an Adjustments Budget.

Section 43 of the PFMA, read together with Treasury Regulation 6.3 determines that some virements may be approved by an Accounting Officer, some must be approved by Provincial Treasury, whereas some require Legislature approval.

For the first time in many years, National Treasury is making no amendments to our provincial budget in this Adjustments Budget, with the exception of the roll-over of unspent conditional grant funding. The primary reason for this is that tax collection for the current year is expected to be R22.3 billion lower than had been estimated when the main budget for the year was set.

As a result, KZN’s Government of Provincial Unity (GPU) is left with many mouths to feed - and not enough in the pot.

Complicating matters further is the notorious, now well-documented 2024 wage agreement. As KZN Finance MEC, Francois Rodgers and I have repeatedly stated, no one is coming to the rescue.

KZN is, however, fortunate to have avoided returning unspent conditional grant funding, relating to the previous financial year, to the national fiscus. This is due to the diligent work of Provincial Treasury acting in terms of Section 22 of the Division of Revenue Act (DORA).

In summary, KZN successfully demonstrated that the full amount of unspent funds had been committed, securing National Treasury's approval for a rollover. As such, KZN’s Department of Human Settlements grant of R263.7 million was not returned to the national fiscus and instead approved by National Treasury and treated as a provincial roll-over.

KZN is also fortunate to be able to allocate provincial cash resources in this Adjustments Estimate, with funding available for allocation in this Adjustments Budget from three sources:
• Under-spending from the previous year, along with revenue over-collection from that year totalling R726.4 million;
• The Contingency Reserve totalling R236.4 million and;
• Collected unbudgeted revenue in the current year totalling R30.2 million.
This totals R993 million which is now available in provincial cash resources.

The hungry mouths referred to earlier called out for R5.8 billion in additional funding but unfortunately only R993 million was in the pot. The Provincial Executive Council have determined that these funds will be allocated as follows:
• The R263.7 million grant funding referred to earlier has been rolled over and allocated to Human Settlements
• R72.3 million was allocated to fund all provincial equitable share roll-over requests
• R626.8 million was allocated to various provincial commitments and budget pressures - most notably R345 million to Public Works, R95 million to the school nutrition programme and R75 million to the KZN Youth empowerment fund and;
• R30.2 million was allocated where departments requested that funds collected into revenue in 2024/25, or held in the Provincial Revenue Fund, be allocated back to them.

The Democratic Alliance (DA) welcomes these allocations, particular during severely challenging financial times, as sensible and rational. We commend the following KZN government departments and entities for tightening their belts and producing a decrease in expenditure or savings. These have allowed virements to make this Adjustments Estimate possible: The Office of the Premier (OTP), EDTEA, Education, Health, Human Settlements, Sports, Arts and Culture, Transport, Social Development and Public Works.

The MECs responsible for these departments have shown what can be done when we work together and commit ourselves to innovation. There is light at the end of the tunnel and we must not deviate from the path to financial recovery.

Issued by Tim Brauteseth, MPL - DA KZN Spokesperson on Finance