GAUTENG PROVINCIAL GOVERNMENT 2025/26 FINANCE
Description: GAUTENG PROVINCIAL GOVERNMENT 202526 FINANCE SELECT COMMITTEE MEETING GAUTENG PROVINCIAL TREASURY 15 JULY 2025 PROVINCIAL ECONOMIC GROWTH AND JOB CREATION PROVINCIAL ECONOMIC GROWTH AND JOB CREATION Overview of provincial strategies for
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slide1. GAUTENG PROVINCIAL GOVERNMENT 2025/26 FINANCE SELECT COMMITTEE MEETING GAUTENG PROVINCIAL TREASURY 15 JULY 2025<br>
slide2. PROVINCIAL ECONOMIC GROWTH AND JOB CREATION<br>
slide3. PROVINCIAL ECONOMIC GROWTH AND JOB CREATION Overview of provincial strategies for economic growth and job creation.
Overview of provincial economic drivers and constraints to economic growth.
The provincial economic challenges that require the Committee’s intervention in the national sphere of government.
Provincial catalytic projects with the potential to grow the economy and create jobs.
The projects funded by the three spheres of government, that require the Committees’ oversight and intervention.
Overview of the provincial entities and their performance<br>
slide4. PROVINCIAL ECONOMIC DRIVERS TO GROWTH<br>
slide5. PROVINCIAL FISCAL FRAMEWORK<br>
slide6. 2025 MTEF FISCAL POSITION The table shows the allocations for the 2025/26 MTEF as re-tabled on 03 June 2025.
Over the 2025 MTEF, the budget deficit amounts to R1.2bn. in 2025/26 after changes to PES and conditional grants.
This deficit is funded through provincial financing
In 2026/27, the e-toll debt is funded through both the surplus at R340.5m and provincial financing of R4.299bn
The same principle is applied in 2027/28 where R1.9bn is funded through the surplus that is realised and R1.432bn through provincial financing.
Equitable share is reduced by a net amount of R2.971bn over the 2025 MTEF due to new data updates to the PES formulae<br>
slide7. E-TOLL DEBT REPAYMENT (OUTSTANDING DEBT) Gauteng Province’s 30% commitment for 30 June 2025 broken down in the table below:
Balance remaining after June 2025 payment is R10.804 billion and would be settled in future periods<br>
slide8. EQUITABLE SHARE OVER THE 2025 MTEF IN DETAIL Equitable share is reduced by a net amount of R2.971 bn over the MTEF due to new data updates to the PES formulae which is at R6.2 bn which was partially offset by the following additions:
R3.1bn for improvement of conditions of service differential of 1%between the budget guidelines of 4.5% and settlement of 5.5%.
R207.6m for PYEI in Gauteng Education
It should be noted that the R6.2bn cut was absorbed by all GPG depts.<br>
slide9. GLOBAL GPG RISKS TO THE FISCAL FRAMEWORK – 2025 MTEF BUDGET Limited resources to fund GPG priorities for the 7th Administration & impact of fiscal consolidation<br>
slide10. GPG-WIDE YTD EXPENDITURE BY VOTE 2022/23 – 2024/25 Source: 2022/23 Post-Audit IYM; 2023/24 Post-Audit IYM; 2024/25 pre-Audit IYM In the main the expenditure trends over the 3 years was increasing, with some departments experiencing fluctuations in the expenditure.
2022/23:Average percentage spending of 97% with underspending of R5.02bn– SACR, Community Safety and GDARD materially underspent their allocations, at under 90%, while Roads and Transport, e-Gov, GPL and OoP were between 90% - 95%. In absolute Rand value, the highest underspending of R2.71bn was recorded by Health, followed by DRT with R791m, the latter department having flagged spending challenges throughout the 2022/23 financial year, particularly within Conditional Grants.
2023/24: Average percentage spending of 98% with underspending of R3.38bn, whilst DCS spending below 90%, and DSD, GPL, Human Settlements and Sports between 90%-95%. In absolute Rand terms GDOH and GDHS realised significant underspending resulting from underspending on hospital services programmes and conditional grants respectively
2024/25: GPG expenditure stood at 99%, with underspending of R1.92bn, of which R381.5m is Conditional Grant related. A total of R1.042bn, or 55% of the overall underspending is from Health and Education, with the balance of R880m (45%) on the remaining departments<br>
slide11. GPG-WIDE YTD EXPENDITURE BY ECONOMIC CLASSIFICATION Source: 2022/23 Post-Audit IYM; 2023/24 Post-Audit IYM; 2024/25 pre-Audit IYM<br>
slide12. GPG-WIDE YTD EXPENDITURE BY ECONOMIC CLASSIFICATION 2022/23 – 2024/25 CoE and Goods and services respectively account for (80%) of the total GPG adjusted budget over the 3-year period, and the underspending of R1.8bn (2022/23), R443m (2023/24) and R511m (2024/25)
Over the 3yrs, COE budget has increased from R87.52bn(2022/23 fy) –R100.13bn (2024/25 fy), with spending ranging between 99%-100%, GPT has been manage the COE wage bill below 60% in the 3-years, this was due to the measure introduced by the Department of Public Service and Administration to manage the recruitment process. this however has been relaxed by the DPSA and is a risk to the fiscus unless the measures remain.
Goods and Services accounted for 22% -23% of the total spending over the 3-years,the underspending over the years was due to the shifting of funds within the vote to manage any overspending. Of which department have been utilising COE underspending to defray excess expenditure in other items.
Transfers and Subsidies expenditure on aggregate accounted for 16% of the total spending per annum. Majority of the allocation is for Non-profit institutions and Households followed by Departmental agencies.
Payment for Capital Assets accounted for 4% of the total spending and this has been constant over the 3 year. The cost drivers is buildings and other fixed structures and Machinery and equipment<br>
slide13. GPG-WIDE YTD CONDITIONAL GRANT EXPENDITURE 2022/23 – 2024/25 Overall GPG-wide expenditure on Conditional Grants has been gradually increasing from 90%- 99% between 2022/23 and 2024/25 financial year.
The expenditure on the conditional grants has picked up for most departments that had previously had very low spending.
Delays in the finalising business plans and the appointment of service providers has been the major contributor on the spending outcome over the period
GPT received rollover requests amounting to R308.9m, and based on the criteria outlined to departments, has submitted a motivation to National Treasury seeking that R295.665m of these funds be rolled over to the 2025/26 financial year; preliminary approval granted and awaiting formal communication Source: 2022/23 Post-Audit IYM; 2023/24 Post-Audit IYM; 2024/25 pre-Audit IYM<br>
slide14. GPG-WIDE ENTITIES EXPENDITURE 2022/23 – 2024/25 In the main the expenditure trends over the 3 years was increasing, with some departments experiencing fluctuations in the expenditure. Department of Economic Development (DED) account for high number of entities in the province (7). The entities are supposed to contribute to economic growth in the province, create jobs and support entrepreneurs.
2022/23:Average percentage spending of 88% with underspending of R559m– Cradle of Humankind, GEP, GGB, GGDA, GLB, GIFA, GMA and GPF underspent to varying degrees due to various reasons such as delays in the procurement process. Dinokeng and GTA recorded overspending
2023/24: Average percentage spending of 105% with overspending of R258m – GEP, GGDA, GLB, GIFA and GPF had material underspending due to various reasons such as high vacancy rates and delays in the appointment of service providers. Dinokeng, GGB, GTA and GMA recorded overspending due reasons such as Patronage Guarantee in case of GMA, under budgeting for bidding and host programmes (GTA)
2024/25: GPG entities expenditure stood at 107%, with overspending of R341m. GEP, GGB, GGDA, GLB and GIFA and GPF recorded underspending mainly due to delays in appointment of service providers and funded vacant posts. GTA and GMA recorded overspending due to reasons such as insufficient additional allocation for Patronage Guarantee in the case of GMA. Source: 2022/23 Post-Audit IYM; 2023/24 Post-Audit IYM; 2024/25 pre-Audit IYM<br>
slide15. GPG-WIDE ENTITIES EXPENDITURE BY ECONOMIC CLASSIFICATION 2022/23 – 2024/25 CoE and Goods and services respectively account for (89%) of the total GPG adjusted budget for entities over the 3-year period, the underspending of R247m (2022/23) and overspending of R370m (2023/24) and R494m (2024/25)
Over the 3yrs, COE budget has increased from R1bn in 2022/23 to R1.2bn in 2024/25, with spending averaging 97% per annum
COE accounted for 24%, 22% and 22% of the total spending in the financial years 2022/23, 2023/24 and 2024/25 respectively
Goods and services accounted for 72% of the total spending over the 3-years with underspending recorded in 2022/23 (R212m) while overspending of R397m and R558m was recorded in 2023/24 and 2024/25 respectively
High spending items under goods and services are as follows: Agency and Support, contractors, consultants, property payments, operating payments and advertising
Transfers and Subsidies expenditure accounted for less than 1% of total spending per annum for the period under review
Payment for Capital Assets accounted for 6% of the total spending per annum for the period under review Source: 2022/23 Post-Audit IYM; 2023/24 Post-Audit IYM; 2024/25 pre-Audit IYM<br>
slide16. THE PROVINCIAL FISCAL CHALLENGES THAT REQUIRE THE COMMITTEE’S INTERVENTION IN THE NATIONAL SPHERE OF GOVERNMENT Negative impact on provincial budget allocations emanating from the budget documents being due to NT before the planning documents (APPs) are due to DPME (i.e., budget precedes strategic plans)
Funding and coordinated support to address water problems in municipalities (Mogale City, Emfuleni)
Mogale City causing pollution in Cradle of Humankind & Hartbeespoort Dam
Emfuleni pollution Vaal river system<br>
slide2. PROVINCIAL ECONOMIC GROWTH AND JOB CREATION<br>
slide3. PROVINCIAL ECONOMIC GROWTH AND JOB CREATION Overview of provincial strategies for economic growth and job creation.
Overview of provincial economic drivers and constraints to economic growth.
The provincial economic challenges that require the Committee’s intervention in the national sphere of government.
Provincial catalytic projects with the potential to grow the economy and create jobs.
The projects funded by the three spheres of government, that require the Committees’ oversight and intervention.
Overview of the provincial entities and their performance<br>
slide4. PROVINCIAL ECONOMIC DRIVERS TO GROWTH<br>
slide5. PROVINCIAL FISCAL FRAMEWORK<br>
slide6. 2025 MTEF FISCAL POSITION The table shows the allocations for the 2025/26 MTEF as re-tabled on 03 June 2025.
Over the 2025 MTEF, the budget deficit amounts to R1.2bn. in 2025/26 after changes to PES and conditional grants.
This deficit is funded through provincial financing
In 2026/27, the e-toll debt is funded through both the surplus at R340.5m and provincial financing of R4.299bn
The same principle is applied in 2027/28 where R1.9bn is funded through the surplus that is realised and R1.432bn through provincial financing.
Equitable share is reduced by a net amount of R2.971bn over the 2025 MTEF due to new data updates to the PES formulae<br>
slide7. E-TOLL DEBT REPAYMENT (OUTSTANDING DEBT) Gauteng Province’s 30% commitment for 30 June 2025 broken down in the table below:
Balance remaining after June 2025 payment is R10.804 billion and would be settled in future periods<br>
slide8. EQUITABLE SHARE OVER THE 2025 MTEF IN DETAIL Equitable share is reduced by a net amount of R2.971 bn over the MTEF due to new data updates to the PES formulae which is at R6.2 bn which was partially offset by the following additions:
R3.1bn for improvement of conditions of service differential of 1%between the budget guidelines of 4.5% and settlement of 5.5%.
R207.6m for PYEI in Gauteng Education
It should be noted that the R6.2bn cut was absorbed by all GPG depts.<br>
slide9. GLOBAL GPG RISKS TO THE FISCAL FRAMEWORK – 2025 MTEF BUDGET Limited resources to fund GPG priorities for the 7th Administration & impact of fiscal consolidation<br>
slide10. GPG-WIDE YTD EXPENDITURE BY VOTE 2022/23 – 2024/25 Source: 2022/23 Post-Audit IYM; 2023/24 Post-Audit IYM; 2024/25 pre-Audit IYM In the main the expenditure trends over the 3 years was increasing, with some departments experiencing fluctuations in the expenditure.
2022/23:Average percentage spending of 97% with underspending of R5.02bn– SACR, Community Safety and GDARD materially underspent their allocations, at under 90%, while Roads and Transport, e-Gov, GPL and OoP were between 90% - 95%. In absolute Rand value, the highest underspending of R2.71bn was recorded by Health, followed by DRT with R791m, the latter department having flagged spending challenges throughout the 2022/23 financial year, particularly within Conditional Grants.
2023/24: Average percentage spending of 98% with underspending of R3.38bn, whilst DCS spending below 90%, and DSD, GPL, Human Settlements and Sports between 90%-95%. In absolute Rand terms GDOH and GDHS realised significant underspending resulting from underspending on hospital services programmes and conditional grants respectively
2024/25: GPG expenditure stood at 99%, with underspending of R1.92bn, of which R381.5m is Conditional Grant related. A total of R1.042bn, or 55% of the overall underspending is from Health and Education, with the balance of R880m (45%) on the remaining departments<br>
slide11. GPG-WIDE YTD EXPENDITURE BY ECONOMIC CLASSIFICATION Source: 2022/23 Post-Audit IYM; 2023/24 Post-Audit IYM; 2024/25 pre-Audit IYM<br>
slide12. GPG-WIDE YTD EXPENDITURE BY ECONOMIC CLASSIFICATION 2022/23 – 2024/25 CoE and Goods and services respectively account for (80%) of the total GPG adjusted budget over the 3-year period, and the underspending of R1.8bn (2022/23), R443m (2023/24) and R511m (2024/25)
Over the 3yrs, COE budget has increased from R87.52bn(2022/23 fy) –R100.13bn (2024/25 fy), with spending ranging between 99%-100%, GPT has been manage the COE wage bill below 60% in the 3-years, this was due to the measure introduced by the Department of Public Service and Administration to manage the recruitment process. this however has been relaxed by the DPSA and is a risk to the fiscus unless the measures remain.
Goods and Services accounted for 22% -23% of the total spending over the 3-years,the underspending over the years was due to the shifting of funds within the vote to manage any overspending. Of which department have been utilising COE underspending to defray excess expenditure in other items.
Transfers and Subsidies expenditure on aggregate accounted for 16% of the total spending per annum. Majority of the allocation is for Non-profit institutions and Households followed by Departmental agencies.
Payment for Capital Assets accounted for 4% of the total spending and this has been constant over the 3 year. The cost drivers is buildings and other fixed structures and Machinery and equipment<br>
slide13. GPG-WIDE YTD CONDITIONAL GRANT EXPENDITURE 2022/23 – 2024/25 Overall GPG-wide expenditure on Conditional Grants has been gradually increasing from 90%- 99% between 2022/23 and 2024/25 financial year.
The expenditure on the conditional grants has picked up for most departments that had previously had very low spending.
Delays in the finalising business plans and the appointment of service providers has been the major contributor on the spending outcome over the period
GPT received rollover requests amounting to R308.9m, and based on the criteria outlined to departments, has submitted a motivation to National Treasury seeking that R295.665m of these funds be rolled over to the 2025/26 financial year; preliminary approval granted and awaiting formal communication Source: 2022/23 Post-Audit IYM; 2023/24 Post-Audit IYM; 2024/25 pre-Audit IYM<br>
slide14. GPG-WIDE ENTITIES EXPENDITURE 2022/23 – 2024/25 In the main the expenditure trends over the 3 years was increasing, with some departments experiencing fluctuations in the expenditure. Department of Economic Development (DED) account for high number of entities in the province (7). The entities are supposed to contribute to economic growth in the province, create jobs and support entrepreneurs.
2022/23:Average percentage spending of 88% with underspending of R559m– Cradle of Humankind, GEP, GGB, GGDA, GLB, GIFA, GMA and GPF underspent to varying degrees due to various reasons such as delays in the procurement process. Dinokeng and GTA recorded overspending
2023/24: Average percentage spending of 105% with overspending of R258m – GEP, GGDA, GLB, GIFA and GPF had material underspending due to various reasons such as high vacancy rates and delays in the appointment of service providers. Dinokeng, GGB, GTA and GMA recorded overspending due reasons such as Patronage Guarantee in case of GMA, under budgeting for bidding and host programmes (GTA)
2024/25: GPG entities expenditure stood at 107%, with overspending of R341m. GEP, GGB, GGDA, GLB and GIFA and GPF recorded underspending mainly due to delays in appointment of service providers and funded vacant posts. GTA and GMA recorded overspending due to reasons such as insufficient additional allocation for Patronage Guarantee in the case of GMA. Source: 2022/23 Post-Audit IYM; 2023/24 Post-Audit IYM; 2024/25 pre-Audit IYM<br>
slide15. GPG-WIDE ENTITIES EXPENDITURE BY ECONOMIC CLASSIFICATION 2022/23 – 2024/25 CoE and Goods and services respectively account for (89%) of the total GPG adjusted budget for entities over the 3-year period, the underspending of R247m (2022/23) and overspending of R370m (2023/24) and R494m (2024/25)
Over the 3yrs, COE budget has increased from R1bn in 2022/23 to R1.2bn in 2024/25, with spending averaging 97% per annum
COE accounted for 24%, 22% and 22% of the total spending in the financial years 2022/23, 2023/24 and 2024/25 respectively
Goods and services accounted for 72% of the total spending over the 3-years with underspending recorded in 2022/23 (R212m) while overspending of R397m and R558m was recorded in 2023/24 and 2024/25 respectively
High spending items under goods and services are as follows: Agency and Support, contractors, consultants, property payments, operating payments and advertising
Transfers and Subsidies expenditure accounted for less than 1% of total spending per annum for the period under review
Payment for Capital Assets accounted for 6% of the total spending per annum for the period under review Source: 2022/23 Post-Audit IYM; 2023/24 Post-Audit IYM; 2024/25 pre-Audit IYM<br>
slide16. THE PROVINCIAL FISCAL CHALLENGES THAT REQUIRE THE COMMITTEE’S INTERVENTION IN THE NATIONAL SPHERE OF GOVERNMENT Negative impact on provincial budget allocations emanating from the budget documents being due to NT before the planning documents (APPs) are due to DPME (i.e., budget precedes strategic plans)
Funding and coordinated support to address water problems in municipalities (Mogale City, Emfuleni)
Mogale City causing pollution in Cradle of Humankind & Hartbeespoort Dam
Emfuleni pollution Vaal river system<br>