The Division of Revenue Bill before the Legislature may meet the letter of the Constitution, but it does not meet the needs of the Eastern Cape. While government claims this budget supports economic growth and reduces fiscal risk, it leaves our province facing deeper underinvestment and growing service delivery backlogs.
In real terms, this means that classrooms will become more overcrowded, hospitals will remain understaffed and in disrepair, and families in rural areas will be cut off from basic services because gravel roads have turned to mud. Municipalities will be left struggling to deliver water and electricity while residents bear the cost of a budget that does not serve them.
The Democratic Alliance is deeply concerned that this Bill continues to demand more from provinces like ours while offering less in return. The Eastern Cape is allocated R97.7 billion in the upcoming financial year, but that number masks the reality.
Over the medium term, the province’s allocation is expected to grow by just three per cent, which is far below inflation. Conditional grants show a pattern of stagnation and decline. The roads maintenance grant will fall by over R600 million by 2027. The grant for informal settlement upgrades is slashed by more than forty per cent. Health facilities and education infrastructure receive increases that are so small they cannot even preserve current levels of service. These figures reflect a retreat from responsibility.
The consequences are not theoretical. A child without transport cannot get to school. A mother cannot get care from a clinic that has no staff. A community without a working road cannot reach the services to which they are entitled. These are the lived realities that this budget ignores.
We have warned for years that the formulas used to calculate equitable shares and grants rely on outdated data. They do not account for rapid urbanisation or the increase in poverty. They do not reflect the real pressures faced by municipalities and provinces. The problem is compounded by the continued failure to spend conditional grants effectively, even as the grants themselves are shrinking.
The Bill allocates just 9.7 per cent of nationally raised revenue to local government, even though municipalities are expected to deliver essential services such as water, sanitation, electricity, and refuse removal. That is simply not sustainable.
We must act now to reform the Division of Revenue framework. The formulas must be urgently updated with current data. A new dedicated grant for learner transport must be introduced. We must identify new sources of provincial revenue and remove the bureaucratic obstacles that prevent us from unlocking public assets and attracting investment into infrastructure.
Unless we grow our revenue base, cut red tape and invest in the future, this province will remain trapped in a cycle of stagnation. Unemployment will rise. Poverty will deepen. People will leave.
The DA offers a clear alternative. We believe in a government that puts jobs and service delivery at the centre of every decision. We will continue to hold the executive accountable and fight for budgets that deliver real hope through real action.
The people of the Eastern Cape deserve leadership that delivers, and a future built on dignity, opportunity and honest government.