Allow me first to thank the HoD and Senior Managers of the Gauteng Provincial Treasury, and by extension every worker in this department. From the most senior official to the cleaners and security guards, you welcomed us when we were given this responsibility at the beginning of April. We say thank you.
I am told that tonight will take the form of a panel, so that we do not just stand here and address you, but engage meaningfully. So I will not take too much of your time and will make this brief.
Why we engage the media
Those entrusted with public service must, at all material times, make themselves available to the media. You are not only a key stakeholder. You are the people who report our work to our people, and who inform and educate where we cannot.
Taking questions openly and regularly is part of building a healthy democracy. When those elected into office refuse to take questions from the media, you must know that whatever they are doing needs to be seriously interrogated, because it will not be good.
So we will take questions, and we will engage openly and transparently, to build a stronger relationship with you. But in these few minutes, allow me to give a political overview of the work we have done since April, and to put real numbers in front of you.
Much of this work would not have happened without the stable coalition led by Premier Panyaza Lesufi. They say coalitions, like most marriages, are a bit of both: ups and downs. Because of the delicate nature of this relationship, it needs sober minds, cool heads and respect for one another, as equals.
That is what the Premier is providing. Coalitions are not perfect. They need constant engagement and consultation, and we thank him for his leadership. Those of you who are married must tell us.
There is growing consensus in the media, among academics, in social movements, in civil society and across political parties that the future of South Africa’s government is coalition. We must fine-tune coalitions quicker and better, and we must put our people first.
It is under these conditions that we accepted this responsibility, deployed by the EFF in the Gauteng Provincial Legislature and ultimately into this role.
The province we found
We arrived at a time when the province, in April earlier this year, which will be exactly 6 months this Saturday, with a total budget of R179.2 billion, was facing six key pressures.
First, the e-toll debt. Gauteng agreed to carry 30% of the SANRAL e-toll debt. Including interest, that is R20.1 billion, payable over five years. By the end of September 2026, we had paid R14.1 billion. The balance is R6.2 billion.
The next instalment of R3.3 billion is due on 30 June 2027, and the debt will be fully settled by June 2028. On top of this, the province carries a DBSA loan with a remaining balance of R5.6 billion, payable until 2033. Together, these two debts stand at R11.75 billion. Put plainly, this is money for a road the people of Gauteng never wanted to pay for, now competing with clinics, classrooms and housing.
Second, the Gautrain concession. The current concession comes to an end, and we had to familiarise ourselves with a major future commitment under very difficult conditions. Gautrain is a public asset. Whatever comes next must protect the public interest first, and we think that, this is what everyone has tried to achieve with the new concession.
Third, shrinking cash reserves. In the past, the province had money in the bank that gave it room to breathe. We are told how, at times, Gauteng could fund education before the equitable share arrived from national. That room is gone. Cash and cash equivalents fell from R9.8 billion in March 2025 to R5.8 billion in March 2026. That is a drop of R4 billion in one year.
Fourth, declining revenue. Our own revenue fell by 15.9% last year, from R8.6 billion to R7.2 billion. Part of this is a sluggish economy. Unemployment in Gauteng was 33.1% in 2025. Part of it is technology. Gambling has moved online, while our law still taxes the casino floor. By August, the Department of Economic Development had collected only R343 million, or 23%, of its R1.46 billion target, because land-based gambling keeps declining. And let us remember that 78.9% of our revenue, R139.1 billion last year, comes from the national equitable share.
We are a province that depends on transfers that are themselves under pressure.
Fifth, municipalities under enormous pressure. Rising debts, underfunded mandates and corruption. Emfuleni has received a qualified audit for five years in a row. And the relationship cuts both ways. Municipalities collect motor vehicle licence fees on our behalf, but the amount they owe the province has grown from R2.9 billion to R3.3 billion. Johannesburg, Ekurhuleni, Rand West and the Post Office are the biggest contributors.
Sixth, and most painful, the killing of public servants. There are increasing cases of officials, particularly those in finance and procurement, being assassinated. People are being killed for doing their jobs honestly. This is an attack on the state itself, and it must be treated as such.
This was the environment. The financial year began, and it was soon followed by the finalisation of the audit, the end of the municipal financial year, and the work on the Gautrain concession. We were also entrusted with the responsibility to facilitate and fast-track Public-Private Partnerships at EXCO level.
The equitable share: municipalities first, now provinces
Let me now speak to a matter that has changed since we arrived.
On 7 July 2026, National Treasury withheld the July equitable share transfers from 69 municipalities across all nine provinces. It relied on section 216(2) of the Constitution, read with the Municipal Finance Management Act.
The reasons were unfunded budgets, unresolved irregular and wasteful expenditure, weak consequence management, and unpaid debts to Eskom and water boards. Six of those municipalities are in Gauteng: Johannesburg, Emfuleni, Lesedi, Sedibeng, Merafong and Rand West.
On 28 July, Treasury began releasing the money, but with conditions. By then, only 20 of the 69 had received their full allocation, 21 had received part, and 28 had received nothing. The December instalment can still be withheld if the conditions are not met.
Now the Minister has gone further. He has told Parliament that provinces owe municipalities about R14 billion, and he has warned that provincial equitable share will be withheld where departments do not pay municipalities within 30 days.
Let me be frank about what this means for Gauteng.
We support accountability. We do not defend any government, at any level, that refuses to pay its bills. But the equitable share is not a bonus paid to politicians. It pays teachers, nurses, doctors, social workers and police reservists. It is nearly 80% of our revenue. Withholding it punishes the learner and the patient, not the official who failed to pay an invoice. National must find instruments that hit those responsible, not the people who depend on services.
At the same time, we will not hide behind that argument. We must put our own house in order, and we are doing so.
At the end of August, provincial departments owed Gauteng municipalities R2.7 billion for rates, taxes and services. After payments of R164 million that month, the balance came down to R2.5 billion.
Most of it is old. Of the debt that departments have confirmed, 78% is older than 90 days. Infrastructure Development owes about R1 billion and Education about R981 million. The City of Johannesburg alone is owed about R1.4 billion.
So here is what we have done:
- The Executive Council has approved the centralisation of the provincial budget for municipal rates and taxes under Provincial Treasury. We will control it, monitor it and pay it.
- We have verified provincial properties against Deeds Office records, so that we pay only for buildings the province actually owns.
- We are reviewing why municipalities charge business tariffs for schools and other public infrastructure.
- Together with COGTA, we have drafted protocols to resolve billing disputes on time. We workshopped them with municipalities on 14 October, and they go for approval by all accounting officers by the end of October.
- We have put in place an early warning system, so that accounts are flagged before they age into arrears.
The message to every department is simple. Pay municipalities within 30 days. If you do not, you are putting the entire province’s equitable share at risk.
What we committed to, and what we have done
When we held our first press conference in Soweto, together with the department, we set out our short- and medium-term priorities. Let me account against each.
Maximising revenue and finding new sources. Our own-revenue target for this year is R8.28 billion. By the end of August we had collected R3.09 billion, or 37%. That is behind where we want to be, and we know why. So we are moving on several fronts. We are shifting casinos from a flat tax to a flexible rate of between 8% and 15%.
The Gauteng Gambling Amendment Bill, 2026, which will regulate and license online gambling, has been out for public comment. We are taking back from municipalities the banking of motor vehicle licence fees. We are appointing a panel of debt collectors to recover money owed to the province.
In terms of accruals. We said accruals are the biggest threat to provincial finances, particularly in Health, Education and Infrastructure. Accruals are bills for goods and services already received but not yet paid. At 31 March 2026, unpaid bills to service providers stood at R11.3 billion, down 9% from R12.4 billion the year before.
That is progress, but it is not enough. Health alone carries R5.5 billion of unpaid invoices, and Education R1.9 billion.
The danger is this. When last year’s bills are paid from this year’s budget, this year’s services suffer. By August, the province projected overspending of R3.6 billion, up from R1.8 billion just one month earlier.
Most of it is driven by prior-year invoices: medicine at R985 million, laboratory services at R522 million, and municipal rates and taxes in Infrastructure Development at R1.4 billion. That is a vicious cycle, and we are determined to break it. Departments must commit only within their budget ceilings, and Treasury will hold them to that.
Paying service providers on time. Small businesses die when government pays late. In August, 98% of invoices across the province were paid within 30 days. Year to date we are at 82%, compared with 60% at the same point last year.
Township suppliers were paid within 30 days in 97% of cases. Let us be honest with you, though. Part of Health’s improvement comes from choosing which invoices to pay first. If Health had also paid the old invoices already sitting past 30 days, its compliance in August would have been 51%, not 99%. We will not celebrate numbers that hide the real problem.
On infrastructure spending. By the end of August, the province had spent R74.1 billion, or 41.3% of the budget, which is broadly on track. The infrastructure budget is R13.3 billion, and R5.16 billion, or 39%, has been spent. Human Settlements has recorded its best spending performance in five years. But Education has spent only 28% of its infrastructure budget, and Agriculture only 9%. Money that is not spent on schools and farms is a service our people do not receive.
Protecting the wage bill without freezing services. Paying our people is the biggest item in the budget, at R110.9 billion this year. Between April and August, Treasury confirmed the affordability of 5,680 posts across 12 departments. No post is filled without that confirmation. This is how we fill critical vacancies, especially in supply chain management, without breaking the budget.
In terms of clean governance. The consolidated financial statements of provincial departments for 2025/26 received a clean audit, the same as the year before. The consolidated public entities, however, remain qualified. Irregular expenditure rose by 7% to R8.2 billion, with Health at R3.7 billion and Education at R3 billion.
Fruitless and wasteful expenditure fell by 8% to R44 million, most of it interest on late payments. Contingent liabilities, mostly legal claims, rose to R16.3 billion, with R10.2 billion in medical negligence claims against Health. Behind every one of those claims is a family failed by the state. A clean audit on paper means very little if these numbers keep growing.
Municipal financial management. We said municipalities must adopt budgets properly, in line with the Constitution and the law. The withholding of equitable share has shown exactly why. Provincial Treasury is supporting municipalities before and after the audit, reviewing their quarterly reconciliations, and working with COGTA to stop unfunded budgets because of underfunded mandates.
On Public-Private Partnerships. We are not chasing PPPs for headlines. In August we held roadshows with eight departments and entities, which identified more than 20 potential projects across schools, hospitals, roads, water, energy and digital infrastructure, with 15 departmental champions nominated.
We visited the Stats SA and DFFE head office PPPs, and we are learning from the Chapman’s Peak toll road and the Tygerberg Hospital redevelopment in the Western Cape. One lesson stands out. PPPs rarely fail for technical reasons. They fail because of weak contract management and poor oversight. Every project will be tested for affordability and value for money before it proceeds.
Our own house. We have reviewed and revised Provincial Treasury’s 2026/27 Annual Performance Plan with senior management. It aligns with the Provincial Medium-Term Development Plan, responds to audit findings, and makes our targets specific and measurable and we consider this sufficient for now, as we continue to find out feet. It goes to the Office of the Premier by 31 October. We cannot demand discipline from others if we do not practise it ourselves.
Let me summarise in plain terms. The province has a budget of R179.2 billion. It still owes R11.75 billion in e-toll and DBSA debt. Its cash reserves have fallen by R4 billion. Its own revenue is shrinking. Departments owe municipalities R2.5 billion, and the national government is now threatening the equitable share that pays for 80% of what we do. That is the truth. And the truth is where any serious recovery must begin.
We will soon table the Medium-Term Budget Policy Statement and the Adjustments Budget. Tonight is part of setting out the state of things as they unfold, so that you understand the adjustments we will make.
We thank all of you, our stakeholders, partners and guests, for being here. It is a busy season of local government elections. But we still have a responsibility, at least for now, to continue our work, to keep the coalition stable, and to contribute positively as the custodians of Gauteng’s finances.
SUPPLIED.
