Staff debt owed to the Gauteng provincial government stood at R308m at the beginning of the financial year but had been reduced to R202m by the end of March with R119m owed by health department staff and R61m in education.
The staff debt arose because individuals were paid after their resignations instead of being removed from the system.
Claims submitted to pension funds to claw back this debt took time. Another reason for the staff debt was caused by employees who took sick leave after their leave days had been exhausted.
Now the Gauteng provincial government is in the process of establishing a panel of debt collectors to assist in reducing this mountain of outstanding debt.
The deputy director-general of revenue management in the Gauteng provincial treasury, Zukiswa Ncunyana, told members of the National Council of Provinces’ select committee on finance on Tuesday that because the province is not a registered debt collector there were certain processes it could not follow, such as tracking and tracing employees who had resigned and were in debt.
A team of Gauteng officials led by finance and economic development MEC Lebogang Maile briefed the committee on the province’s auditor-general outcomes and budget allocations for the next three years.
Ncunyana said the province’s financial resources were under severe strain.
By end-May only 9% (R757m) of the total R8.4bn revenue to be collected in 2025/26 had been collected. Main sources of revenue for the province include motor vehicle licence fees, interest on surplus funds, gambling taxes and liquor licences.
“Due to the current economic conditions and other challenges we have experienced, these resources are under severe financial strain and as a result in the first quarter of the current financial year we have only been able to raise about 14% of the revenue we were targeting for the first quarter,” said Ncunyana.
The biggest challenge was motor vehicle licence fees, with the province able to raise only about 5% of the revenue target for the quarter.
Ncunyana said the provincial treasury had six pillars to its revenue enhancement strategy: debt collection, addressing leakages in revenue collection, exploring new sources of revenue and funding, diversifying investments and amending regulations and/or legislation to introduce new sources of revenue.
These could include parking fees at service delivery points such as hospitals, the commercialisation of provincially owned properties — in some cases their disposal — and the introduction of new tariffs.
One of the initiatives she added was to take over the banking functions from municipalities that were not surrendering the monies owed to the province timeously. This would enable the province to realise revenue as soon as transactions were recorded. Back office processes were also being automated.
Ncunyana noted that the province was not deriving revenue from online betting, unlike other provinces such as Mpumalanga and Western Cape. To do so would require regulatory amendments.
New sources of funding being explored included the leveraging of international and domestic grants and the use of public private partnerships.
Municipalities and the Road Traffic Management Corporation (RTMC) had only paid R334m of the R809m due by end-May for motor vehicle licence fees, with the metros of Ekurhuleni and Tshwane making no payments at all in the period to end-May. They owe R181m and R162m respectively.
Ncunyana also highlighted the net patient debt of R3.8bn outstanding as at end-February 2025, with R3.2bn having been outstanding for 181 days or more. She noted most of this debt would have to be written off.
The total property debt at end-March was R132m with debt from residential tenants amounting to 7.5% (R89m) of the total debt book and commercial properties R42m.
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