High-level talks over drastic budget cuts are on the cards between Finance Minister Enoch Godongwana and Western Cape Premier Alan Winde after the provincial government declared an intergovernmental dispute.

The decision to lodge the dispute stems from the centrally negotiated and agreed public sector wage bill, which was implemented after the Western Cape parliament had approved its annual budget.

The province says the effect of the wage increase meant a hike in the Western Cape's wage bill of R2.9-billion, which it simply cannot afford.

National Treasury confirmed to News24 that it received a declaration of the intergovernmental dispute from the Western Cape government regarding the funding of the 2023 wage agreement.

"Both the ministers of finance and public service and administration will engage with the Western Cape government to discuss all salient matters related to the dispute raised, as required by the legislation," Treasury said.

On Thursday, Winde addressed the provincial legislature, during which the 2023/24 adjustments budget was debated.

"We have declared an intergovernmental dispute. This was not an easy decision to make. However, we have no choice. Our message to President Cyril Ramaphosa is simple: Give us the R1.1-billion shortfall owed not just to us, but to our residents too, or we will have no option but to meet you in court," he said. 

Winde said a deeply constrained fiscus had placed the province under immense pressure.

"Devastating in-year budget cuts, forced on us by a callous national government, will make it even more difficult for us to take our successes forward. Make no mistake about it, this fiscal calamity will be devastating," he said. 

At the same time on Thursday, the City of Cape Town joined Winde's call as it tabled its adjustment budget for the 2023/24 financial year. 

In the budget, R37-million was slashed from the Informal Settlements Upgrading Partnership Grant and R70-million was cut from the Urban Settlements Development Grant.

Cape Town Mayor Geordin Hill-Lewis tore into the National Treasury's decision to implement budget cuts.

"Cabinet ministers never have to explain to people why the housing project that was budgeted for in February has been bulldozed from the budget in November.

"These cuts may look just financial, but they are cuts to the dignity of real human being, people with families and responsibilities, and very few options in life. It isn't right," he said.