Finance MEC Mireille Wenger made this announcement during the province's Medium-Term Budget Policy Statement in the legislature on Tuesday, 28 November.
The national government concluded a wage deal of R2.9bn, one the provincial government says is short R1.1bn.
The province cannot afford to cover the deficit, premier of the Western Cape Alan Winde said.
The provincial government’s wage bill has been hiked to R2.9bn.
“That 1.1bn that’s short now has to come from service delivery or actually from frontline services that the citizens are supposed to get in this province, and therefore we have declared this intergovernmental dispute. We do not accept it,” Winde said.
The provincial government says it has raised numerous objections with the national ministers of finance and public-service administration.
Winde has given the national government until Wednesday, 6 December, to reply.