Tuesday 28 May

22 February 2023, Johannesburg – In an effort to alleviate load shedding in the country, Finance Minister Enoch Godongwana has announced that government will take on more than half of Eskom’s debt at R254 billion. SECTION27 notes that we are a country desperate to resolve the energy crisis, particularly in South African hospitals and health facilities. It is the most marginalised South Africans bearing the financial burden.

In his speech, the Minister said that “eradicating poverty, inequality and unemployment is as urgent, if not more than it was at the dawn of our democracy almost 30 years ago.” Yet the government continues to make decisions that deepen inequality, particularly in the areas of basic education and health care services.

South Africa is a nation shouldering two concurrent states of disaster, an energy supply crisis and extreme flooding in seven of nine provinces. This has only aggravated unemployment, currently at 31% on the narrow definition, and stifled economic recovery. One impact of these challenges is a rising number of South Africans who rely on the public health care system.

SECTION27 is disturbed to find that funding for health care has not been adjusted to account for this rising demand for services as well as Consumer Price Index (CPI) inflation, projected at 4.9% in the 2023/24 financial year. Consolidated spending on health was R259 billion in 2022/23 and will remain at this level in 2023/24. This equates to a real reduction on health care spending of -4.9%.

With the number of people without medical aid increasing at a rate of 2.2% per year (much higher than the population growth of 1.3%), this funding approach results in spending per health care user reducing from R5,028 in 2022/23 to R4,605 in 2023/24 (constant 2022/23 Rands). Furthermore, the extreme austerity budgeting in health is set to continue in 2024/25, with a further reduction in spending per health care user to R4,453.

National Health Insurance funding is reduced significantly and redirected to expenditure on a new central government hospital in Polokwane. The annual spending on medical aid schemes per privately insured individual equates to about five times the amount spent per public sector patient.   Yet, none of the Health Market Inquiry (HMI) recommendations have been implemented – recommendations that could reduce the cost of living for private medical users significantly. Between the lack of movement on NHI and the failure to implement HMI recommendations, much-promised health system reform is elusive.

Other neglected areas of health funding include mental health and oncology. It bears noting that the backlogs in these areas precede the COVID-19 pandemic. While we welcome the efforts to reduce oncology backlogs, without clear and direct funding for cancer and mental health, the state will remain in a perpetual state of financing backlogs. A major contributing factor to these backlogs is a lack of investment in infrastructure and personnel. Investment in health personnel has been reduced by -5.4% in real terms in 2023/24, and funding for health infrastructure is stagnant, despite promises to assist public health facilities to adjust to load shedding and the increased risk of environmental disasters.

This funding will be insufficient to allow the public health care sector to recover from the backlogs created by the COVID-19 pandemic, and to fill the thousands of personnel vacancies that exist throughout the public health sector. We call on Parliament to question the wisdom of these drastic cuts to health care funding when it considers the budget in the weeks ahead.

In Basic Education, overall funding increases from R302 billion in 2022/23 to R309 billion in 2023/24. This 2.5% nominal increase equates to a real terms reduction in basic education funding of -2.4% once CPI inflation is factored in. On a per learner basis, this equates to a reduction of funding from R22 552 per learner in 2022/23 to R21 630 per learner in 2023/24 (constant 2022/23 Rands). As in health, funding for basic education will continue to be squeezed into the medium term, with a reduction of funding per learner in 2024/25 to R20 800.

While the sector has been spared an even more dramatic decrease in funding pencilled in by the Minister in the 2022 Medium-Term Budget Policy Statement (MTBPS), SECTION27 challenges the claim that the small upward adjustment compared to the MTBPS projections will allow provincial education departments and public schools to hire teachers and procure education materials and equipment needed to enhance the quality of education available to the majority of South Africans.

This choice to cut social spending in real terms over the medium term to make fiscal space for debt servicing and Eskom’s support package means that the government has chosen to disinvest in the education and health care systems, and to extend former deputy president, Phumzile Mlambo-Ngcuka’s characterisation of this state from “load shedding our children”.

The Minister’s assertion that there is “no austerity” is patently wrong when one considers the real reductions to spending on programmes as crucial as the School Infrastructure Backlogs Grant, the HIV/AIDS Life Skills Grant; Maths, Science and Technology Grant; the Early Childhood Development Conditional Grant and the Learners with Profound Intellectual Disabilities Grant in 2023/24. However, we welcome the Education Infrastructure Grant’s (EIG) increase of 11% in 2023/24 to R13.8 billion, which should allow provinces to build, repair and maintain school infrastructure and the infrastructure damaged by flooding in KwaZulu‐Natal and Eastern Cape. However, it is unclear whether the increase in EIG funding will be sufficient to address the severe school sanitation backlogs, or those infrastructure projects that have remained suspended since 2020 due to the COVID-19 pandemic, as seen in provinces such as Limpopo.

Funding for the National School Nutrition Programme (NSNP) increases by 9.1%. While this amount is higher than the food price inflation recorded by the National Treasury of 7.0%, we caution that the most recent StatsSA data point to a 12.4% increase in the price of food and non-alcoholic beverages, indicating that funding for the NSNP may need to increase further if the more recent higher levels of inflation continue.  The NSNP is a crucial programme in the basic education system feeding more than 9 million learners with nutritious meals daily.

SECTION27 calls for a budget that protects the constitutional rights of everyone in South Africa. The aggressive fiscal consolidation path implemented in recent years has resulted in significant shortfalls in funding for the rights to basic education and health care, among others. This year, the cuts continue. We call on Parliament to apply the maximum scrutiny to these funding cuts when it considers the Minister’s proposals in the weeks ahead, and to ensure that every Rand diverted from the budget to Eskom’s balance sheet is spent on resolving load shedding.

Parliament should consider implementing participatory human rights impact assessments of the budget which focus on whether the government’s fiscal consolidation path is widening inequality and forcing the burden of trade-offs unfairly onto the backs of the most vulnerable members of our society, who rely on quality public schools and health care facilities to thrive.

SECTION27 intends to make submissions to Parliament’s Appropriations Committee elaborating on these concerns over the coming weeks.

SECTION27 welcomes the inclusion of our recommendations for Gender Responsive Budgeting in our submission to the Select Committee on Appropriations on the Division of Revenue Bill. We also welcome the consideration of our recommendations on the impact of climate change on human rights in the context of the increasing extreme weather events.

We look forward to participating in public consultations as it becomes workshopped and piloted ahead of the 2023/24 budget.

The European Union funding supports SECTION27 and the Centre for Child Law’s work in enhancing accountability in health and education in South Africa.

 

For information contact:

Pearl Nicodemus | nicodemus@section27.org.za | 082 298 2636

Categories: Budget

1 Comment

Budget 2023: Taking from the poor with R162 billion in expenditure cuts while breaking the President’s promises - Institute For Economic Justice · April 1, 2024 at 9:30 pm

[…] has very real implications, seen, for example, in health and education. In the 2023/24 financial […]

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