MTBPS 2023: Budgets must protect health care and education rights, now more than ever!

2 November 2023, Johannesburg – In the context of weak economic growth, lower-than-expected tax revenues collected and the implementation of measures to reduce public spending, the Medium-Term Budget Policy Statement (MTBPS) for 2023/24 has responded to this through budget cuts to health care and basic education, particularly to programmes characterised by underspending and wasteful and fruitless expenditure. SECTION27 recognises the importance of improving our country’s financial performance. However, without considering the human rights impact of these budget decisions, the most impoverished South African school learners and health care users will bear the burden of these cuts.

Health Care Budget Cuts:

On the surface, the 2% increase in health care from 2023/24’s proposed R259.2 billion to the MTBPS’s R264.5 billion appears to be positive for resourcing access to health care in the country, considering the under-resourced and underfunded condition of the public health care system. However, as the MTBPS Budget Review acknowledged, much of the gains in the allocation to health care investment will be eroded by inflation revised at 5.6% (for 2023/24 fiscal year) as well as rising demand for public health services.

Effectively, health care investment has been cut by 2.7% in real terms. Already the 2023/24 Budget tabled in February this year saw a 4.9% real term cut to health care and this MTBPS expenditure will only further constrain the resources available to provide quality health care services to the estimated 84% of people in the country who are not on medical aid and rely on the public health sector.

Most worrying is the proposed cut of R1 Billion to HIV/AIDS funding, a 4% cut from the Main Budget’s R23.9 billion to R22.9 billion for the 2023/24 financial year. This is especially concerning because our country’s risk and prevalence is the highest in the world. As such, the government committed to increasing the number of people who know their status, increasing the number of people diagnosed with HIV who receive antiretroviral therapy (ART), and increasing the number of people receiving ART with viral suppression by 2025 (the 95-95-95 goals). The country has made significant progress in achieving these goals, including allocating significant resources. However, a significant budget cut may regress our progress to ensure that 6 million people are on ART by the end of this financial year.

Health personnel funding has also suffered major adjustments with a real term reduction of 4.8%. While funding has been made available to cover wage increases, restrictions on recruitment will make it difficult to address the human resource needs in the sector. In addition to the hiring freeze, it is expected that the gaps in funding will be addressed through limitations on areas such as overtime payments, leaving the health care sector without the benefit of hiring additional staff or the ability to use its existing staff overtime to meet the health care demand of patients.

Basic Education Funding:

Far too many learners attend schools that are built from inappropriate materials, are unsafe, overcrowded, and lack adequate water and sanitation, all of which jeopardise the realisation of their right to a basic education. While the country has made significant progress in advancing this right, the budget cuts proposed by the MTBPS threaten further progress through the reduction of schools’ resources. The MTBPS proposes an overall adjustment of R10 billion to consolidated basic education expenditure, from the R309 billion proposed in the 2023/24 Budget in February to R319.7 billion. This 3.1% nominal increase equates to a real term reduction in basic education funding of 1.4%, once CPI inflation is factored in.

There are also significant budget cuts proposed to essential programmes including the HIV/AIDS Life Skills Grant (11.5% decrease from R241.7 million to R213.9 million) and Maths, Science and Technology Grant (11.5% cut from R443.0 million to R383.2 million).

SECTION27 is also concerned by the state’s reduction of the Education Infrastructure Grant (EIG) from 2023/24 budget’s R13.9 billion to R12.2 billion. SECTION27 welcomed the EIG allocation in February which showed an increase of 11%, well-above inflation, ensuring that provinces are in a better position to build, repair and maintain school infrastructure, including infrastructure damaged by flooding in KwaZulu‐Natal and Eastern Cape in the previous year. We welcome Treasury’s acknowledgment that the National School Nutrition Programme (NSNP) is an essential service and thus did not receive any budget cuts from the February 2023 budget. The MTBPS further acknowledges that food price inflation (at 10.4%) is well above CPI inflation (5.6%). Additionally, Stats SA has noted a welcome decrease in food inflation to 8,1% in October, although inflation for some essential food products remains higher (inflation for maize is at 11,9% and inflation for rice is at 18,6%). We encourage the Department of Basic Education to continue monitoring the quality and supply of the NSNP, particularly in KwaZulu Natal that saw disruptions to the programme earlier this year and is the largest recipient of the NSNP.

While we welcome additional allocations to the education sector to implement the 2023 public service wage agreement, the MTBPS acknowledges that provincial departments will be constrained in their hiring of additional teachers and we are concerned that this will exacerbate overcrowding and negatively affect the delivery of quality basic education. Worryingly, the MTBPS goes so far as to state that budget constraints could lead to “larger class sizes, higher teacher-learner ratios and possibly weakening education outcomes”, thereby deepening inequality in education provisioning.

Although we recognise that we exist in a global economic system underpinned by difficult trade-offs, we caution that eroding investment in the education of learners and health care services will likely have adverse consequences in the decades to come.

In this difficult economic climate, the power of fiscal policy must be wielded to protect the rights to basic education and health care for those who are most vulnerable. As such, SECTION27 calls for the implementation of participatory human rights impact assessments of the budget which compel the government to explain to the people of this country how it will ensure that the Constitutional rights of South Africans will be protected.

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

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 media queries contact: Pearl Nicodemus | nicodemus@section27.org.za | 082 298 2636