South African Finance Minister Enoch Godongwana presents the Budget on Wednesday, February 21, 2024 in Cape Town, South Africa.Photographer: Dwayne Sr./Bloomberg via Getty Images
MThe government tax revenue collected will be used to pay the social wage bill over the next three years, with additional spending allocated to increase the salaries of essential workers such as teachers, nurses, doctors and police officers.
A review submitted on Wednesday said the budget “strike a prudent balance between fiscal consolidation and development”, with 60.7% of consolidated non-interest spending on average continuing to include health, education and social protection. The money will be allocated to the social wage bill. , community development and employment programs.
Of the overall R1.73 trillion in revenue collected, R1.206 trillion, or R6 out of every R10 collected, will be spent on the social wage bill in 2024-2025.
The Budget reverses some of the spending cuts announced in the 2023 Medium-Term Budget Policy Statement by adding R57.6 billion to medium-term spending, primarily to cover the cost of the 2023 Civil Service Pay Agreement. It is something.
Additional spending of R18.6 billion in 2024-25, R19.2 billion in 2025-26 and R19.8 billion in 2026-27 is proposed, with additional spending for teachers, nurses, doctors, police officers and many other civil servants. This will ensure that your salary is covered. for. Spending on social transfers is expected to increase from R283.4 billion in 2023-24 to R331.5 billion in 2026-27.
“Slower economic growth means the pace of poverty reduction is slowing, and poverty reduction may be reversing, largely due to a lower share of the working-age population being employed. “The impact of these trends was partially offset by continued increases in public spending on social grants, public employment programs and the broader social wage,” the budget review said.
“Education, health care, and law enforcement are among the most important functions of government, and providing them requires significant numbers of teachers, nurses, and police officers.
“In providing these services, governments must make important policy decisions regarding the number of people employed to perform these functions and their remuneration. There must be an adequate number of staff. They must be compensated appropriately, taking into account their skills, experience and role.Real budget constraints mean that there is an unavoidable trade-off between the number of employees and their working conditions. It means that.”
HR facilities in most government functions remained flat at around 1.25 million people over the period covered, while average remuneration rose from R147,000 in 2008-2009 to R456,000 in 2021-22, at R7.2 per year. %Rose.
“Despite these difficulties, and despite increased spending, it is difficult to justify the general claim that productivity levels in the public sector have clearly improved over the period under review,” the document said. states.
“Trends in crime, for example, paint an unfavorable picture for the performance and productivity of police and the justice system, but these trends cannot be entirely attributed to changes in the quantity or quality of police.”
However, the situation is not completely bleak, the document notes. For example, although educational outcomes are low compared to global standards, they are higher than in 2010, with some exceptions, and more learners are enrolling with mathematics and mathematics education. Science.
Similarly, life expectancy continued to increase, at least until the onset of COVID-19, largely because HIV/AIDS control programs rolled back the worst effects of the early pandemic.
In order to cover the carryover costs associated with the implementation of the civil servant wage agreement in 2023,
Additional funding has also been allocated in the 2024 budget, primarily in the education and health sectors.
R105.5 billion will be donated to rural areas over the next three years.
Providing additional funding to ease these wage bill pressures freed up resources for capital investment and goods and services. R3.9 billion, which was previously added to the state's fair share in wage bill costs, has been transferred to conditional grants for the education and health sectors. Additionally, cuts previously made to some subsidies have been reversed.
According to the document, the Finance Committee emphasized the importance of factoring the real cost of public sector wage bills into the budget, and that ministries and agencies should exercise control over pay systems and that executive authorities re-emphasizing the importance of ensuring operations are within budget. vacant post.
“Incorporating real costs into the budget, as stakeholders have been increasing each year, should be the preferred approach going forward,” the review said.
The report said during the 2022 Civil Service Labor Summit that the wage negotiation cycle should be aligned with the budget process, and that ideally wage negotiations should conclude before the next budget is finalized. He pointed out that the company had reached an agreement with the labor union. Fiscal year to ensure the reliability of the fiscal frame.
“Given the expected increase in government spending, the committee recommends a prudent approach to managing spending without sacrificing service delivery,” the review said.
“It proposes implementing efficiency measures across government to ensure that allocated funds are used effectively and to optimize the impact of spending on social welfare and economic development. [The national treasury] They must take greater responsibility for ensuring spend quality and performance across departments and organizations. ”