Government will not be receiving any additional money from Treasury’s Medium Term Budget Policy Statement (MTBPS), released today.
Instead, the state will need to tighten its belt and shift funds from under-performing areas to those that need it more.
According to the MTBPS, the reprioritisation of funds by departments over the next three years will amount to about R40 billion.This money, combined with draw-downs in the contingency reserve, will allow for the revision of budget baselines without any increase in government spending. Funds will be shared between national, provincial and local government, with the aim of enabling them to meet the higher costs of the public-sector wage settlement and give effect to government priorities.
The fiscus therefore did not increase available funds beyond the 2012 budget baseline.
Speaking in Parliament today, minister Gordhan said: “Our budget process has to take into account that we cannot do everything at once, and the economic outlook sets limits to what we can afford over the period ahead.”
He also stated: “In government, we are forthrightly confronting our difficulties. We assure out people that we will repair dysfunctional municipalities, we will try harder to connect book suppliers to schools,
Over the past decade, government spending, excluding inflation has doubled
Departments have been urged to reprioritise and not to spend on programmes that are not meeting performance requirements or that are not closely aligned to departmental mandates. Government has also asked national and provincial departments to reduce expenditure where possible over the medium term so that these funds can be reallocated to infrastructure and other priorities.
Over the past decade, government spending, excluding inflation, has doubled and while more basic services have been delivered, “there has not always been a commensurate increase in the quality of public services or in the performance of the public sector itself.”
This has lead Treasury to state that government departments will need to live within their means in order to serve the people of South Africa better.
According to the MTBPS, making progress in the delivery of public services requires greater focus on the use of existing allocations, and a shift in the composition of spending from current consumption towards capital investment. These changes are considered particularly important given current fiscal constraints.
– By Makalang Gift Mphokane and Christelle du Toit
