Download Appropriation Bill

2015 Appropriation Bill
Date: 13 May 2015
Overview
• Education
• Health
• HIV/AIDS
• Governance & Service Delivery
• Economy
Enhancing the effective and efficient utilisation of
financial resources in Education
International comparison of spending on
education
Country
India
USA
Brazil
Norway
Kenya
UK
Australia
South Africa
2015
Public spending on Public spending on Expenditure per
Expenditure per
education, total (% education, total (% student, primary (% student, Secondary
of GDP)
of govt. expenditure) of GDP per capita) (% of GDP per capita)
3.8
12.9
9
15.5
5.2
13
20.9
23.9
5.8
14.6
21.1
21.6
6.6
15
19.9
26.2
6.6
23.8
6
13.1
26.4
31.5
5.1
13.5
20.1
17.9
6.3
19.6
19.4 (2013)
21.6 (2013)
SACMEQ III (2007): Comparison between South Africa and Kenya
Scores
South Africa
Kenya
Reading score
495
543
Maths score
495
557
Functionally illiterate
27
8
Functionally innumerate
40
11
4
Employee compensation as a % of the total
allocation (2014 estimates)
Province
KZN
EC
FS
GP
LP
MP
NC
NW
WC
TOTAL
Total appropriation for
Education (R mil)
39 445 18 5
27 934 964
11 258 854
32 845 229
24 964 160
16 102 831
4 744 333
12 422 999
16 424 944
186 143 499
Compensation of
employees (R mil)
28 746 139
21 976 007
7 971 147
22 082 190
19 315 759
11 939 540
3 416 818
8 844 040
11 627 354
135 918 994
%
72.9
78.7
70.8
67.2
77.4
74.1
72.0
71.2
70.8
73.0
• The proportions for salaries are high, but newly qualified educators
and those with less than 5 years experience earns on average R 115
76 and Teachers with 5 to 9 years experience have salaries between
5
R124,038 and R146,087 per annum.
Relationship between achievement and proportion
of budget spent on salaries
6
Student funding in higher education
• Over the medium term: R19.9 billion will be spent on
student loans and bursaries to support 711 355 students
in higher education institutions and 844 842 in TVET
colleges
• For 2015/16: R7,4 bil down from R8.5 bil in 2014/15
• NSFAS has developed a negative reputation due to:
• Insufficient funds to meet the number of students
• Late payment to students
• NSFAS mechanism for disbursing funds to students must
be improved.
Health Budget 2015
Allocation
Amount R
(bn)
District Health Services
Provincial Hospital Services
Other Health Services
66.7
30.2
26.4
Percentage
Growth relative to
2014/15
7.6
6.3
18.2
Central Hospital Services
Facilities Management and
Maintenance
TOTAL
25.9
8.1
5.9
9.7
157.3
8.8
Sources of Funding –Health Sector
Sources of Health Financing FY 2013/14
1%
1%
2%
1%
Public sector
7%
National Department of health core
Provincial Departments of Health
Defence
Correctional services
Local government (own revenue)
43%
Workmens Compensation
Road Accident Fund
Education
40%
Medical schemes
Out of pocket
Medical insurance
Employer private
Donors or NGOs
1%
2% 0%
1%
1%
0%
Provincial Expenditure 2009-2014
Provincial Health Expenditure
2009-2014
140,000
Health Facilities
Management
Expenditure in million Rands
120,000
Health Care
Support Services
100,000
Health Sciences
and Training
80,000
Central Hospital
Services
Provincial Hospitals
Services
60,000
Emergency Medical
Services
40,000
District Health
Services
20,000
Administration
0
1
2
3
4
5
• Overall expenditure increased
across programmes except admin
• Focus on PHC re-engineering
should see a disproportionate
increase in district health services
expenditure
• Hospitals continue to consume
significant proportion of resources
– hospicentric resource allocations
• Expenditure on health sciences
and training has increased
significantly but this need to be
more than doubled to meet the
country’s HR needs
Public Funding priorities to follow NDP focus
areas, e.g.
• Increasing life expectancy to 70 years by 2015;
• Having a generation of under 20’s free of HIV and
AIDS;
• Reducing maternal and child mortality;
• Significantly reduce the burden of diseases both
communicable and non-communicable;
• Implementing the National Health Insurance (NHI)
in phases, complimented by relative reduction in
the cost of private healthcare, supported by better
human resources and systems.
Strong case for investing more in• HIV and AIDS- prevention and management
• Maternal and Child Health to reduce maternal and child mortality (MDG
4&5);
• Communicable and non-communicable;
• Health systems strengthening including:
• Human resources for health – training of health workforce
• Quality improvement in the public sector- OHSC
• Health infrastructure and management – new infrastructure and
maintenance
• Regulation of the private sector – for effective stewardship of the
sector (CMS/NDoH)
• National Health Insurance (NHI) – scaling up pilot activities including
testing resource mobilisation, pooling and strategic purchasing of
services
• NB: FUNDING FOR UHC KEY!!
HIV/AIDS
• The government must be commended for
contributing about 80% of the cost of the national
HIV response hitherto. This is one of the highest
levels of national contribution among the high
priority countries for HIV/AIDS.
• A health budget of R36.46 billion has been
allocated for the new financial year. This is an
increase of 7.4% when compared to previous
financial year
HIV/AIDS
• According to the National HIV Household Survey
South Africa 2012, HIV prevalence in the total
population: 12.2%
(2008: 10.6%)
• 6.4 million living with HIV/AIDS
• Apart from attributing this to the success of the
antiretroviral (ARV) treatment programme, this also
showed that there was still a large number of new
infections of around 400 000 still occurring at the
time.
ART rollout in South Africa
(L. Johnson, SAJHIVMED 2012)
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2004
2005
2006
2007
2008
2009
2010
2011
HIV/AIDS
• To date, nearly 3 million people are currently on ART
treatment.
• The coverage from this year onwards will increase by
another 2 million or so South Africans due to the new ART
guidelines which call for the increase in the threshold from
350 to 500 CD4 cells/mm3 for initiating treatment which
have been adopted since the start of this financial year.
• In order to accommodate this, one of conditional grants
aimed at assisting provinces to implement the
Comprehensive Plan for HIV and AIDS has been increased by
45% from R782 million in 2004/05 to R1.135 billion this year.
HIV/AIDS
• There has been some mixed results in terms of the progress
the country is making in the fight against HIV/AIDS.
• The country continues to make some tremendous progress
in getting the population tested for HIV but however, there
appears to have been less gains in prevention as shown in
the drop in condom use at last sex in 2012 when compared
to 2012.
• This suggests the need to re-double our efforts the fight on
the prevention of new infections.
Awareness of HIV status among those who tested in the
last 12 months, by sex (15 years and older), South Africa
2005-2012
Condom use at last sex by age and sex,
South Africa 2002-2012
HIV/AIDS
• It is also commendable that some funding continues to be
provided to some HIV/AIDS NGOs such as loveLife and Soul
City.
• Of some great concern is the fact that SANAC’s budget was
only R15 840 000 which is clearly inadequate granted the
important role SANAC plays in coordinating the multisectoral national HIV response.
HIV/AIDS- Other departments
• It is also pleasing to note Social Development also includes funding for
NGOs working in the HIV/AIDS sector.
• DHET also has allocated R7 761 000 to HEAIDS. Once again HEAIDS
deserves a much higher allocation granted its mandate in coordinating
the HIV response in universities and further education training colleges.
• Finally, DST has also allocated some generous funding for innovation in
HIV, STIs and TB research which is also highly commendable.
• Indeed, if we are to win the war against HIV/AIDS, STIs and TB we need
to increase funding to NDOH, DSD, DHET and DST as donor funding is
reduced during the next few years due to the middle income status of
the country.
Improving Governance and Benefits to
South African Society
Social science that makes a difference
Satisfaction with different areas of government
performance
•
•
•
•
•
•
•
Social grants, electricity and education recorded the highest levels of satisfaction
relative to the other indicators for both 2011 and 2012.
In general South Africans are satisfied with the way that the government is
handling education. In 2012, 61% of all adult South Africans registered satisfaction
with the government's management of education and only 27% indicated that
they were dissatisfied with the state’s performance. This does nonetheless
represent a 10% drop in satisfaction over the last two years.
Satisfaction levels in terms of electricity have been dropping since 2003 with 2012
showing a minor increase of 2% (61% in 2011 compared to 63% in 2012).
Although satisfaction levels of HIV/AIDS treatment is slightly down in 2012 (56%) compared
to 2011(61%) it still displays a reasonable level of satisfaction particularly in the last three
years (2010 – 2012).
Satisfaction levels with regards to water and sanitation; and refuse removal continues
to receive consistent ratings since 2003 until our latest survey in 2012.
The level of satisfaction to access to health care is up by 6% from 2011 (51%) to
2012 (51%).
The areas of greatest public concern continue to be job creation (14% in 2011 but
now 7% according to the 2012 survey), crime reduction (32% in 2011 and 20% in
2012), and low-cost housing (32% in 2011 and 35% in 2012).
Satisfaction with different areas of government performance
(Source: SASAS 2003 – 2012)
Table 1: Level of satisfaction with different areas of government performance, 2003-2012 (% satisfied or very satisfied)
2003
2004
Social grants
2005
2006
2007
2008
2009
2010
2011
2012
70
73
70
72
71
77
72
72
69
69
74
68
70
66
60
Education
Electricity
66
70
67
70
64
67
67
67
61
63
Water & sanitation
61
62
59
57
60
59
57
59
57
58
Refuse removal
60
55
53
55
51
54
52
52
49
51
Access to health care
43
50
50
53
56
53
50
53
51
57
HIV/AIDS Treatment
27
36
43
38
47
45
45
54
61
56
Affordable housing
34
37
31
28
32
33
32
34
35
32
Land reform
26
32
32
30
35
28
31
33
30
23
Crime reduction
22
26
22
18
17
18
18
27
32
20
8
11
9
8
8
9
10
12
14
7
Job creation
Governance through Traditional Affairs
Provision is made for
• the promotion and coordination of research and information management and the
development of policies and legislation on traditional affairs;
• Coordination of institutional development and capacity building programmes to enhance
efficiency and effectiveness within the institutions of traditional affairs.
Research points to:
• Taking into account that about 15 million poor rural people live under traditional leaders, the
allocation of R1 19 447 is very low.
• The reality most funding goes to salaries and stipends for traditional leaders. These leaders
are requesting additional and increased stipends to equal with public service. This will place a
huge pressure on the fiscus, and leaves less funding for development of traditional
institutions of governance
• There is a dire need for research on the relationship between traditional leadership,
traditional councils and municipal councils to ensure synergy in local development. Such
research will partly resolve the contestations around traditional leadership originating from
civil society organisations
• Extensive capacity building of traditional leaders requires appropriate research and
development which takes local community context as focus
Improving Rural Development
• The allocation makes provision to catalyse, initiate, facilitate
and coordinate the implementation of a comprehensive rural
development programme, leading to sustainable and vibrant
rural communities.
• The allocated amount of R1 345 679 seems low in comparison
to the needs for infrastructure, economic development and
youth development
• Research highlights the need for increased integrated
comprehensive rural development projects, and M&E
systems to measure performance and develop appropriate
models
Solidification of Separation of Powers
First time MTEF that the Office of Chief Justice has its own
mandated budget separate from the Department. It
consequently:-
• Entrenches independence of the judiciary and the
Constitutional Court.
• Provides strategic leadership, management and support
services to the DOJCD.
• Secretariat and administrative support services to the JSC.
• Judicial Education and Research
Findings emerging from Research
Varying understandings of democratic principle of separation of
powers.
• Arguments emerging that support a flexible interpretation:
public “Constitutional Dialogue” where all the arms of
government and civil society share ideas about how to create a
better life for all.
• Most agree that Courts should be independent and play a role
in constitutional transformation, but courts cannot implement
their own judgments – legislature and the executive must
comply.
• Compliance is necessary to entrench respect for the rule of law
in SA.
• Civil society and NGOs are primary funders in socio-economic
rights cases. Donor funds are drying up - unsustainable unless
Chapter 9 institutions e.g. SAHRC play a more supporting role.
• Some members of the legal profession make significant
contributions to pro bono work but severe limitations in the
current system. eg low number of hours allocated to Advocates
and reluctance to monitor pro bono litigation.
• Mandate of Legal Aid Board should be expanded to deal with
socio-economic rights.
• Alternative dispute resolution offers potential for resolving
disputes around service delivery, but results cannot be used as
enforceable legal precedent, and costs tend to be high.
IMPROVED PUBLIC SERVICE
• Capable State required to achieve goals in the NDP – directed at infrastructure-led
growth and development of the economic, physical and social infrastructure
• improving investigative abilities of institutions to combat corruption, recent release
the Supply Chain Management Review, ongoing cost containment measures and
various capacity building programmes
• What is required is support for these initiatives and implementation from whole of
government
• Bill identifies a number of measures to improving capability to implement infrastructure
projects
• Built environment performance plans introduced to incentivise integrated planning
and implementation across built environment functions located in municipalities.
• The focus should be on a more holistic approach to capacity building if
infrastructure projects are going to succeed (E.g. single capacity support
programme per municipality)
• Number of policy proposals in the Bill to fund research to identify future skills gaps in the
labour market
• Should not neglect demand-side factors to encourage uptake of labour, especially
among youth and the forecasting of future skills required in the public sector
Fiscal Consolidation Risks
• Budget Appropriation encourages fiscal consolidation and balance.
There are potential key risk areas that may serve to unsettle the
balance attained in the 2015 Budget:
– Public sector wage bargaining process outcome, particularly if the outcome
significantly exceeds inflation
– Implementation of the National Health Insurance (NHI)
– Social security reforms in the 2015 Budget Speech
Conclusion
• Appropriation consolidate the fiscal position of direct servicedelivery to citizens
• Investment in infrastructure-led growth considered to provide
benefits and spillovers in to economic development and social
development of citizens
• Improvements in performance monitoring and evaluation
through the various mechanisms such as Presidential
Infrastructure Commission
The Economy
Context
• Economic slowdown: 1.4% - 2014; 2% - 2015
• Weak global economy with uncertain outlook
• High government debt (24% of GDP (2009) up to 45%
now)
• Large budget deficit (4% of GDP)
• Growth of debt servicing of 10% p.a. since 2009
• Growth of public sector staff and wages (15% p.a.)
• Poor investment climate, weak business & consumer
confidence, energy crisis
• Little room for manoeuvre
Overall assessment
• Shift in approach from recent counter-cyclical spending –
modest tax rises + slowdown in spending
• Tax increases
• Personal incomes tax (up 1% for people earning over R182,000
p.a. – 1st time in 2 decades)
• Fuel levy (up nearly R1 per litre)
• Slowdown in public spending growth
• 2% reduction in budgeted expenditure (R25bn)
• Freezing public sector head count
• Tougher approach to managing state entities (eg SAA)
including sale of non-core assets (eg property)
Infrastructure
• Long-standing theme – NGP, NDP, PICC
• More effort to encourage private investment in
infrastructure projects
• Yet major construction companies complaining
about lack of new contracts
• July conference on infrastructure investment
opportunities
• More focus on infrastructure maintenance
New emphasis on cities
• “Well-planned and well-managed urbanisation can
accelerate economic growth”
• “Realising the economic dividends of urban growth requires
a new approach to providing infrastructure, housing and
public transport services, while overcoming the spatial
divisions of apartheid”
• A new approach to local government infrastructure
financing over the next 3 years – to support integration
• Treasury will work with financial institutions to expand the
municipal debt market
• Support metros to do public-private partnerships
Framing questions about the budget
1. The overall level of public expenditure
2. The balance between investment and consumption
expenditure
3. The quality of public expenditure
4. The balance between national, provincial and municipal
spending
5. Encouraging creativity and innovation