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Here's how government plans to spend tax money better — and who gets extra cash

Caiphus Kgosana Executive editor: opinions and analysis
Finance minister Tito Mboweni delivered his medium-term budget in parliament on Wednesday. File picture.
Finance minister Tito Mboweni delivered his medium-term budget in parliament on Wednesday. File picture.

The National Treasury has called for “high-level policy discussions” on the size of government departments and public entities; financial support for students in the higher education sector; housing delivery programme; and subsidies to urban transport modes.

It also wants urgent talks on containing the public sector wage bill.

The Treasury has since June conducted more than 30 reviews of government spending with a view to increasing efficiency of the state. Preliminary findings show that:

  • many policies are designed and adopted without considering their total costs and affordability;
  • multiple institutions share overlapping responsibilities, or mandates, leading to a duplication of work; and
  • in several high-spending procurement areas, including information technology and communications technology, government is overpaying for goods and services.

“Spending on government programmes has exceeded annual revenues for more than a decade. The persistent gap between spending and government revenue requires difficult decisions about the structure, effectiveness and affordability of certain programmes,” it said.

The National Treasury is adopting zero-budgeting processes where government departments have to justify from scratch each programme they spend on, to determine if it provides value for money or should be scrapped.

Learning and culture continue to receive the highest allocations of government’s consolidated spending of R2.1-trillion in the 2020/21 adjusted budget. The sector receives R400bn which will go towards improving basic education, post school education and training, arts, as well sports and recreation.

Economic development and community development received the highest increase in allocations at 4.6% and 4.3% respectively to make up for increased spending in upgrading infrastructure and expanding access to basic services such as water.

Other in-year adjustments include an additional R36bn towards Covid-19 relief interventions announced in 2020.

Eskom gets the R23bn it is due as part of R350bn in government guarantees; SAA gets R17bn to pay its debts and implement a business rescue plan; while the Independent Communications Authority of SA (Icasa) gets R84.7m to begin licensing high-demand spectrum.

Meanwhile, the presidency has scored R12.6bn to address youth unemployment. R9.9bn of that goes towards the employment of 344,000 unemployed youths who passed matric, as school assistants around the country; R1.9bn to create work opportunities in line departments; R1bn to retain self-employed food producers in the agricultural sector; R630m for provinces to create jobs through road maintenance projects; and R393m towards the recruitment of community health-care workers and nurses.

The department of social development has been allocated R6.8bn to extend the special Covid-19 relief of distress grant.


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