Pat Sidley
Despite difficulties which will become more evident when the provincial budgets are announced and debated in the coming weeks, and a presentation which many regard as “messy”, the budget presented this week in parliament is designed to begin the process of redressing wrongs.
Not only has a larger proportion of the budget than before been devoted to social spending such as health, education, housing and welfare — but the way in which the money is to be spent in the coming year will show a shift in priorities towards those prejudiced by years of apartheid spending.
Obvious overall shifts in spending have occurred which illustrate changing priorities, so that defence has been cut, while housing has received a huge increase.
While defence received less money overall, it also occupies a smaller slice of the budget (down from 8,7 percent to 7,2 percent). Housing was just over one percent of the previous budget and now is close to three percent. The costs of running the government now occupy a smaller proportion of the budget than last year — down from 8,9 percent to 6,9 percent.
The health budget most clearly shows how money has been shifted to reflect shifting priorities.
The total amount for health services budgeted for 1995/96 also includes another important mechanism for redressing the problems of the past — the use of the RDP fund and other funding sources in needy areas (the clinic building programme is using foreign donor funds as well as RDP funding).
In health spending, in addition to the amounts allocated through the normal budgeting process and the provincial allocations, extra provision is made for the continuing costs of providing free health care for pregnant women and children under six, the clinic building programme and the primary school nutrition
In both health and education, the shift in priorities for spending as well as the devolution of power (and money) to the provinces will mean that certain provinces (the more rural, poorer provinces without large concentrations of comparatively wealthy populations) will gain resources.
But this will be at the expense of the more heavily populated provinces (Gauteng and the Western Cape) which have traditionally had much more public money aimed at them to sustain their larger privileged
In both health and education, formulae were devised to move the money around — but in some areas, rigid application of the formulae may lead to hardship, such as Gauteng and the Western Cape. In those two provinces, for instance, cutbacks in education spending mean that thousands of teachers may find themselves without jobs.
Western Cape’s minister of education Martha Olckers has already made it clear that she will have to retrench. Her counterpart in Gauteng, Mary Metcalfe, while conceding that she will not have the budget to cope with many teachers’ salaries, says she will not retrench. She will rely instead on the mechanisms and dialogue provided by the department of finance to find a way around the problems which will be created by the budget cuts.
The Minister of Health Dr Nkosazana Zuma has indicated that effective budget cuts in those provinces will be ameliorated by using mechanisms provided by the RDP fund and in consultation with the department of finance to provide extra finance to cover the gaps left by the re-allocation of resources.
Deputy Minister of Finance Alec Irwin told the Weekly Mail and Guardian last month that mechanisms had been created by this budget to cater for any hardships that might arise out of changes in priorities and resource
While many economists found these hard to find in the somewhat messy budget (as accountants and economists perceive it) they eventually came to light in several places.
The full picture of the budget, however, will not become clear until the provinces present their budgets in coming weeks.