Madeleine Wackernagel
HOW to keep spending under control without dramatically raising taxes? Trevor Manuel seems to have managed to walk the Budget tightrope with relative ease, although next year’s revisions may tell a different story.
Expenditure in the 1997/98 Budget increases by 6,1% over last year’s revised spending total to R186 747-billion, while revenue is tipped to rise 11,1% over the revised figure for 1996/97 to R161 976-billion, leaving a Budget deficit, as stipulated in the growth, employment and redistribution (Gear) strategy, of 4,1%.
More important than the numbers, however, is the allocation, and true to his Gear principles, Manuel seeks to ensure redistribution is put into effect. Thus, 55% of non-interest spending goes to the social services: R40-billion for education; R20-billion for health; R18-billion for social security and welfare; and R4-billion for housing.
In addition, R300-million is set aside for community-based poverty relief programmes, with emphasis on rural areas and helping women; social security provision is increased by R1-billion; and R75-million goes towards a flat-rate child support benefit, to replace the existing maintenance grant.
The biggest beneficiary is education, winning 21,3% of total government expenditure (6,5% of gross domestic product), which is way over the international norm for developing countries but testimony to the ground that has to be made up in the wake of apartheid era inequities. Tertiary education will also gain, with R5,4-billion of the national vote of R5,5-billion.
A big loser in this year’s Budget – again – is the South African National Defence Force. Its apportionment is down 6,5%, to R9,579-billion. In the reprioritisation away from defence, however, crime prevention is high on the agenda. The South African Police Service gets 20,6% more, or R11,919-billion, while Correctional Services gets 28,1% more, R3,32-billion.
Othe big beneficiaries are Home Affairs, with R520,4-million, which includes R93,3- million for a new identification card system; Housing, which receives R4,038- billion; and Justice, with R1,812-billion. Direct comparisons with last year’s Budget allocations are misleading, however, because in the case of health, for example, expenditure programmes have been devolved to the provinces, resulting in reductions in the national Budget measure.
In addition, Reconstruction and Development Programme spending is provided for through the normal budgetary process, with R4,378- billion set aside this year. These projects include the primary school nutrition programme, clinic building, school building, urban renewal, and support for improving the policing and criminal justice system, including the establishment of the first victim-support centre in Port Elizabeth and community safety centres.
Market reaction to the spending plans was favourable. Said one analyst: “Without unlimited funds at his disposal, Manuel did some dextrous juggling, cutting the normal things, like defence, while still keeping within the framework of Gear. But what we’ll be watching for now is that the money is effectively spent on delivery.”