The South African Budget to be presented by Finance Minister Trevor Manuel on Wednesday is expected to be in the region of R363-billion according to the projections in the Budget Review of 2003.
The allocation of funds to be captured on the Division of Revenue Bill for the financial year 2004/05 will divide this amount among national departments, provinces — in terms of the equitable share and conditional grants — as well as local government, also in terms of equitable share and conditional grants.
The state debt cost is expected to be in the region of R53-billion and the contingency reserve about R4-billion. This will leave about R306-billion on “non-interest” allocations.
Of this national departments will receive about R117-billion — up from about R108-billion in 2003/04. Provinces’ share is expected to rise to R175-billion, including R155-billion in equitable shares and R20-billion in conditional grants. This will be a rise from R158-billion in total for the provinces in 2003/04.
In addition, local government will get about R13-billion including R7-billion in the equitable shares and just more than R6-billion in conditional grants. The total figure will be about a billion rand up from 2003/04.
Education spending is expected to remain the largest category of expenditure by national and provincial government.
Projections in spending show that education spending will rise from just less than R70-billion to R74-billion.
Social services, including education, health, welfare housing and community development, will make up more than half of consolidated spending — at a projected R190,7-billion — with welfare the second-highest spending category after education at a projected R55-billion. This is up from nearly R49-billion in 2003/04.
Last year’s review pointed out that while education remained the largest category of spending, health, welfare and housing would continue to grow “more strongly” in line with the broadening of social service priorities of the government.
Protection services is the second-biggest category with spending by national and provincial government expected to top nearly R63-billion — up from R58-billion. Spending on the police is expected to rise to more than R25-billion from R22-billion. Defence and intelligence is expected to rise to R23-billion from about R22-billion. The prison system is expected to cost about R9-billion.
Economic services, which includes construction, transport, fuel and energy, is the third-largest government spending category, which will be nearly R46-billion in the 2004/05 financial year. This is up from about R43-billion in 2003/04. Other general government services will cost about R24-billion in 2004/05 up from about R21,7-billion in 2003/04. — I-Net Bridge