Warning that SA’s low coronavirus vaccination rate poses a risk to the country’s economic recovery, Treasury has set aside an additional R2.25bn in this year’s budget for the country’s flagging immunisation drive. However, R1.3bn of this funding is provisional, highlighting government’s uncertainty about how many more doses will be purchased in the year ahead.
Covid-19 vaccines are free at the point of delivery and have been progressively offered to different population groups since February 2021, yet only 42% of SA’s adults are fully immunised. The government initially struggled to obtain supplies but eventually procured enough to vaccinate SA’s entire adult population. It is now grappling with falling demand, with the daily vaccination rate running at a seven-day moving average of about 63,000, far below the August peak of 241,000, Our World in Data shows.
“The vaccine rollout is critical to containing the spread of the virus and limiting the severity of infections,” said Treasury in the Budget Review tabled in parliament on Wednesday.
The extra funds set aside for Covid-19 vaccination are part of an additional R21.1bn allocated for health, of which R15.6bn is for provincial health departments. However, given the huge R67.2bn cut to health spending instituted in last year’s budget, the sector is set to remain under pressure.
Consolidated government health expenditure is due to rise by just 0.2% over the medium term, representing a 4.4% cut in real terms as Treasury projects inflation will average 4.6% over the period. The health budget is set to rise from a revised estimate of R256bn in 2021-22 to R259bn in 2022-23, falling to R248bn in 2023-24 as Treasury anticipates Covid-19 spending winding down, before rising to R257bn in the outer year.
In a further blow to the public health sector, Treasury said the wage bill for health personnel will grow at only 1.1% over the next three years, putting a damper on provincial health departments’ hopes of employing more frontline staff.
Emphasising the need for provincial health departments to create training posts for medical interns and community service doctors, including those returning from Cuba, Treasury has added an extra R3.3bn to the human resources and training grant which supplements provincial funding for these jobs. It has also shifted R744m from other programmes to take the total allocation for this grant to R7.8bn over the medium term.
The “sugar tax” on beverages containing more than 4g of sugar per 100ml has increased from 2.21c per gram to 2.31c per gram from April 1. Treasury is considering lowering the 4g threshold and extending the levy to fruit juice.
Treasury also said it intended to impose an excise duty on e-cigarettes of at least R2.90 per ml for both nicotine and non-nicotine solutions.
Medical scheme tax credits will increase from R322 to R347 per month for the first two members, and from R224 to R234 per month for additional members.
This year’s Budget Review is virtually silent on National Health Insurance, the government’s plan for universal health coverage. The scheme has been on the ANC-led government’s agenda for more than a decade, but parliament has yet to pass legislation to bring it into effect. Nevertheless, Treasury has set aside R8.8bn over the medium term for the NHI, of which R6.5bn goes to the NHI indirect grant managed by the national health department.
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