Finance minister Enoch Godongwana has blamed provinces for the staffing crises in frontline services, saying they had failed to ensure all the money Treasury had allocated to them for the wage bill reached its intended target.
SA’s fiscal federal system gives provinces discretion in how they assign the money they receive from Treasury in terms of the provincial equitable share.
In the February budget, Treasury reversed deep in-year spending cuts announced in last year’s medium term budget policy statement (MTBPS), allocating additional funding to provinces to cover the cost of employment for frontline services such as health, education and the police. However, only some of this money had been directed to the compensation of employees, said the minister.
“As far as we are concerned, there is no crisis. If there is, it is self-inflicted,” the minister said shortly before delivering his MTBPS speech to parliament.
Provincial health departments are struggling to deliver services with fewer staff, as budget constraints have left them unable to fill critical positions, Health minister Aaron Motsoaledi told parliament in September. Vacancy rates for doctors range from 22.4% in the Free State to 5.5% in the Western Cape, but provinces have indicated that even if they filled all posts they would have insufficient personnel to meet the growing demand for services.
In basic education, budget pressures have forced the Western Cape to cut 2,400 teachers from its basket of posts for next year, while other provinces are scaling back programmes such as school transport to protect teaching jobs. Provincial education departments face a projected budget shortfall of R32bn in the current fiscal year, projected to rise to R176bn by 2027/28, according to basic education minister Siviwe Gwarube.
Historical pressures
Treasury has provided no relief to the health and education sectors in the MTBPS, a decision set to disappoint provincial departments and unions alike.
The pressures facing health and education were largely historical, since Treasury had reversed the in-year cuts announced in last year’s medium-term budget strategy in the February budget, said Treasury’s acting deputy director-general for intergovernmental relations, Ogaleletseng Gaarekwe.
Consolidated health expenditure is set to grow by an average of 4.3% over the medium term, rising from R274bn in 2024/25 to R284.5bn in 2025/26, and to R297.2bn in 2025/27 and R310.8bn in the outer year.
In basic education, consolidated expenditure is set to rise by an average of 5.6% over the medium term, increasing from R323.2bn in 2024/25 to R342.4bn in 2025/26, and then to R362.8bn in 2026/27 and R380.6bn in the outer year.
Trade union federation Cosatu said frontline services from hospitals to schools were paying the price for “the dangerous reductions” in filling essential posts and loss of critical skills.
“Sars has shown that by appointing competent management, removing corrupt elements, filling key vacancies and investing in the capacity of the state, society reaps the rewards of quality public services that spur economic growth. This is the model that needs to be followed, not suffocating the nurse or teacher.”
Western Cape education MEC David Maynier said he was disappointed that no additional funding was provided to provincial education departments for teachers’ salaries, as it would increase class sizes and negatively affect learning outcomes.
Treasury said controlling growth in the public sector wage bill was an integral part of its medium-term fiscal strategy, emphasising that SA’s spending on public sector salaries as a percentage of GDP was well above many other countries. In 2022, it stood at 13.6% of GDP, putting it above the Organisation for Economic Co-operation and Development (OECD) average of 10.1%.
The government is reviewing the health sector’s human resource policies, including the occupation-specific dispensation, and commuted overtime and rural allowances, which inflated the cost of public health professionals, said Treasury.
It has however given additional funding to parliament “for the payment of exit packages and loss of office gratuities” to nonreturning MPs after the end of the sixth parliament, and to address its human capacity constraints.
Treasury has added R11bn to the expenditure budget to cover cabinet’s approval of a plan to reduce the public-service wage bill and “‘bring in younger talent” by offering early retirement in 2025/26 and 2026/27. It anticipates 30,000 civil servants will take up the offer, and that it will deliver savings down the line.
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