The Standing Committee on Appropriations received two briefings on the 2020 Appropriation Bill recently from the Public Services Commission (PSC) and the Human Sciences Research Council (HSRC) – and each presenter highlighted the potential cost-saving measures and areas for concern that require additional funding.
In its briefing, the PSC told the committee that the ongoing debate around the public wage bill should include the issue of excessive salaries in public entities and municipalities, in particular the executives and board members.
In light of Covid-19, the presenter said, the consideration should be made on the negotiation for non-payment of performance rewards for public service and the entire public administration.
The government’s cost of doing business was raised not only as a concern but as an opportunity for cost-saving. According to the PSC, state resources continue to be under severe pressure, and this has been exacerbated by the Covid-19 pandemic.
The committee was told that the area of public service health risk assessment, done by public financial institutions, is one of the areas which should be revised, as these assessments could also be done by government healthcare practitioners. The use of consultants, they said, also remains as one of the large areas of concern – and the briefing highlighted once again the failure of government departments to utilise internal capacity.
During the briefing, the committee highlighted its ongoing concerns around the issue of non-payment by government departments and the effects of that on small businesses, which are pivotal drivers of economic growth. The committee believes that one of the ways to deal with this challenge is to link the 30-day payment period to the performance agreements that government officials sign.
In their briefing to the committee, the HSRC highlighted areas most in need of additional funding, and which according to them, should be reprioritised. The first area of concern relates to service delivery.
The budget cuts for local government support and traditional leaders remain a growing concern, and they said, this is the area where service delivery happens.
According to Prof Narnia Bohler-Muller, the Executive Director of HSRC's Research Programme on Democracy, Governance and Service Delivery, investment in basic services infrastructure remains critical to managing local responses to the pandemic and general household and/or community resilience.
She said the redirection of the budget should therefore consider the high prevalence of hunger, the provision of water required for personal and individual hygiene, sanitation and water provision to ensure personal and household hygiene, and economic opportunities to protect the incomes of households. She said the second area of concern relates to inclusive economic development.
One of the areas that were highlighted was the infrastructure spending in basic education, which remains critical. According to the HSRC, infrastructure spending is more needed now in connection with dealing with the crisis, but also for future development.
Regarding social development, the HSRC welcomes the Covid-19 social assistance programme, but argued that the abrupt withdrawal at the end of six months, without alternate interventions, may have a potentially destabilising impact on the economy, poverty and vulnerability levels and social stability.
The Covid-19 pandemic has thrust into the spotlight the need for better health promotion strategies. According to Prof Khangelani Zuma, who is HSRC’s Executive Director: Social Aspects of Public Health, the average growth of 5.1% in the health budget is insufficient given the immediate and long-term health challenges faced by South Africans.
The committee was told that the experiences of the people during the lockdown speak to the realities of many people even without the lockdown, that approximately 13.2% of the population indicated that their chronic medication was inaccessible during the lockdown, and 13% to 25% of those living in informal settlements, rural (traditional tribal areas) and farms indicated their chronic medications were not easily accessible.
Addressing key constraints facing the country’s health system, he said the country requires the reorientation of the health system towards comprehensive primary healthcare and institutional reforms for the implementation of the National Health Insurance (NHI).
The HSRC also spoke to the need for stronger prioritisation of expenditure on innovation, science and technology (IST). The HSRC’s Research Director, Dr Glenda Kruss, pointed to the intensified problem of Covid-19. According to her presentation, the redirection of IST expenditure to Covid-19-related priorities likely means further IST cuts, and that will impact negatively on future growth and development potential.
While noting the challenges related to IST, the committee questioned the decline in private sector investment in IST, while encouraging the HSRC to look at how schools in rural areas are included in IST and development.
With regard to cost-cutting measures, the committee notes that this requires innovation to facilitate effective and efficient service delivery and performance. The management of public funds requires proper accountability measures, more important now given the funds made available to deal with the Covid-19 pandemic.
While the areas in need of additional funds are highlighted, what is not clear according to the committee, are the programmes and measures of enhancing revenue that will be able to sustain these areas more effectively.
The committee is determined to process an Appropriations Bill that is responsive to creating opportunities for efficiency, effectiveness and value for money. While keeping this in mind, the committee also realises that budget cuts across all areas to deal with the current pandemic are inevitable.
By Felicia Lombard
7 May 2020
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