MTBPS: South Africa’s tighter budget demands stricter healthcare priorities

Finance Minister Enoch Godongwana made no adjustments for the health sector in his Medium Term Budget Policy Statement, leaving activists and trade unions concerned about what the sector will face in the new year.  

“The lack of adjustments to the health sector ignores provinces. Almost every province has a shortfall in salaries. And the way they are handling it is by aggressively accruing expenses. There’s already pressure on goods and services – especially medicine,” warns Russell Rensburg, director of the Rural Health Advocacy Project. 

Godongwana has warned that tax collection for the 2024/25 financial year is expected to be lower than estimated in February. Over the next two years, the main budget revenue estimates have been lowered by R31.2 billion. In his speech, Godongwana says that in the absence of faster growth and in the face of external risks, tax revenue will remain under pressure, forcing the government to make difficult decisions on where to spend. 

But Rensburg says the biggest concern is what was missing from the finance minister’s speech. 

“This budget signals that there won’t be increases in public spending. But we don’t know what will inform the priorities in next year’s [February] budget.” 

Health system demands 

South African Medical Association Trade Union (SAMATU) says with lower revenue estimates, the health department may experience cuts in its allocated funds. 

“This means the potential limitations in strengthening the healthcare workforce and infrastructure which is already lacking. This reduced budget could affect ongoing and future investments in healthcare infrastructure, staffing and essential services,” SAMATU general secretary Dr Cedric Sihlangu Sihlangu says.

“The underfunding perpetuates the shortage of doctors and critical services personnel further stressing the system. The impact includes longer patient waiting times, overburdened healthcare professionals and potentially compromised patient care,” he says. 

Setting new priorities

Rensburg believes this is the right opportunity to reorganise the country’s health systems, which he says has become too centred on hospitals and unaffordable. 

“We need to focus on priorities of minimising hospital costs and expanding primary healthcare. Not having an increase in public spending means we have to work with what we’ve got.” 

Rensburg says this means working across sectors to find a way forward, by taking the time to understand the problems in the healthcare sector and identify inefficiencies. 

“We need a framework on how to improve services. More money won’t solve the problem.” 

For its part, the national health department says it will wait until the Treasury provides the revised estimates for next year. This does not look good for departments such as health and education that have seen budget cuts over the years. 

In July the National Department of Health was allocated a budget of R62.2 billion, a 3.5% increase from last year’s R60.1 billion. But there were concerns that the budget allocation would not solve the funding crisis in the healthcare sector. 

Speaking on Parliament TV during the build-up to the presentation of MTBPS, Dr Patience Mbava, chairperson of the financial and fiscal commission says one of their recommendations is to focus on the district health system. 

“We found that there were many inefficiencies in many of the public hospitals. We know that the government is quite focused on implementing the National Health Insurance (NHI) and we need to make sure that we have a district health system that is efficient and effective,” she says. 

According to Godongwana the health department will benefit from digital infrastructure through digitising health records management for the rollout of NHI.

He says the government is making a concerted effort to increase the pool of funders for public infrastructure financing. The government will issue a request for proposals for funders who are interested in supporting these projects. For example, a request for proposals will be issued this year for funders to fund projects like the construction of two hospital projects including a district hospital in Limpopo 

Debt rising faster than economic growth

Godongwana says the South African debt has risen too fast and is very high. He says debt-service costs will reach R388.9 billion in the current financial year. 

“This means that for every one rand of revenue raised by the government this year, 22 cents will be paid in debt service costs. To deal with this problem, we have taken difficult steps to reduce the budget deficit,” he says. 

He says the government’s most immediate spending pressures will be addressed despite lower revenue. – Health-e News 

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}