This is what the budget would look like if it took people seriously
In the lead-up to his maiden national budget speech in Parliament on February 21, Finance Minister Malusi Gigaba will be implored to make politically hard, but essential, budget choices. Many will argue that he should look to raise investor confidence through austerity measures, like freezing public sector wages and delaying the roll-out of national health insurance (NHI).
But Gigaba’s allegiance should be to the South African people, and not investors. So what would the minister’s budget look like if it prioritised these people, instead of the nebulous business interests on which the wellbeing of our economy ostensibly depends?
The budget must be understood beyond numbers and statistics. It is a political document that will reveal the vision of the ANC, and set out the programme of action through which the government must realise its constitutional obligations.
The minister’s task should thus be to allocate funds in such a way as to ensure that SA’s chronic poverty and inequality are alleviated, and that the socioeconomic rights of the vulnerable are respected.
Here we consider the budgetary arguments around two of the socioeconomic rights that took centre stage at the ANC elective conference in December: land and higher education.
We then look at the possible impact of cutting two of the rights rumoured to be on the chopping board to fund higher education: housing and social security.
Finally, we consider the impact of the rural dividend on poor people’s access to healthcare and basic education.
The Constitution mandates the provision of equitable access to land, land restitution and security of tenure. No provisions of the "property clause" may impede the state achieving these commitments.
Nevertheless, apartheid patterns of land ownership remain largely intact. It is not clear whether government’s programmes have contributed to changing this picture.
By 2017, 8% of commercial farmland had been transferred. Some private purchases of land have contributed modestly towards changing racially skewed landholdings.
Land restitution has been slow, however. Estimates suggest that resolving existing land claims may take more than 140 years.
Amidst this slow progress, there is growing evidence of elite capture of land reform, by state-connected elites and traditional authorities, often in partnership with corporate interests.
At the same time, nobody really knows who owns what land. The historical divide between the 13% designated as "homelands" and the remaining white commercial farmland, state land and urban centres no longer reflects reality. The Department of Rural Development and Land Reform’s recent land audit does not clarify what the new reality might be. The audit only identified ownership of 31% of land. We still know nothing of the nationality, race and gender of the companies that own the remaining 69%.
Budget allocations have constrained land reform for several reasons. First, paying market price has constrained how much land can be acquired.
Second, redistribution has been limited by the diversion of funds according to internally competing departmental priorities.
Third, the capacity of the department has been constrained by operational budgets. The empty posts in the department’s land reform programme stand at 26%, and a shade over 21% in the restitution programme.
The national budgets for land reform and restitution have been in decline for more than a decade. Improving the delivery of land reform while limiting the burden on the fiscus might rely on ending the diversion of land reform budget to non-land reform purposes.
The ill-informed Agriparks programme should be abandoned and removed from the land reform budget, along with other non-land reform initiatives that are depleting the funds available for the acquisition and development of land. This alone would more than double the available funds for land reform, even in the absence of an increase in the budget.
Total budget allocation for all aspects of land reform since 1995 has been about R62bn. This is what has paid for the acquisition and/or transfer of 8% of commercial farmland.
To transfer 30% of commercial farmland by 2030, the pace of land reform would need to increase fivefold. If the state starts to drive down compensation to landowners, this need not necessarily entail a fivefold increase in the budgetary provision.
Former president Jacob Zuma shocked many in the lead-up to the ANC’s December conference when, flouting legislative procedure, he announced that the government would roll out fee-free higher education. Considering that only two months prior Gigaba had announced a budget shortfall in excess of R50bn, attention has since been trained on how the finance minister will pull this budgetary rabbit from the hat.
Tertiary qualifications significantly improve employment prospects. The higher education sector is indispensable to economic growth.
However, transfers to higher education institutions have decreased in real terms. The available funds are simply not enough to heed the call of the students and activists who have campaigned for the staggered introduction of free higher education.
Instead of producing a sustainable plan to fund this gap, however, the government has played politics. South Africans remain in the dark regarding the details of how Zuma’s plan might be rolled out.
Ways of funding free higher education could include cutting the bloated Cabinet, reducing the employment of consultants, clamping down on fruitless and wasteful expenditure in the public sector, and stamping out tax evasion by the wealthy.
The solutions must be unashamedly pro-poor, lest we sell young people’s futures to line the pockets of the rich.
Early rumours are that Gigaba will not be able to fund fee-free higher education without compromising other line items. Two of the socioeconomic rights in the line of fire are housing and social security.
Millions of South Africans still live without adequate housing, and are subject to the constant risk of eviction.
The government delivered almost 1.88-million houses between 2002 and 2015. The number of houses delivered each year is declining, however, reaching a 15-year low in 2015.
The state has tried to scale up the provision of housing through large-scale but peripheral housing projects. This has had the unintended consequence of exacerbating spatial apartheid in South African cities. There is a direct relationship between where people live and the likelihood that they will find a job. Poorly located housing contributes directly to the persistence unemployment in SA.
Gigaba should, as a result, encourage a shift away from mega projects in poorly located areas and towards housing developments and upgrading informal settlements in well-located areas. Both land and buildings should be expropriated to achieve this goal, if necessary.
Together with housing, it is rumoured that an already creaking social grants system will suffer in order to fund fee-free higher education.
Grants have been the single most successful policy intervention for reducing poverty in SA.
But while the number of social grants distributed has grown from 12-million in 2006 to over 17-million in 2017, some grants remain tokenistic and inadequate. The Child Support Grant of R380, for example, falls below the R531 required to afford enough food every month to survive.
Any budgetary provision for social grants that do not, as a minimum, keep pace with inflation will prove catastrophic.
A further area that demands Gigaba’s attention is the rural dividend. Lower population densities and large distances between facilities make the delivery of services in rural areas more expensive. This demands that the equitable share formula used to determine what share of the budget is allocated to different parts of the country is revised. Here the two most pressing cases are basic education and health care.
Unlike other socioeconomic rights in the Constitution, the right to basic education is immediately realisable and directly enforceable.
So when a learner is deprived of textbooks, qualified teachers, furniture, transport or adequate infrastructure, the government is obliged to take steps to immediately provide these entitlements to the learner.
The baseline funding available for basic education, however, was revised downwards by both former finance minister Pravin Gordhan and by Gigaba in 2017. This means we are investing less in basic education today than we had planned to prior to 2017.
The need to increase investment in basic education has never been more pressing. South African learners are failing to meet basic literacy and numeracy standards: 78% of grade 4 students cannot read for meaning. The picture is particularly bleak in rural provinces: 91% of grade 4 children in Limpopo cannot read for meaning, with similarly high percentages in the Eastern Cape and Mpumalanga.
The equitable share formula should be reformed to ensure that rural schools have sufficient resources available to improve teaching and learning outcomes. Cuts to conditional grants for infrastructure must be reversed so that provinces can ensure that all schools meet minimum norms and standards. This is necessary to avoid the possibility of any learner facing the appalling death that befell Michael Komape, who drowned in his school’s pit latrine in Limpopo in 2015.
Despite significant resources allocated to healthcare, significant geographical variations in health outcomes remain. The most vulnerable communities are predominantly young, black, poor and mostly rural.
Women giving birth in OR Tambo, a deep rural community in the Eastern Cape, are twice more likely to die due to complications around childbirth than women giving birth in the Western Cape. Children born in rural provinces are twice as likely as children in the rest of the country to die from diarrhoeal diseases.
While healthcare expenditure currently makes up more than 13% of the national budget, it does not necessarily imply that it is adequately funded. Key drivers of expenditure show that the expansion in funding has been driven by the rapid expansion of the SA’s antiretroviral programme. More than 3.5-million people are now receiving treatment.
The freezing of critical health posts driven by budget constraints has led to mounting pressures on health service delivery and to delays in the effective introduction of the long-proposed NHI, which would ensure that quality healthcare was available to all, regardless of socioeconomic status or geographical location.
The NHI’s success depends on an efficient public health system. Without healthcare workers, a health system cannot function.
The finance minister will be seeking to table a budget that provides for the seeds of a future fee-free tertiary education, as well as seeking to assure the world of anxious investors that the proposed "New Deal" will not be a mask for populist state spending capture.
The state is, however, constitutionally obliged to progressively realise the socioeconomic rights that provide for the meeting of basic needs for the poor. This constitutional imperative has increasingly been ignored in the budgeting process. In this election budget, the government must remember its real priorities, and signal a renewed commitment to its electorate.
• Selebalo writes on behalf of Studies in Poverty and Inequality Institute (SPII), Equal Education (EE), Section 27, Rural Health Advocacy Project (RHAP), Social Justice Coalition (SJC), Socio-Economic Rights Institute of South Africa (Seri), Institute for Poverty Land and Agrarian Studies (Plaas) and Public Service Accountability Monitor (PSAM)