Medium-term budget: What budgets are being cut?

Finance Minister Enoch Godongwana disclosed plans to cut government spending and avoid a fiscal crisis. The Medium-Term Budget Policy Statement (MTBPS) indicated that fiscal consolidation measures might lead some departments to keep their previous budgets.

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Provinces won’t receive inflation-matched budget increments, leading to potential funding gaps in essential services and necessitating the reprioritisation advised by the National Treasury.

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MEDIUM-TERM BUDGET:WHAT IS BEING CUT, WHAT STAYS

The Medium-Term Budget Policy Statement (MTBPS) unveiled the government’s plans for fiscal consolidation, which could lead to some departments keeping their current budgets.

Provinces won’t receive budget increases matching inflation, potentially creating funding shortfalls in essential services.

This has prompted the National Treasury to recommend reallocating resources, according to IOL News.

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Despite these actions, the social wage at 61% will persist, as President Cyril Ramaphosa stressed that social grants and funding for police, health, and education will remain untouched.

The focus is on protecting crucial frontline services like Basic Education, health, and police.

Furthermore, labor-intensive departments will secure extra funding of R23.6 billion in 2023/24 for implementing the 2023 public service wage agreement.

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Other departments will need to rearrange their finances for this agreement and actively manage their personnel numbers.

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DEPARTMENTS HAVE TO RE-SHUFFLE FUNDS

In addition, departments heavily reliant on labor will get extra funding of R23.6 billion in 2023/24 for the 2023 public service wage agreement.

Other departments must reorganize funds to implement the agreement and actively control their staff numbers.

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National Treasury is watchful regarding increasing expenditure in crucial departments and supports the idea of rearranging priorities. Concerning higher education, the National Student Financial Aid Scheme will harmonize its budget with the Department of Higher Education.

Treasury urges universities to spend according to their capabilities. In health, they want to improve efficiency in overtime, medical supplies, security, and stalled projects.

“The Health Department should tackle mounting medical claims, surpassing R100 billion, which pose financial risks. Legal changes are being made.

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Provincial budgets won’t match inflation, so they need to reallocate resources to avoid affecting services, says MTBPS.