South Africa: On the Razor's Edge - Fiscal Balancing Act Hinges On Civil Servants' Wage Bill

South African Finance Minister Tito Mboweni delivers 2021 Budget Speech in Parliament, February 24, 2021.

Under the theme of supporting public health and repairing public finances, the 2021 Budget shifts numbers across the balance sheet to make it look good. But it's a case of robbing Peter to pay Paul - dependent on the assumption of no real increases in the public wage bill.

The biggest losers are social grant recipients - pensions increase by R30 to R1,890 and childcare grants will go up by R15 to R460. On average social grants increase by 1.6%, well below inflation; disability grants rise by R30 to R1,890 and foster care grants by R10 to R1,050.

Also on the losing side of the R2.02-trillion Budget 2021 are provinces and municipalities. Provinces lose R58.3-billion in the 2021 financial year and R83.5-billion the next year, while local government loses R20.2-billion over the next three years.

At the municipal front, the Budget Review document argues the cuts are from non-performing programmes. For example, R1.9-billion are cut from the public transport network grant "because only six of the 13 cities receiving the grants have successfully launched public transportation".

This is part of an overall R264.9-billion in expenditure cuts over the next three years across government to facilitate spending on Covid-19 vaccines (R9-billion)...

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