The health sector has taken a knock following finance minister Enoch Godongwana’s announcement of cuts to the HIV programmes as well as spend on health infrastructure in the medium term budget policy statement on Wednesday.
The minister’s speech gave a grim outlook for South Africa’s economy.
“Economic outlook in the medium term remains weak. Rising debt service costs are crowding out important social spending, and our economy has grown fast enough,” says Godongwana.
According to the minister, the most effective ways to fund the budget is to increase the tax base, reduce spending and re-evaluate the government’s priorities.
One area of reduced spending will see one of the biggest HIV treatment programmes globally being slashed over by a billion rand.
The looming budget cuts on the healthcare sectors have raised concerns on how the health ministry is going to address some of the challenges it already faces such as shortages of healthcare workers, and ambulances, dilapidated public health buildings and the non-communicable diseases.
Impact on drive to end AIDS
“The billion rand cut to the HIV sector is huge. We are still far from achieving the targets of the National Strategic Plan for HIV and TB. There is a concern on how we will be able to achieve our set goals with restricted budgets,” says Lencoasa.
She says that South Africa has made major progress in terms of treating HIV. But the country is yet to reach the United Nations targets needed to end AIDS as a public health threat by 2030. And the budget cuts could be a setback to the gains made.
Lencoasa says the imposed budget cuts mean that most of the existing challenges faced by the health ministry will remain unaddressed in the coming years.
Public sector wage bill
Fouché Venter is a head of public economics and modelling at DNA Economics. He says that though the health sector received the highest share of the mini budget, most of the funds will be spent on paying salaries instead of improving health services.
“The allocated budget will also not be enough to increase the number of healthcare workers in the public health sector. And as a result, there will be minimal improvement in terms of service delivery.
“At the moment the wage bill is the only thing which the healthcare sector is trying to keep up with rather than increasing the number of people being employed,” says Venter.
Venter says that it is important for the public to note that the healthcare budget over the next three years will grow at a rate of 3.1% per year which will be meaningfully lower than the inflation rate.
“In real terms the budget is actually decreasing, so I do not see any meaningful measures which this budget will have on addressing challenges in the health sector,” he says.
Public health infrastructure
Professor Frikkie Booysen, the PPS Chair in Health Economics at the University of Witwatersrand, says the cutting of funds reserved for building and maintaining public health infrastructure is a huge concern.
Almost half of a billion rand will be cut from the hospital systems programme which focuses on infrastructure.
“That is worrying as we are spending more money to protect the public sector wage agreements, but we are cutting infrastructure. So we are robbing the future generation of good healthcare by paying healthcare workers more now,” says Booysen.
According to Booysen, cutting infrastructure budgets also means that healthcare workers will work in poorly resourced hospitals. This, in turn, will mean poor health services to the public.
Booysen says that it also remains to be seen how the 1 billion rand which will be cut from HIV programmes will affect the front line services.
Potential silver lining
“Everyone, not just the health sector, will just need to use money better, use it more efficiently and not waste a lot of money. There is a lot of wastage that can be avoided.
“We need to be efficient in how we spend the money, then things can improve. We also need to think of budget cuts as presenting an opportunity to find cost savings methods and to be more efficient,” says Booysen.-Health-e News.