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Social development budget is not fit for purpose

- Thokozile Madonko and Lisa Vetten

The finance minister warned in February that the 2023-24 budget would make “tough trade-offs in the interests of the country’s short and long-term prosperity”.

One such trade-off assumed to be in the country’s interest was a reduction in government departments’ consumption spending, set to contract by 2.2% in 2023-24. This is the largest contraction in 25 years and affects expenditure on salaries, goods and services, as well as transfers to nonprofit organisations and households. 

To quote from Minister Lindiwe Zulu’s budget vote speech delivered on 30 May, the result of these cuts for the historically underfunded department of social development is a budget that “has not kept pace with our growing population and the complexity of their social needs”. It is also a budget with gendered effects, given how feminised the work of care has been made.  

The department’s budget for its social protection mandate includes both cash transfers and care services. While cash transfers, or grants, consume R253 billion (or 96.4%) of the social protection budget, the monetary value of these grants is being eroded by inflation. To put this in context: those receiving grants live in South Africa’s poorest households and spend almost half their income on food and energy. From 2019 to 2024, the older person’s grant was budgeted to grow by a mere 5% and the child support grant by 4.3%. Yet food inflation has risen to 14% over the past 12 months. 

The social relief of distress grant, introduced as a temporary measure during the Covid lockdown, reached more than 7.5 million people in 2022. Even though it provided much-needed help to the unemployed and those in precarious and peripheral work, it will not be extended again after this year. The minister failed to mention any alternative assistance to this vulnerable group of people in her speech. 

The South African Social Security Agency (Sassa) budget, which administers and pays social grants on behalf of the department, also falls in real terms over the medium term. While allocations for goods and services increase by 5%, in line with inflation, the salary budget grows by 1%, below inflation. This will probably affect Sassa’s capacity to deliver on its mandate — especially during load-shedding, when systems are affected, and services are halted. Expect backlogs and longer waiting times for beneficiaries. 

Care (or social welfare services) attracts R267 million (or 3.5%) of the department’s budget — an amount doesn’t fully reflect the total budget allocated towards services to children and families, older people, people living with HIV/Aids, people with disabilities, and services to victims of crime, gendered forms of violence in particular. The bulk of expenditure on these services occurs at provincial level and is accordingly reflected in provincial budgets. 

According to the minister an estimated R65.2 billion is to be spent on care over the medium term — roughly R20.5 billion annually, to be shared between nine provinces. As care services are one of the department’s under-funded mandates this amount is less munificent than it first appears.

Research completed in 2014 suggested that the Northern Cape social development department made the highest per capita allocation than other provinces towards welfare services for the poorest 40% of its population. But where the Northern Cape spent R1 009 per person in this category per year, KwaZulu-Natal, the least generous province, spent R299 a year. In 2016, following the review of the White Paper on Social Development, cabinet approved a series of recommendations intended to equalise provinces’ expenditure through a series of increases to provincial budgets phased in over a period of five years. 

These recommendations never materialised, compounding current economic constraints. 

Many social care services are provided by nonprofit organisations and subsided by the department through a system of transfers. According to the treasury’s 2018 review of funding for nonprofits, the department was underfunded by more than R12 billion, with R9.2 billion worth of that underfunding borne by nonprofit organisations and the cuts to NPO transfers resulted in a budget decrease of -2,5% from 2019 to 2024. 

If the disappearance of nonprofit services accelerates, the department will need to start offering services in their place. It is not clear that they have the staff complement or budget to do so. 

At present, the department employs 18 948 social workers, with 3 388 contracted for a short-term period through the presidential stimulus package. How many beneficiaries their social workers currently assist is unknown, as is their capacity to take on still more beneficiaries. The department has estimated that it needs to employ 55 000 social workers nationwide by 2030 to meet the vision of the National Development Plan — but it is not clear whether this increase in the employment of department social workers is intended to replace staff at nonprofit organisations or to supplement their numbers. In any case, the cuts to the department’s wage bill make it unlikely they will meet the 2030 target.

The shrinking number of quality nonprofit organisations’ services, in combination with a stagnant number of departmental services, may well reduce the availability of social welfare services overall, as well as deepen people’s sense that they are not cared about. As a further consequence, shortfalls in the cost of care will probably shift from nonprofit organisations to household or family members — or from underpaid women to unpaid women.  

The theme for the 2023 budget tabled by the social development minister is “DSD@work: Leaving no one behind”.  Yet the under-investment in cash transfers and caring services by the government, at a time of increased social suffering, suggests that many may well fall still further behind. This is not in the country’s interests. 

Lisa Vetten is a research associate of the Southern Centre for Inequality Studies, and a research consultant in the University of Johannesburg’s Faculty of Humanities.  

Thokozile Madonko is a research manager at the Public Economy Project of the Southern Centre for Inequality Studies, and an activist, poet and climate campaigner.

This article was first published by the Mail & Guardian