The 2024 national budget offers hope in some areas, but allocations for direct health benefits fall short of making a difference to people’s health and well-being, researchers from the South African Medical Research Council argue.
These include a ring-fenced allocation to crack down on corruption in health to inspire trust for the National Health Insurance, taxing accessories for e-cigarettes, a jacked up child-support grant, clarity on plans dealing with climate change and its impacts on human health, and greater investment to enhance women’s capabilities alongside the Covid-19 grant, they write in Spotlight.
They write:
Finance Minister Enoch Godongwana’s 2024 budget had several key elements that would affect systems, services and well-being from a health perspective.
Importantly, not only direct health spend, but budget allocated to social protection and climate infrastructure has implications for health outcomes like nutrition, growth and food security, while health taxes tackling illness caused by alcohol, cigarettes and e-cigarettes, among others, are also key revenue streams with taxation intended to deter use.
As researchers at the South African Medical Research Council we are dedicated to improving South Africans’ health through research and innovation, and share some insights into positive areas in the budget and highlight those with gaps that have potentially dire consequences for the health of our nation.
Health has been allocated a total of R848bn over the medium-term expenditure framework, including R11.6bn for the 2023 wage agreement, R27.3bn for infrastructure and R1.4n for the NHI grant.
Compared with the Medium-Term Budget Policy Statement last October, government is now adding R57.6bn to pay salaries of nurses, doctors and teachers, among other critical services.
But in real terms, the health budget is shrinking. The allocation to cover last year’s wage settlement is a positive step to try to fill posts for essential health workers, but falls short of fully funding the centrally agreed wage deal, meaning provincial Health Departments will be unable to fill all essential posts.
Treasury’s chief director for health and social development, Mark Blecher, said: “The extra money will not be sufficient to hire all recently qualified doctors who have been unable to secure jobs with the state, and provincial Health Departments will need to determine which posts should be prioritised.”
South Africa has only 7.9 physicians per 100 000 people in the public health system, while it has been estimated there are more than 800 unemployed newly qualified doctors. Considering these shortfalls, the amount of money allocated appears optimistic for service coverage for the increasing population.
Salaries continue to consume the largest share of provincial Health budgets, at 64% since 2018.
The Human Resources for Health strategy lacks clarity on the implementation of workforce-planning approaches with significant implications for how provinces prioritise workforce cadres to keep up with the increasing needs – particularly in light of NHI.
Nutrition support on the decline
The Minister described protecting the budgets of critical programmes like school nutrition programmes (almost 20 000 schools).
Ensuring nutrition support to children under five for optimal physical and cognitive growth is vital. The 2023 National Food and Nutrition Security Survey by the Human Sciences Research Council found that 29% of children under five are stunted. The proportion of children experiencing both acute and chronic under-nutrition has increased over the past decade.
Stunted children are more likely to earn less and have a higher risk of obesity and non-communicable diseases like diabetes and heart disease as adults.
Currently, only registered or conditionally registered Early Learning Programmes (ELPs) serving poor children (determined by income-means testing) are eligible to receive the ECD subsidy. This is not aligned with inflation and the real value of the R17 per child per day subsidy and the contribution to nutrition costs have decreased over time. The subsidy does not cover the costs of running quality programmes, let alone the costs of providing nutritious meals. The World Bank suggests a minimum of R31 per child per day.
There is also concern about the children missed who attend informal or unregistered programmes. According to the 2021 Early Childhood Development Census, only 41% of ELPs are registered and only 33%, registered or not, receive the subsidy. Unregistered ELPs are more likely in vulnerable communities, attended by children from vulnerable households.
Further, although about 1.7m children are enrolled in ELPs, enrolment rates vary, from 40% in Gauteng to 26% in the Eastern Cape, meaning many children are not enrolled, and, of those who are, most do not benefit.
Child grants increase not keeping up with inflation
Child grants appear in the budget annually, but the increases do not keep up with inflation, and particularly not with the basket of goods needed for growing children. In real terms grant amounts are decreasing – visible in how hunger is increasing countrywide, particularly in the Eastern Cape where uptake of social grants is very high.
A recent Department of Social Development report – Reducing Child Poverty: A review of child poverty and the value of the Child Support Grant – recommended, as a minimum, an immediate increase of the child-support grant to the food poverty level (R760 last year), as more than 8m children receiving it were going hungry/missing a meal at least once a day. The R20 increase falls far short of that recommendation.
The NHI and corruption in health
The Minister said the allocation for NHI demonstrates commitment, and also mentioned a range of system-strengthening activities – key enablers of an improved public healthcare system – including:
• Strengthening the health-information system;
• Upgrading facilities;
• Enhancing management at district and facility level; and
• Developing reference pricing and provider payment mechanisms for hospitals.
He recognised that these require further development before NHI can be rolled out at scale.
The NHI allocation must show a tangible commitment to health-system reforms. Funding needs to be allocated to create organisational infrastructure that ensures transparent, trustworthy decisions will be made about the benefits package and programmes to be funded.
Specifically, funding for conducting Health Technology Assessments with credible processes that manage interests and ensure coverage decisions are informed by independent appraisal of the best-available evidence, measures of affordability, and with public input.
Some areas of government already undertake such work – like the National Essential Medicine Committee – but how these processes will expand beyond medicine to include decisions about health-systems arrangements and public-health interventions remains unclear, and apparently unfunded.
Undoubtedly, facilities need to be upgraded, and it’s positive to see this as a named activity. However, it’s unclear how the upgrades and quality of care will be ensured, given that tertiary infrastructure grants have been reduced because of underspending of conditional grants.
Currently, health facilities’ quality is assessed by the Office of Health Standards Compliance which inspects and certifies them – a prerequisite for NHI accreditation.
This means the watchdog agency will need adequate budget. Implementation research is also required to test out the different NHI public-private contracting models. Furthermore, a ring-fenced allocation to deal with corruption would be welcomed and inspire trust for NHI.
‘Sin’ taxes vs ’health taxes’
Excise duties and above-inflation increases of between 6.7% and 7.2% for 2024/25 for alcohol products were proposed: tobacco-excise duties will be increased by 4.7% for cigarettes and cigarette tobacco and by 8.2% for pipe tobacco and cigars. Also tabled was an increase in excise duties on electronic nicotine and non-nicotine delivery systems (vapes).
The proposed tax on tobacco products is not in line with WHO recommendations, and below inflation. This should be at least 70% of the retail price to have a positive impact on public health by reducing tobacco use, especially in a country with one of the highest tobacco-use rates in the region.
In South Africa, the tax is currently between 50% and 60%. Although the tax on electronic cigarettes has increased, it is still below inflation.
We hope the increase will deter more young people from starting to use e-cigarettes and encourage current users to quit – and that this increase is not just a once-off and that future increases are made with the goal of reducing e-cigarette use.
Overall, the taxes on tobacco products and electronic nicotine and non-nicotine delivery systems are below inflation, meaning manufacturers can absorb the increases, and consumers may not be deterred from using them.
This is a missed opportunity: there is a clear link between these products and non-communicable diseases, like hypertension, and the worsening of communicable diseases, like tuberculosis.
The impact of climate change on lives and livelihoods
Climate and health are closely related, with more attention being paid by the global research community to potential impacts of climate change and natural disasters on lives and livelihoods. The Minister noted a multi-layered risk-based approach to manage some of the fiscal risks associated with climate change.
These include:
A Climate Change Response Fund;
Disaster-response grants; support and funding from multilateral development banks and international funders to support climate adaptation,
Mitigation, energy transition and sustainability initiatives; and,
Municipal-level adaptation and mitigation initiatives.
From a climate and health perspective, the budget speech demonstrates positive steps towards addressing climate change and its impacts on human health nationally.
There are numerous health co-benefits to these strategies. Investing in renewable energy sources can improve air quality, reducing respiratory illness.
Overall, we note the mention of NHI plans, social protection, nutrition, health workforce, health taxes and climate.
However, the allocations for direct health benefits and to address social determinants of health, like education and poverty-alleviation, fall short of what is recommended, from global and national research evidence, to make a difference to people’s health and well-being.
*SAMRC researchers: Wanga Zembe, Donela Besada, Funeka Bango, Tanya Doherty, Catherine Egbe, Charles Parry, Darshini Govindasamy, Renee Street, Caradee Wright and Tamara Kredo.
See more from MedicalBrief archives:
Health budget brings NHI a step closer
Medical school deans urge Treasury to stop Health budget cuts
Crisp says Health budget has to be bigger if NHI goals are to become a reality
Unemployed doctors labelled ‘too fussy’ about job placements
SAHRC gives government deadline to address Eastern Cape malnutrition crisis