Tuesday, 21 May, 2024
HomeNews UpdateLittle relief for embattled health sector in 2023 budget

Little relief for embattled health sector in 2023 budget

Additional funds set aside for healthcare in the 2023 budget would be insufficient to counter the effect of cuts announced in 2021, reports BusinessLIVE, or provide much relief for an already overstretched and under-resourced sector.

In his budget speech yesterday, Finance Minister Enoch Godongwana said National Treasury has designated an extra R23.7bn for health expenditure over the medium term, but there would be little slackening of the pressure on provinces, which are feeling the pinch as their budgets shrink in real terms.

In 2021, Treasury instituted massive reductions to the health budget in efforts to slash government spending after the economic turmoil resulting from the pandemic. Money was shaved from health’s compensation Bill as well as conditional grants for HIV/Aids, hospital infrastructure and training.

However, the extra money in the new budget will fail to offset these cuts, meaning the consolidated health budget will fall from a revised estimate of R259.4bn in 2022/2023 to R259.2bn in 2023/2024, and will then increase to R268.9bn in 2024/2025 and R281.3bn in 2025/2026.

This is a nominal increase of just 2.7% over the medium-term expenditure framework, meaning budgets will be falling in real terms over the period because inflation is expected to run well above this level. Treasury estimates inflation was at 6.9% in 2022 and forecasts it will be 5.3% this year, 4.9% in 2024 and 4.7% in 2025.

Pointing out the cost of the corruption in the public health sector, Treasury’s acting director-general, Ismail Momoniat, said the budget was “all about trade-offs between and within departments”.

The extra funding is aimed at tackling the funding crisis for healthcare personnel and the backlogs caused by disruptions to routine health services during the pandemic, Treasury said.

The health budget includes an allocation of R1.35bn to the NHI indirect grant over the medium term for the construction of the 488-bed Limpopo Central Hospital in Polokwane due to start in March. A total of R512m is shifted from health to the Department of Home Affairs’ border management authority, due to take over responsibility for Port Health Services from 1 April.

The sugar industry, pulverised by public violence, floods and greater regional competition, will be relieved that the health promotion levy will remain constant over the next two years. Treasury expects to collect R2.4bn in 2022/2023 for this “sugar tax”, slightly less than the R2.2bn it had anticipated.

A discussion paper with proposals for taxing the sugar content of fruit juices would be released shortly.

Medical tax credits will be increased in line with inflation in 2023/2024, to R364 a month for the first two members, and to R246 a month for additional members.


BusinessLIVE article – Health sector offered little relief as budget shrinks in real terms (Restricted access)


See more from MedicalBrief archives:


South Africa’s health sector in the 2022 budget


Crisp says Health budget has to be bigger if NHI goals are to become a reality


Treasury says NHI implementation so slow that no budget is needed anytime soon


SAHPRA appeals for a bigger budget to fill key vacancies





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