Government to spend R50 billion more on social services as general spending increases

The government will spend an additional R50 billion on social services for the financial year 2023/24, says Finance Minister Enoch Godongwana during his Budget Speech on Wednesday, further raising questions as to whether South Africa is gradually teetering towards being a welfare state.

General government spending is set to increase with post-schooling education seeing the least increase at 6,0% and social development seeing the biggest increase at 16,9%.

Debt service, basic education, community and economic development, peace and security and health are some of the issues the government will be spending more on.

Of the R2.24 trillion of the government’s consolidated expenditure, 60% will be directed to social services with education – described as learning and culture by the ministry – as well as social development getting the biggest chunk

A total of R457.1 billion is expected to be spent on learning and culture which covers basic education, the National Student Financial Aid Scheme, and skills development levy institutions, among others. This is an increase of R15.6 billion from the previous year’s budget allocation.

With an additional R14.1 billion, a total of R378,5 billion is expected to be spent on social development, which includes old-age grants, child-support grants, and social security grants, among others – marking a 16,9% increase in social development.

The old-age grant expenditure has increased from R92,1 billion from the previous year to R99,1 billion, while child-support has been increased by R4,1 billion taking the total expenditure to R81,9 billion.

With the official unemployment rate of 32,9% reported in the third quarter of 2022 and the expanded unemployment rate at 43,1% during the same period, of the R378,5 billion to be spent on social development, the government will now spend R92,4 billion on social security fund and “other grants” at R72,9 billion.

South Africa currently has 7,6 million people on the R350 Social Relief Fund, while more than 10 million people could potentially qualify for the grant. A total of R36 billion has been allocated for this fund.