Summary: On 22 October 2014 South Africa’s Finance Minister, Mr Nhlanhla Nene, delivered his first Medium Term Budget Policy Statement (MTBPS) at a sitting of Parliament. The MTBPS, also referred to as the mini budget, is important because it communicates the government’s economic context, medium-term fiscal policy objectives and spending priorities over the next three years.
Overall the 2014 MTBPS has revealed some troubling signs with regard to the financing of health and rural health in particular. The RHAP’s main concerns that have emerged from the MTBPS are:
- Slow economic growth and priority given to the reduction of the budget deficit will have a significant impact on budget allocations for health care and the systems capacity to expand service provision
- Cost containment relating to the compensation of employees and the consequent ‘freezing of government personnel headcounts’ and the elimination of vacant posts will place unbearable strain on an already overstretched public health system if the process is not managed appropriately to protect critical posts, regardless of whether they are currently vacant.
- The long-awaited NHI financing paper has still not been released and there is no indication of when or if this will happen. The NHI and its financing remains as opaque as ever and the risk of failure continues to grow
- Urban development continues to receive explicit fiscal policy priority while rural development is limited to land reform and agriculture. The government’s approach to the resourcing of rural areas continues to lack nuance and an understanding of historical neglect, higher costs of delivering services in rural context and rural-urban linkages. It is important to note that the current levels of inequity continue to mirror the old Apartheid geo-spatial boundaries.
- The absence of a comprehensive fiscal policy approach to rural contexts will result in rural health continuing to suffer from historical and structural neglect. Rural health contexts will certainly feel the impact of spending constraints most acutely unless there is explicit and systematic consideration of rurality in the MTBPS.
Over the next financial year this must include:
- An articulation of how fiscal policy will address rural priorities through targeted financing mechanisms that address rural service delivery needs, human resource constraints, infrastructure backlogs, and additional costs associated with service delivery in rural settings
- The provision in policy for additional fiscal space to allow for substantial real increases in budget allocations to rural settings
- The protection of critical health care worker posts in rural areas from proposed freezing or removal from the establishment. If necessary the Department of Health’s adopted Workload Indicator of Staffing Needs approach need to be applied before deciding if a vacant post can be eliminated.
- A commitment to the development of an NHI financing mechanisms that explicitly caters for implementation in rural settings
For additional information or comment please contact Daygan Eagar at 072 249 3873 or email@example.com
For the full statement click here: Press Statement MTBPS – Troubling Times for Rural Health-22 October 2014_MMPP