{"id":771803,"date":"2024-05-15T16:00:00","date_gmt":"2024-05-15T14:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=771803"},"modified":"2024-05-15T16:34:31","modified_gmt":"2024-05-15T14:34:31","slug":"how-government-spends-every-r100-it-takes-from-you","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/771803\/how-government-spends-every-r100-it-takes-from-you\/","title":{"rendered":"How government spends every R100 it takes from you"},"content":{"rendered":"\n<p>South Africa&#8217;s government spending landscape has undergone a significant transformation, reflecting a shift in how taxpayer funds are allocated by increasingly prioritising debt repayment and tightening its belt in other areas.<\/p>\n\n\n\n<p>According to the 2024\/25 budget allocation from the National Treasury, for every R100, the South African government would spend it in the following ways (approximately):<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Education and Culture:<\/strong> R20.30<\/li>\n\n\n\n<li><strong>Social Development:<\/strong> R16.30<\/li>\n\n\n\n<li><strong>Debt Repayment:<\/strong> R16.10 (a significant increase in recent years)<\/li>\n\n\n\n<li><strong>Health:<\/strong> R11.50<\/li>\n\n\n\n<li><strong>Community Development:<\/strong> R11.20<\/li>\n\n\n\n<li><strong>Economic Development:<\/strong> R10.80<\/li>\n\n\n\n<li><strong>Peace and Security:<\/strong> R10.30<\/li>\n\n\n\n<li><strong>Other Government Services:<\/strong> R3.40 (This includes general public services and a contingency reserve)<\/li>\n<\/ul>\n\n\n\n<p>Note that salaries are included within these clusters. <\/p>\n\n\n\n<p>A detailed breakdown can be found below:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/image-26.png\"><img loading=\"lazy\" decoding=\"async\" width=\"739\" height=\"342\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/image-26.png\" alt=\"\" class=\"wp-image-771901\" style=\"width:813px;height:auto\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/image-26.png 739w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/image-26-300x139.png 300w\" sizes=\"auto, (max-width: 739px) 100vw, 739px\" \/><\/a><figcaption class=\"wp-element-caption\">Information: National Treasury. Graphic: PSG Wealth<\/figcaption><\/figure><\/div>\n\n\n<p>This outline of the 2024\/25 budget allocations is quite different to what it looked like 10 years ago.<\/p>\n\n\n\n<p>The National Treasury&#8217;s budget allocations for clusters have shifted in the following ways over the past 10 years, with each R100 budgeted going to:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"table-responsive\"><table class=\"table\"><tbody><tr><td><strong>R100 per Cluster<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>2014\/15<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>2024\/25<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Change <\/strong><\/td><\/tr><tr><td>Learning and culture<\/td><td class=\"has-text-align-center\" data-align=\"center\">R20.30<\/td><td class=\"has-text-align-center\" data-align=\"center\">R20.30<\/td><td class=\"has-text-align-center\" data-align=\"center\">&#8211;<\/td><\/tr><tr><td>Social development<\/td><td class=\"has-text-align-center\" data-align=\"center\">R16.10<\/td><td class=\"has-text-align-center\" data-align=\"center\">R16.30<\/td><td class=\"has-text-align-center\" data-align=\"center\">+R0.20<\/td><\/tr><tr><td><strong>Debt servicing<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>R9.20<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>R16.10<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>+R6.90<\/strong><\/td><\/tr><tr><td>Health<\/td><td class=\"has-text-align-center\" data-align=\"center\">R11.60<\/td><td class=\"has-text-align-center\" data-align=\"center\">R11.50<\/td><td class=\"has-text-align-center\" data-align=\"center\">-R0.10<\/td><\/tr><tr><td>Community development<\/td><td class=\"has-text-align-center\" data-align=\"center\">R11.40<\/td><td class=\"has-text-align-center\" data-align=\"center\">R11.20<\/td><td class=\"has-text-align-center\" data-align=\"center\">-R0.20<\/td><\/tr><tr><td>Economic development<\/td><td class=\"has-text-align-center\" data-align=\"center\">R12.90<\/td><td class=\"has-text-align-center\" data-align=\"center\">R10.80<\/td><td class=\"has-text-align-center\" data-align=\"center\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-black-color\">-R2.1<\/mark>0<\/td><\/tr><tr><td>Peace and security<\/td><td class=\"has-text-align-center\" data-align=\"center\">R13.10<\/td><td class=\"has-text-align-center\" data-align=\"center\">R10.30<\/td><td class=\"has-text-align-center\" data-align=\"center\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-black-color\">-R2.8<\/mark>0<\/td><\/tr><tr><td>General public services<\/td><td class=\"has-text-align-center\" data-align=\"center\">R5.20<\/td><td class=\"has-text-align-center\" data-align=\"center\">R3.20<\/td><td class=\"has-text-align-center\" data-align=\"center\">-R2.00<\/td><\/tr><tr><td>Contingency reserve<\/td><td class=\"has-text-align-center\" data-align=\"center\">R0.20<\/td><td class=\"has-text-align-center\" data-align=\"center\">R0.20<\/td><td class=\"has-text-align-center\" data-align=\"center\">&#8211;<\/td><\/tr><\/tbody><\/table><\/div><figcaption class=\"wp-element-caption\">Sources: National Treasury Budget Review &#8211; 2014\/15 &amp; 2024\/25<\/figcaption><\/figure>\n\n\n\n<p><b>However, this is based on government expenditure allocation predictions, which greatly differ from the revenue generated from the tax.<\/b><\/p>\n\n\n\n<div class=\"flourish-embed flourish-chart\" data-src=\"visualisation\/17952736\"><script src=\"https:\/\/public.flourish.studio\/resources\/embed.js\"><\/script><\/div>\n\n\n\n<p>Although there is no readily available information on the exact proportion of revenue (taxes) dedicated to various expenditure, Finance Minister Enoch Godongwana gave a hint into this, saying in his recent budget speech that &#8220;<strong>debt-service costs will absorb more than 20 per cent of revenue<\/strong>.&#8221;<\/p>\n\n\n\n<p><strong>This means that it around R20 of every R100 paid in taxes will go to servicing debt.<\/strong><\/p>\n\n\n\n<p>&#8220;To put this into perspective, spending on debt-service costs is greater than the respective budgets of social protection, health, or peace and security,&#8221; said Godongwana.<\/p>\n\n\n\n<p><strong>What takes up most of your taxes<\/strong><\/p>\n\n\n\n<p>Education and culture and social development still take up the most significant portion of the budget, maintaining their top two spots. <\/p>\n\n\n\n<p>While learning and culture&#8217;s allocation remained unchanged, social development allocations saw a slight increase. However, inflation might have reduced the real value of these allocations. <\/p>\n\n\n\n<p>The biggest change is in debt servicing costs, which have jumped nearly 7% in recent years. This is now the third-largest spending area, reflecting the government&#8217;s focus on managing its debt. <\/p>\n\n\n\n<p>This rise in debt payments has come at the expense of other areas. Budget allocations for<strong> peace and security<\/strong> and economic development for example have shrunk by over 2%.<\/p>\n\n\n\n<p>According to StatsSA, &#8220;the focus of government spending has shifted away from non-financial assets (which includes investment in infrastructure) and goods and services, and towards social benefits and interest payments on debt.&#8221;<\/p>\n\n\n\n<p>South Africa\u2019s gross debt stock is hefty and is expected to increase from R5.21 trillion (73.9% of GDP) in 2023\/24 to R6.29 trillion in 2026\/27 (74.7% of GDP).<\/p>\n\n\n\n<p>President Cyril Ramaphosa and National Treasury have highlighted that the country&#8217;s &#8220;rapid growth in debt\u2010service costs chokes the economy and the public finances,&#8221; but emphasise that the subsequent focus on servicing it is essential. <\/p>\n\n\n\n<p>\u201cOver the past fifteen years, our debt burden has grown to a point where we are spending more on interest payments than we are on (sectors of) education or health care services,\u201d said Ramaphosa in a weekly letter to the nation.<\/p>\n\n\n\n<p>Ramaphosa added that South Africa\u2019s economy \u201chas been weighed down by more than a decade of low growth and rising debt.\u201d<\/p>\n\n\n\n<p>&#8220;High and rising government debt hampers service delivery and investment by draining ever-larger amounts of taxpayer resources for debt service,&#8221; <a href=\"https:\/\/www.treasury.gov.za\/documents\/National%20Budget\/2024\/review\/Chapter%201.pdf\">said<\/a> National Treasury.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/image-21.png\"><img loading=\"lazy\" decoding=\"async\" width=\"531\" height=\"448\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/image-21.png\" alt=\"\" class=\"wp-image-771831\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/image-21.png 531w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/image-21-300x253.png 300w\" sizes=\"auto, (max-width: 531px) 100vw, 531px\" \/><\/a><figcaption class=\"wp-element-caption\">Source: National Treasury<\/figcaption><\/figure><\/div>\n\n\n<p>Treasury predicts that &#8220;debt will stabilise in 2025\/26.&#8221;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/government\/755091\/government-left-juggling-south-africas-biggest-economic-problem\/\" target=\"_blank\" rel=\"noreferrer noopener\">Government left juggling South Africa\u2019s biggest economic problem<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>South Africa&#8217;s budget priorities have shifted over the past decade, with a growing focus on managing the national debt.<\/p>\n","protected":false},"author":101,"featured_media":755211,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[4771,2887],"class_list":["post-771803","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-debt","tag-tax"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/771803","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/101"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=771803"}],"version-history":[{"count":13,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/771803\/revisions"}],"predecessor-version":[{"id":772202,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/771803\/revisions\/772202"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/755211"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=771803"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=771803"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=771803"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}