South Africa’s public service: real spending is falling, but demand is growing

Core public services – basic education, healthcare and criminal justice – account for a large share of the consumption basket of poor South Africans. They are provided largely free of charge to any user. The public provision of these services is widely recognised as a cornerstone of social and economic development in any society.

Together, they account for three-quarters of government’s wage bill and half of spending on goods and services – the medicine, books and cars that doctors, nurses, teachers and police officers need to do the job. Over the last decade, there has been a chronic and deepening erosion of the resource base on which public services depend. Users of these public services have been caught in the middle of government’s need to consolidate the fiscus on the one hand, and the demands of public sector unions for better pay on the other.

In a recent report, we appraise the choices made in the government’s budget statements, and numbers that are tabled as part of those statements. We argue that the fiscal consolidation as currently proposed will significantly reduce real spending on core public services. It will erode the quality and reach of these services, and widen income inequality in South Africa. These choices are at odds with the constitution. They will certainly lead to a retrogression in socioeconomic rights.

Government has provided no evidence that suggests a contrary conclusion. Nor has it presented any plans or policy interventions to alleviate the damaging effects of fiscal consolidation on public services.