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Deep spending cuts of over R140 billion over the next two and a half years are in the pipeline as Treasury adapts to lower tax revenue, higher borrowing costs, and higher wages for public servants agreed to earlier this year.
At this stage, the budget reductions for the next two years are across the board by economic function as the specific programmes and functions are still to be negotiated with departments, said Treasury director-general Duncan Pieterse. The cuts will be informed by the in-depth spending reviews conducted by the Treasury over the past two years.
The immediate cuts of R21 billion – that will take effect over the next six months – include deep cuts to housing, higher education and health, in particular the HIV/Aids budget. But in all three cases, the cuts are due to underspending or a mismatch in funding. In the case of the almost R1 billion cut to the HIV/Aids budget, Treasury notes that the number of people - in particular men - who reliably take their HIV medication has fallen.
