Budget cuts expose SA's public service crisis
While the government touts nominal increases in budget allocations, the harsh truth reveals a significant erosion of real-term funding.
Image: Rawpixel/Freepik
AS South Africa grapples with deepening inequalities and a faltering public service, the recently adopted Budget Vote Reports for 2025 expose a troubling reality: while the government touts nominal increases in budget allocations, the harsh truth reveals a significant erosion of real-term funding.
The Department of Public Service and Administration (DPSA), Public Service Commission (PSC), and National School of Governance (NSG) all face budget cuts that threaten to undermine service delivery and exacerbate existing disparities.
In a virtual meeting this week, the Portfolio Committee on Public Service and Administration, chaired by the DA's Jan Naudé De Villiers, confronted these critical issues head-on. The reports presented revealed a complex interplay between budget allocations and the pressing needs of public service delivery.
Julius Ngoepe, the committee content advisor, noted that the overall budget allocation for the DPSA for 2025/26 stood at R564 million, reflecting a nominal increase of 4.67% from R539m in 2024/25. He pointed out: 'This amount represents a decrease of 0.03% in real terms,' highlighting the painful reality of inflation outpacing budgetary growth.
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Next
Stay
Close ✕
Ad Loading
The DPSA's budget over the Medium-Term Expenditure Framework (MTEF) period is projected at R1.8 billion, with a staggering 54.4%, or R966m, earmarked for the compensation of employees (COE). This allocation raised critical questions about the sustainability of service delivery, particularly as spending on transfers and subsidies accounts for only 10.2%, or R178m, with R158m designated for the Centre for Public Service Innovation (CPSI).
During the meeting, members voiced their concerns regarding the budget's failure to address systemic inequalities within the public service. The EFF's Sixolisa Gcilishe, lamented the budget's failure to address systemic inequalities: 'The budget failed to address systematic inequalities in the public service as reflected in the wage disparities between top and lower management.' She further highlighted the inadequacy of the R300m allocated for administration in Programme 1, saying: 'Frontline workers remain underpaid,' and questioned the effectiveness of the budget cuts on service delivery.
The chairperson acknowledged the gravity of these concerns, saying: 'This was an internal meeting to consider and adopt the DPSA, PSC, and NSG Budget Vote Reports.' He emphasised the importance of documenting these discussions, urging members to reflect their views in the report.
Gcilishe insisted that 'the comments should be reflected in the report because the government would not be aware if they were only made in speeches and not documented'.
The meeting also saw a significant push for changes in the funding model for the Thusong service centres. The DA's Leah Potgieter proposed: 'The funding should be split among the various departments that were making use of the centres,' leading to an amendment in the recommendation. National and provincial departments providing services in the Thusong service centres should co-fund the centres to ensure their long-term sustainability.'
As the discussion progressed, the committee grappled with the implications of budget cuts on service delivery. The committee secretary, Masixole Zibeko, advised that some comments should be added to the report while others should be reserved for the Budget Debate. He cautioned members against introducing new recommendations at this stage, saying: 'Members had opportunities on two previous occasions to do so.'
The sentiment of dissatisfaction with budget cuts was echoed by Ngoepe, who said: 'Every sector had expressed dissatisfaction with budget cuts.' This sentiment was further reinforced by the MK Party's Japhta Malinga, who warned that adding new issues at this stage was 'not doing justice to the process'. The chairperson agreed, saying: 'The DPSA had a role to play, but solving youth unemployment was not the sole responsibility of the Department.'
The NSG's budget allocation for 2025/26 was also scrutinised, with Ngoepe presenting a budget of R228m, a nominal increase of 4.5% from R218m in 2024/25. Potgieter raised concerns about the allocation of more than 51% of the budget for administration rather than training programmes, saying the bloated administration and minimal training should be highlighted in the report. The chairperson acknowledged this as a valid concern, noting: 'This is a general concern in almost every department across government.'
In the PSC report, the overall budget allocation for 2025/26 is R302m, which represents an increase of 4.68% in nominal terms but a decrease of 0.02% in real terms. Langa emphasised the need for security measures for PSC commissioners, saying the critical role of the PSC commissioners and the need for protection against threats at all times should be reflected in the report.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
13 hours ago
- IOL News
Point of view: Santam's 2025 Insurance Barometer exposes rising risks across SA
Santam's 2025 Insurance Barometer reveals critical insights into the rising risks faced by South African households and businesses, highlighting economic pressures, infrastructure challenges, and the impact of climate change on the insurance landscape. Image: Freepik South Africa's short-term insurer, Santam, has released its 2025 Insurance Barometer, which paints a sobering picture of the risks confronting local households and businesses. Economic strain, infrastructure decay, crime, and increasingly erratic weather patterns tied to climate change have emerged as key concerns. Now in its fourth edition, the biennial report offers a detailed pulse check on global and local risk trends. Drawing insights from nearly 900 consumers, businesses, and brokers across the country, the report captures shifts in public perception alongside expert industry analysis. Atang Matebesi, CEO of Santam client solutions, said the short-term insurance sector must remain agile. 'Once again, weather volatility, infrastructure concerns, and socio-economic challenges have created a tough environment for local insurers. This has been exacerbated by ongoing geopolitical turmoil... threatening the affordability of the Motor and Heavy Haulage classes of insurance.' Matebesi noted a concerning development: 'A trend is emerging where vehicles that normally wouldn't be written off are being declared total losses because repair costs have skyrocketed due to costly imported parts affected by the geopolitical environment.' Balancing premiums while ensuring sustainable underwriting practices is an ongoing challenge. 'The industry has the unenviable task of balancing premium rates with sustainable underwriting practices and risk mitigation measures to ensure a sustainable insurance sector... thus also contributing to national economic growth,' Matebesi added. Claims trends and consumer pressures The Barometer reveals that Santam's MTN portfolio saw a spike in claims for stolen mobile devices, tablets, and laptops, largely due to petty theft and muggings in shopping malls. Motor insurance remains the main contributor to claims in both personal and commercial lines. While strategic underwriting has brought some relief, collision-related claims have surged as road traffic returns to pre-pandemic levels. 'This is largely due to road usage in South Africa returning to pre-COVID levels, driven by many companies reinstating five-day office attendance policies,' explained Matebesi. Infrastructure degradation is also playing a role, particularly road conditions. 'Potholes causing loss or damage to vehicles' have hit all sectors, including agriculture and heavy haulage, particularly hard. An emerging issue flagged in the report is the phasing out of 2G and 3G networks, which support many alarm systems and vehicle tracking devices. 'Close collaboration between insurers, insureds, and telecoms services providers is necessary... There is anecdotal evidence of the potential impact on property owners with those who have already had their alarms 'switched off' falling victim to crime,' Matebesi warned. The cost-of-living crunch Rising living costs are reshaping consumer behaviour: 40% have cut back on non-essential spending 27% have reduced essential monthly expenses 21% have tapped into savings Many South Africans are also changing their lifestyles: 38% now spend less on entertainment and eating out 23% have stopped going on holiday 19% drive less 14% opt for public transport or taxis more often 13% cancelled DSTV Some households have turned to borrowing: 7% took personal loans 9% borrowed from friends or family 15% invested in alternative energy to reduce electricity costs Business realities and risk gaps For corporate and commercial entities, theft remains the top worry, though concern has declined over five years. 'Persistent economic malaise remains a top concern for businesses at 19%. Interestingly, growing concerns over operational costs have emerged... likely related to economic pressures,' Matebesi said. A surprising disconnect was noted regarding business interruption (BI) cover. Despite ranking high on global risk indices, only 7% of local commercial respondents prioritised BI. 'The lack of emphasis placed on loss of profits is concerning; we believe business interruption is a massively underestimated risk,' Matebesi warned. Currency fluctuations made a noticeable jump, up 10%, amid global policy shifts and local political uncertainty, particularly around the Government of National Unity (GNU) budget delays. One bright spot came from the power front: South Africa marked 300 days without loadshedding in 2024. This led to a significant drop in power surge claims, thanks to improved grid stability and underwriting action. Climate risk remains entrenched, especially in agriculture. 'The agriculture sector is disproportionately concerned about climate risk,' Matebesi noted. Commercial claims linked to storms and flooding were up 5%, worsened by poor infrastructure and town planning. Top ten business risks in 2025: Theft (21%) Machinery/system breakdown (20%) Economic downturn (19%) Loadshedding/power surge (18%) Loss of profits (18%) Currency fluctuations (18%) Fires (16%) Climate change (16%) Staffing issues (14%) Crime (14%) Brokers evolve their role Brokers remain essential in risk mitigation. Most conduct home or site visits (72%) and communicate risk management tools via email or SMS (63%). Yet, one in three still finds coverage communication confusing. More brokers now prioritise affordability, 34% cite price as the top factor in choosing an insurer, followed closely by service excellence and claims reliability. Encouragingly, eight in ten intermediaries remain confident about business prospects in the year ahead, the data shows. * Maleke is the editor of Personal Finance. PERSONAL FINANCE
IOL News
a day ago
- IOL News
Budget cuts expose SA's public service crisis
While the government touts nominal increases in budget allocations, the harsh truth reveals a significant erosion of real-term funding. Image: Rawpixel/Freepik AS South Africa grapples with deepening inequalities and a faltering public service, the recently adopted Budget Vote Reports for 2025 expose a troubling reality: while the government touts nominal increases in budget allocations, the harsh truth reveals a significant erosion of real-term funding. The Department of Public Service and Administration (DPSA), Public Service Commission (PSC), and National School of Governance (NSG) all face budget cuts that threaten to undermine service delivery and exacerbate existing disparities. In a virtual meeting this week, the Portfolio Committee on Public Service and Administration, chaired by the DA's Jan Naudé De Villiers, confronted these critical issues head-on. The reports presented revealed a complex interplay between budget allocations and the pressing needs of public service delivery. Julius Ngoepe, the committee content advisor, noted that the overall budget allocation for the DPSA for 2025/26 stood at R564 million, reflecting a nominal increase of 4.67% from R539m in 2024/25. He pointed out: 'This amount represents a decrease of 0.03% in real terms,' highlighting the painful reality of inflation outpacing budgetary growth. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading The DPSA's budget over the Medium-Term Expenditure Framework (MTEF) period is projected at R1.8 billion, with a staggering 54.4%, or R966m, earmarked for the compensation of employees (COE). This allocation raised critical questions about the sustainability of service delivery, particularly as spending on transfers and subsidies accounts for only 10.2%, or R178m, with R158m designated for the Centre for Public Service Innovation (CPSI). During the meeting, members voiced their concerns regarding the budget's failure to address systemic inequalities within the public service. The EFF's Sixolisa Gcilishe, lamented the budget's failure to address systemic inequalities: 'The budget failed to address systematic inequalities in the public service as reflected in the wage disparities between top and lower management.' She further highlighted the inadequacy of the R300m allocated for administration in Programme 1, saying: 'Frontline workers remain underpaid,' and questioned the effectiveness of the budget cuts on service delivery. The chairperson acknowledged the gravity of these concerns, saying: 'This was an internal meeting to consider and adopt the DPSA, PSC, and NSG Budget Vote Reports.' He emphasised the importance of documenting these discussions, urging members to reflect their views in the report. Gcilishe insisted that 'the comments should be reflected in the report because the government would not be aware if they were only made in speeches and not documented'. The meeting also saw a significant push for changes in the funding model for the Thusong service centres. The DA's Leah Potgieter proposed: 'The funding should be split among the various departments that were making use of the centres,' leading to an amendment in the recommendation. National and provincial departments providing services in the Thusong service centres should co-fund the centres to ensure their long-term sustainability.' As the discussion progressed, the committee grappled with the implications of budget cuts on service delivery. The committee secretary, Masixole Zibeko, advised that some comments should be added to the report while others should be reserved for the Budget Debate. He cautioned members against introducing new recommendations at this stage, saying: 'Members had opportunities on two previous occasions to do so.' The sentiment of dissatisfaction with budget cuts was echoed by Ngoepe, who said: 'Every sector had expressed dissatisfaction with budget cuts.' This sentiment was further reinforced by the MK Party's Japhta Malinga, who warned that adding new issues at this stage was 'not doing justice to the process'. The chairperson agreed, saying: 'The DPSA had a role to play, but solving youth unemployment was not the sole responsibility of the Department.' The NSG's budget allocation for 2025/26 was also scrutinised, with Ngoepe presenting a budget of R228m, a nominal increase of 4.5% from R218m in 2024/25. Potgieter raised concerns about the allocation of more than 51% of the budget for administration rather than training programmes, saying the bloated administration and minimal training should be highlighted in the report. The chairperson acknowledged this as a valid concern, noting: 'This is a general concern in almost every department across government.' In the PSC report, the overall budget allocation for 2025/26 is R302m, which represents an increase of 4.68% in nominal terms but a decrease of 0.02% in real terms. Langa emphasised the need for security measures for PSC commissioners, saying the critical role of the PSC commissioners and the need for protection against threats at all times should be reflected in the report.
IOL News
3 days ago
- IOL News
Joburg landlord in legal battle over property renovated by tenant and later sold for R3 million
A Johannesburg man's ambitious plan to transform his rental property into his future home has resulted in a significant legal defeat. Image: Freepik A Johannesburg man's ambitious plan to transform his rental property into his future home has resulted in a significant legal defeat, as a court has denied his claims for reimbursement for renovations made while renting. The saga began in January 2010 when the tenant entered into a two-year lease with his landlord, setting an initial rent of R20,000 per month, along with utilities, and stipulating a minimum 10% escalation upon renewal. However, both parties opted to delete certain clauses from the lease contract, which later proved pivotal in the ensuing disputes. The landlord said this was done to remove any obligations he may have toward the leasing agent, Jawitz Properties. Meanwhile, the tenant claimed that they had reached an oral agreement that he would put in an offer to purchase the property as soon as his financial position allowed him to obtain a home loan. After the lease expired in 2012, the landlord shifted the rental agreement to a month-to-month basis, increasing the rent to R22,000. In August 2015, he relocated to Canada, and his mother, a qualified estate agent, managed the property, including the collection of rent and inspection of the property on his behalf. The rent remained constant until December 2017, when it was increased to R 28,000. During this time, the tenant was an erratic payer; he skipped monthly payments or sometimes paid for more than one month's rent at a time. In May 2018, the landlord's legal representatives informed the tenant of R36,000 owed in rent arrears and invited him to submit an offer to purchase the property, which was listed for sale at R3.6 million. The tenant proposed a cash offer of R3.3 million, which the landlord rejected. The property was ultimately sold in March 2022 for R3 million. Subsequently, the tenant was evicted in December 2021, reportedly owing approximately R1 million in unpaid rent. In an effort to recuperate some of the funds, the landlord sought relief in the Johannesburg High Court seeking at least R896,000 from the unpaid rent. Meanwhile, the tenant argued that there was a verbal agreement within the first two years of the lease and based on that, he made several substantial improvements to the property because he had plans to buy the property. Among the renovations was a R394,000 kitchen refurbishment and a R520,000 painting and waterproofing, which the tenant argued increased the property's market value significantly. He argued that because of the improvements, the market value of the property increased from R2.6 million to R3.5 million and that the property was ultimately sold for R3 million. The tenant claimed over R900,000 for contractual damages and, in the alternative, an unjustified enrichment claim of R400,000. Furthermore, he didn't deny that he did not pay rent between December 2017 until his eviction in December 2021. He only paid for two months in March and April 2018. He explained that he refused to pay the rent because the landlord unreasonably increased the rental by 21% from R22,000 to R28,000. On the other hand, the landlord didn't deny the renovations; however, he challenged the necessity of the improvements and the obligation to reimburse tenant the expenses incurred. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Acting Judge Sha'ista Kazee presided over the case and noted that from the evidence presented, no verbal agreement existed regarding purchase discussions. She highlighted that the tenant had been granted a formal opportunity to purchase the property, but his offer was not accepted. Additionally, under the terms laid out in the lease agreement, the landlord was well within his rights to increase the rent by a minimum of 10% every two years. The judge underscored that if only this escalation had been considered, the rent would have already exceeded R28,000 by December 2017. Regarding the renovations, the judge found that the lease agreement's Clause 12 expressly denies the tenant any entitlement to reimbursement for improvements made to the property. Stating that: "with or without the consent of the lessor, he shall in any event receive no compensation therefore and shall either at his own expense remove same immediately at the request of the lessor'. Meanwhile, it was also noted that no inspection was conducted when the tenant left the house and when he left, he removed some of the improvements he made to the property. This includes a geyser in the garage. He also took the solar geyser, his furniture and other movables. Ultimately, judge Kazee ruled in favour of the landlord's claim for R896,000 and ordered that the tenant pay the legal costs of the proceedings. IOL News Get your news on the go, click here to join the IOL News WhatsApp channel.
