SA spending more on social security

Thursday, September 28, 2017

Government has increased spending on programmes aimed at reducing poverty and improving social security for vulnerable citizens.

The Social Budget Bulletin -- launched by Social Development Minister Bathabile Dlamini at the Wits School of Governance on Wednesday -- shows an increase in non-contributory (where recipients do not make a contribution) expenditure from 4.7% of Gross Domestic Product (GDP) in 2001 to 7.2% in 2013.

Minister Dlamini said the expenditure was due to increased entitlements in social assistance, primarily child support grants.

The Social Budget Bulletin, a first for the Department of Social Development, is a broad assessment of the quality of the social security regime in South Africa. It examines outcomes between 2001 and 2013. It offers a consolidated perspective on all social security schemes, whether public or private, contributory or non-contributory and formal or informal. 

Due to the technical and resource constraints, the inaugural bulletin focuses primarily on social security rather than the broader social protection expenditure in the country.

The bulletin found that during the period under review, there was significant growth in the population receiving subsidised public health services from 37.9 million to 44.2, and the number of beneficiaries of social assistance increased from around five million to 16.1 million.

However, despite this seeming success, social security benefits for families and maternity protection remained below 1% of GDP, even though the department, through the South Africa Social Security Agency (SASSA), identified at least 11 million children living in poor households in 2013.

On the less positive side, the bulletin found that the country experienced limited economic growth, coupled with deteriorating social outcomes over the period under review. 

Despite this, top income earners increased their share of total earnings from 30% to 40%, even as levels of employment and poverty failed to improve significantly.

Minister Dlamini said the bulletin is a culmination of many years of engagement between the department, International Labour Organisation (ILO) and Wits University. 

She said the idea of developing a social budget for South Africa first arose in discussions with the ILO, which has assisted various other countries in similar undertakings. 

“Due to the insufficient capacity within the department, the volume and complexity of the work, we initially commissioned external consultants to develop the social budget model for the department.

“However, as the research and data collection was underway, it became evident that we would need to institutionalise social budgeting within the department, and this would require significant financial and technical resources over an extended period of time to yield the necessary long-term benefits.

“We therefore, decided to approach Wits University’s School of Governance to support the initiative. The primary reason for selecting this university stems from the fact that it is the only academic institution in the country that has established a Chair of Social Security, which also offers a Social Budgeting module as part of its curriculum,” Minister Dlamini said.

Through the publication, the department aims to assist in making many of the complex aspects of the social security system and its interactions more transparent and visible to both government and society at large.

Policy issues in social security system

The publication aims to assist in providing information on key policy issues in the social security system. These include the cost, affordability and sustainability of policies; completeness of coverage; adequacy of benefits and the balance between social and other sectors and between different components of social spending, and particularly the relationship between social transfers, job creation and unemployment.

Other key policy issues are the balance between social assistance, social insurance and private insurance, the efficiency and impact of the system and the need for redesign, as well as administrative reform.

ILO Social Protection Specialist for Southern and Eastern Africa, Luis Frota, said the purpose of the bulletin is to see the impact of social security in the economy. There is a need to have coherent stats on what constitutes social security, he said.

“It’s important to see the inside of social security spending. Now [through the bulletin], we are looking at statistics and trends on what is happening, and it’s important because you are telling the story and not relying on others to tell the story,” said Frota. – SAnews.gov.za

Most Read

SA News on Facebook