Budget Speech 2024: Saving Billions

Every February, regardless of who delivers the speech, we are told that the national budget requires discipline and tightening of belts to reign in expenditure. And almost every year that follows, the feedback is that real expenditure has exceeded previously forecasted amounts. 

So, as a fun exercise, let’s see if this year we can help identify some of the potential cost-saving areas. For this, we’re going to focus on the information we have access to in the public domain, nothing we have estimated on our own. And we’re going to limit this to just two areas of government expenditure because we certainly aren’t experts on all policy; we only have our calculators to help us.

Perhaps the greatest thing about public representation is the requirement for disclosure and transparency. While this isn’t always adhered to, some details cannot be avoided.

Let’s dive right in and look at some numbers shall we, starting with the ever-popular wage bill.

Parliamentary Wage Bill

The top half of the table paints two very different pictures, one of a developing economy, and one of a developed economy.

So why then does the second half of the table not reflect the same? 

Perhaps some context would help here. The average salary for a PHD-level lecturer at Wits University, according to Glassdoor, is R750 000 per annum. The average salary of a medical doctor, after 7+ years of medical school, is around R720 000 per annum. In comparison, the base salary for a member of parliament, excluding benefits and regardless of qualification, is around R1 200 000 per annum following the latest increase. 

If you’re lucky enough to be a Minister, that base figure increases by an additional R1 million. So, regular MPs earn 60% more than a lecturer at one of the top three higher learning institutions on the continent. But we value our teachers and nurses, and averages are often misleading.

While we’re looking at the wage bill of members of parliament, let’s add to this, the 55 000 government employees that currently earn more than R1 million. Most of these would likely be mayors, director-generals, deputy director-generals, premiers and so on. And most of them earn considerably more than R1,2 million.

If you’re fortunate enough to be the eThekwini city manager, R1,2 million is just your annual increase.

In truth, some of these individuals have the necessary academic qualifications and work experience to justify their wages.

But for the sake of this exercise, let’s assume for a moment all these parties would earn an equal amount of R720 000 per year, equivalent the medical doctors’ average.

What was the point of all this? 

If we cut just 55 000 specific salaries by 40%, bringing them in line with other civil servants, our R780 billion public sector wage bill would be reduced by R26,4 billion (3,3%) each year. Yes, that’s with a B.

And that is assuming none of these individuals currently earn more than R1,2 million.

If we look at the MPs in isolation, that would be a R220 million saving from 490 individuals. Moving swiftly along though, next we have VIP Protection.

VIP Protection

Now while this isn’t a significant amount compared to others in our budget, it is worth looking into for several reasons.

Firstly, the allocation for VIP security is over and above the base salary mentioned above for parliamentarians.

Secondly, the R3,4 billion spent on VIP Protection is specific to the protection of certain government officials, and not the public. By comparison, for contextual reasons only, the budget allocated to the Hawks sits at R2,2 billion for the year. Put differently, it is around 3,3% of the entire SAPS budget for the protection of the other 61 million South Africans.

Lastly, not all the government officials in the country qualify for VIP protection, only 280 of them do.

So, if we are to take the 280 that do, they account for R2 billion of the R3,4 billion allocated to VIP Protection. That works out to each receiving R7 142 857 worth of security per year on an even split basis. I suppose if only 22% of South Africans trust government, there is an argument for their lives being at risk, right?

And surely we can’t have the President taking his morning walk without any security. So perhaps we keep his R7 million allocation and save on the rest? Or even allocate a decent R400 million to this cause. The Deputy President could be covered in that too.

Let’s tally up our efforts

This shouldn’t be too hard to add up, but I’ve kept my calculator close just in case. R29 billion could be saved in five minutes of reading this, making it 1,28% of the total government expenditure for the current financial year (R2,25 trillion), which is more than half of the Presidential Employment Stimulus Package.

While this may not be a lot for some, it could certainly help the 58% of South African youth that remain unemployed or pay for more teachers and doctors. It could even fund a State Bank.

And all it would take would be a few lifestyle adjustments for some.

If anyone would like to borrow my calculator, please let me know. In the meantime, hopefully my former mathematics teacher will be proud of me showing all my workings.