During times of economic crisis, it can be argued that the main lever any government possesses to tackle it, is its fiscal policy. That is, its choice on how much to spend, tax and borrow, and what to spend on. The 2023 Medium-Term Budget Policy Statement (MTBPS) takes a scythe to government spending, particularly its wage bill. 

Many have expressed dismay over the harsh fiscal discipline the MTBPS imposes on public spending. We want to focus on these concerns by examining the MTBPS’s implications for the national and provincial departments of social development (DSD). In how it erodes a budget that was already not fit for purpose, the MTBPS threatens to further strain the fragile web of social care (or welfare) services enabled by the DSD. 

These austerity measures, moreover, are introduced into a context of dire socioeconomic and environmental crises. 

More than 11.9 million people are unemployed by the expanded definition, and 62.6% of South Africans live in poverty. Not to mention that about a fifth of households lack access to adequate food, with eight million children not receiving enough nutrition. This takes place against the backdrop of a Constitution that guarantees socioeconomic rights, including the rights of everyone, and children in particular, to social services and social security. 

The nonprofit Shaping Hope and Leadership in Kliptown, Soweto, helps children after school with homework and gives them cooked meals. (Photo: Gallo Images / Fani Mahuntsi)

The risk to social services hinges on the finance minister’s understanding of what qualifies as labour-intensive work and how this conceptualisation will affect South Africa’s model of social care, which relies on the DSD and nonprofit organisations (NPOs) to provide services.

National Treasury made additional allocations to help the South African Police Service and the departments of Health, Basic Education and Correctional Services to fund wage increases for their employees. Not only is this funding insufficient for these departments, but other labour-intensive services have been entirely left out in the cold. 

This caring work cannot be provided by chatbots and algorithms but requires the forging of relationships between service workers and their beneficiaries.

The DSD and other departments are expected to absorb the public sector wage increase within their baseline budgets by “managing headcounts, such as by implementing controls on payroll systems to ensure executive authorities operate within their budgets when creating and filling vacant posts”. At the same time, headcounts must be managed to “avoid adverse effects on service delivery” and within the parameters of budgets further shrunk by other cuts introduced by the MTBPS. 

In effect, departments are being asked to do more with less.

Unemployment and desperation are rife in Klipplaat, Eastern Cape. (Photo: Donna van der Watt)

Social services are intrinsically labour intensive

Applying austerity to the DSD is misplaced for the simple reason that social care (or welfare) services are intrinsically labour intensive. Assisting adults and children living in precarious, violent and stressful circumstances, whose difficulties are often made more profound by their economic and social marginalisation, requires a host of constitutionally mandated supports characterised by emotional (and physical) labour. 

This caring work cannot be provided by chatbots and algorithms but requires the forging of relationships between service workers and their beneficiaries – relationships that cannot be spread over too many people, for once numbers increase beyond a certain threshold, the effectiveness of this form of relating is diminished. Thus, austerity pushed down to the level of social care services will result in a shrinking capacity of the DSD and NPOs to provide quality services.  

The consequences of the minister’s misunderstanding of the nature of caring work are likely to be particularly severe for the NPO sector – estimated to be underfunded by R9.2-billion, according to a 2018 performance and expenditure review commissioned by Treasury. With most NPOs subsidised by the provincial offices of the DSD, underfunding will continue; the MTBPS states that “provincial allocations will not increase in line with inflation” over the medium term. 

Some NPOs and the employment they provide may cease to exist in the face of these cuts. 

The Gauteng DSD’s call for business plans from NPOs, issued on the same day the MTBPS was tabled, already warned in bold capital letters: “The recently announced budget cuts by National Treasury for the next financial year will inevitably have implications on funding & the number of NPOs that the GDSD will be able to fund.”

The net effect of the MTBPS cuts will be to reduce, in violation of their constitutional duties, the availability of social care services and their quality.

NPO services are vulnerable for other reasons, with the provincial offices of the Eastern Cape DSD illustrating how their funding can be diverted towards wage increases for DSD staff. 

In the 2021/22 financial year, the Eastern Cape DSD cut R56-million from transfers to NPOs to pay an outstanding amount of occupation-specific dispensation to DSD employees. While programmes dealing with crime prevention and support, as well as substance abuse, were victim to the cuts, older persons were particularly hard hit, the department reducing by one-third the number of people able to obtain community-based services. Residential care for people with disabilities was reduced by 37%.

Waynique Carolus, one of scores of children living in abject poverty in Noordhoek, in Velddrif on the West Coast, faces a bleak future and is not sure when she will get her next plate of food. Photographed on 15 February 2022. (Photo: Joyrene Kramer)

Reducing social services is unconstitutional

If the disappearance of NPOs accelerates this year and over the medium term, the DSD will need to start offering services in their place. The MTBPS does not, however, provide funds for the staff complement or the budget for the DSD to do so. The net effect of the MTBPS cuts will thus be to reduce, in violation of their constitutional duties, the availability of social care services and their quality. 

These impacts are highly gendered.

Women constitute the majority of care workers and NPO social care services staff. Their jobs are at risk. A great many women also both require and rely on social care services. Should services disappear, care of older persons, children and family members with disabilities is more likely to fall to the women and girls in the households. The meals once provided by NPOs will also vanish, adding to the food insecurity of poor households (again, often headed by women).  

Treasury could blunt the sharp edges of the MTBPS in at least two ways. 

One is to ring-fence and protect NPO budgets from being plundered to pay for DSD wage increases, perhaps by structuring NPO subsidies as a form of conditional grant. 

Read more in Daily Maverick: MTBPS 2023 is a shoddy compromise that means death by a thousand cuts

Coupled with this should be the recognition that the DSD field social workers, who provide services rather than push papers about, engage in labour-intensive work. Their wage increases should, therefore, be supported through the National Revenue Fund. 

The Covid-19 pandemic and its aftermath scarred South Africa’s infrastructure of social care. Now, its institutions, the skills and experience of its workers, and the local ecologies of care and support, of which they are an intrinsic part, have been placed at further risk by the 2023 MTBPS. The minister of finance must rethink his definition of labour-intensive work and shield vulnerable lives from austerity’s grip.  DM

Lisa Vetten began her working life in an NGO care service and is currently a research associate of the Southern Centre for Inequality Studies and a research consultant in the University of Johannesburg’s Faculty of Humanities. Thokozile Madonko is a researcher managing the Public Economy Project of the Southern Centre for Inequality Studies at Wits University, and an activist, poet and climate campaigner.