Defence budget up
Date: 11 February 2009
By Leon Engelbrecht
Finance Minister Trevor Manuel has boosted defence spending from R28 233 billion to R32 024 billion, or some R2.1 billion more than it was set to receive under previous estimates.
But the Estimates of National Expenditure (ENE) show the South African military will essentially receive the same - R32 389 billion next year and R34 418 billion the year after.
The document notes that between April 2005 and April 2008 expenditure increased from R23.5 billion to R27.9 billion at an average annual rate of 5.9%.
"Over the medium term, expenditure is estimated to increase to R34.4 billion in 2011/12, at an average annual rate of 7.3%.
"These increases are due to the inflation related adjustments on operating expenditure, the annual salary increases of government employees, and the procurement of the Gripen advanced light fighter aircraft and the A400M strategic airlift capability," the ENE says.
The Air Defence programme dominates expenditure for the next three years ("the MTEF period"), consuming 32.1% of the department's total budget in 2009/10, because of the procurement of the Gripen aircraft and the A400M strategic airlift capability.
From this April the Landward Defence programme takes up 27.3% of the total budget, while the other two big programmes, General Support and Military Health Support, take up 10.4% and 7.6%.
Next April the composition of the department's budget changes to 31.2% for Landward Defence, 29.4% for Air Defence, 12.4% for General Support, and 8.7% for Military Health Support.
"The change over the medium term is due to: the initiation of some Landward Defence equipment renewal projects; increases in the provision for the military skills development system; increases for the repair and maintenance of defence infrastructure and facilities, including the runways and hardstands at Air Force Base Waterkloof; and increases in the provision for ongoing training of reserves.
"Expenditure in the Administration programme, which is dominated by the departmental property management portfolio, grew at an average annual rate of 10.4% between 2005/06 and 2008/09 and is expected to grow at an average annual rate of 11.7% over the medium term due to increased accommodation charges.
"Compensation of employees is the largest expenditure item in the budget, amounting to R11.8 billion, or 36.7% of the total budget in 2009/10. Transfers and subsidies amounts to R11.1 billion, or 34.7% of total expenditure in 2009/10. Goods and services amounts to R8.5 billion, or 26.5% of total expenditure in 2009/10.
"Over the medium term, compensation of employees increases to 38.2%, goods and services to 31.5%, and transfers and subsidies to 28.3%. The projected 3.3% decrease in transfers and subsidies is the strategic defence procurement programme which will be completed in 2011/12, and the strategic airlift capability, which will be gradually completed over the medium term," the ENE says.
Source: DefenceWeb
