Wyndham Hartley

CAPE TOWN — The medium-term expenditure framework shows a shift of emphasis from social spending to infrastructure and economic services.

While spending on health has dominated budgets in the past, amounting to almost 60% of government spending, this will decline over the next three years to 57,9%. Defence and justice spending will also decrease to 17% from almost 19%.

The highest growth in spending is in the economic services and expenditure sector, at13,7%.

Spending on administration, with government capacity a crucial issue, will grow to 19,7% over the next three years.

Transport and communication infrastructure, and other economic services, will get large injections amounting to more than R150bn between 2006-07 and 2008-09.

Education will remain the largest recipient of state funds, largely through the provincial allocations, at 21,4% at the end of the three-year cycle. Welfare and social security spending will increase to 18,4%.

After peaking at a high of 6,6% of government spending, with the acquisition of the new weapons systems in the arms deal, defence spending declines from 6,6% of the state pie to 5,5%.

The justice system maintains its share, getting just under 12% of government spending and growing at 9,4%.

The budget in its entirety is growing at 11,4% over the three-year cycle.

The national treasury’s Mark Bletcher said the big news of the medium-term budget policy statement was the shift in emphasis of government spending.

"Not only is there an additional R78,3bn, but the budget shifts towards the built environment and economic services with emphasis on infrastructure, housing and transport," he said.

Manuel said in the budget documents that one of the priorities would be remaking SA’s built environment, addressing the quickening pace of urbanisation and upgrading all informal settlements by 2014.

"Built environment allocations over the 2006 budget average R36bn a year, and grow annually by more than 11%," said Manuel. "Government spending on the built environment is expected to be supplemented by extensive financing as agreed in the financial services charter, which makes a R42bn commitment to housing finance over five years, starting in 2006."