1 / 33

Funding Public Health Care: Constitutional constraints and budgetary processes Alison Hickey AIDS Budget Unit, Idasa 1

Funding Public Health Care: Constitutional constraints and budgetary processes Alison Hickey AIDS Budget Unit, Idasa 10 February, 2004. Handouts: Idasa Budget Guide and Dictionary Budgeting for HIV/AIDS in South Africa

mayes
Download Presentation

Funding Public Health Care: Constitutional constraints and budgetary processes Alison Hickey AIDS Budget Unit, Idasa 1

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Funding Public Health Care: Constitutional constraints and budgetary processesAlison HickeyAIDS Budget Unit, Idasa10 February, 2004 Handouts:Idasa Budget Guide and DictionaryBudgeting for HIV/AIDS in South Africa Where is HIV/AIDS in the Budget?: Survey of 2003 provincial social sector budgets Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  2. Purpose of today’s presentation:Give you a clear picture of what Constitution says on public funding for health care, and how, in practice, budgets for health care are allocated at all levels of governmentOutline: 1. How govt raises funds and divides money between natl, provincial and local govt2. Basics of the government budget process Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  3. The Constitution says which sphere of government can levy or collect which types of taxes. • National Revenue Fund where all money received by natl govt must be paid. Income tax, VAT, corporate tax, customs duties • Provincial revenue: 4% own revenue, 96% from national government Flat-rate surcharges on some natl taxes. Main types of provincial own revenue: road traffic fees, hospital fees, gambling levies • Local government revenue: 83% own revenue, 17% transfers Property rates, utility fees (e.g. electricity) Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  4. Education (at all levels excluding tertiary), health services and welfare services are listed as concurrent functions of natl and provincial govt. • They are shared responsibilities, with national determining policy and provinces responsible for delivery. • Social spending over 80% of provincial budgets Education:40% Health: 24% Welfare:19% • Local govt primarily concerned with delivery of basic services including water, sanitation, electricity, and refuse collection • Municipal health services undergoing changes with recent National Health Act. 2. The Constitution also assigns specific powers and functions to each sphere of government. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  5. 3. According to the Constitution, Section 227 (1): • Local government and each province is entitled to an equitable share of revenue raised nationally to enable it to provide basic services and perform the functions allocated to it; • May receive other allocations from national government revenue, either conditionally or unconditionally Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  6. 4. Parliament must pass an annual act called the “Division of Revenue” which tells how nationally-raised revenue will be shared between 3 spheres of government. Section 214 (1) • Top slice (debt service, contingency reserves) • Vertical split(executive/political decision) Excluding top slice: 39% national 57% provincial 4% local government • Horizontal split between provinces(determined by formula) • Horizontal split between municipalities(determined by formula) Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  7. 5. National government sends money to the provinces in two different ways. 1. Equitable share grant • Grant to each province unconditionally. Provinces free to distribute funds between departments according to their own budget processes. • Technical formula to divide funds based on relative need. Biased towards poorer provinces. 2. Conditional grants(earmarked funds from national to provinces) • Funds added to the Equitable Share for HIV/AIDS is a special case. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  8. Local government revenue? • National govt provides an Equitable Share grant to each municipality. (nearly 50% of natl transfers to LG) • Major conditional grants to municipalities (administered by DPLG) • Municipal Systems Improvement Grant (collection capacity-building and restructuring grants; administered by DPLG) • Municipal Infrastructure Grant (amalgamation of number of capital grants e.g. water, public works, electrification, transport) Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  9. 3 year rolling budget Medium Term Expenditure Framework 1. Drafting phase Four stages of the budget process: 2. Legislative phase 3. Implementation (financial year begins 1 April) 4. Auditing Parallel national and provincial budget processes Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  10. 1. Executive determines medium-term spending priorities. • (April-Sept) The steps in drafting the budget 2. Natl and prov depts prepare MTEF budget submissions.(April-Aug) 3. Macroeconomic and fiscal framework and DOR debated between July and August. Budget Council makes final recommendation on DOR between provinces in Sept. DOR approved by Cabinet. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  11. 5. Medium Term Budget Policy Statement Adjustments Estimate Division of Revenue Bill introduced into Parliament (Nov) 4. MTEC hearings held between Natl Treasury and separate departments. (Sept-Oct) Steps in drafting the budget, cont. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  12. 6. Minister of Finance presents budget in Parliament on Budget Day. Also Division of Revenue Bill. (18 Feb 2004) Steps in drafting the budget, cont. 7. Provincial budgets tabled in provincial legislatures. (Feb-March) Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  13. Can Parliament amend the budget? • Section 77 of Constitution gives Parliament power to amend money bills. • Constitution says an act of Parliament must provide for a procedure to amend money bills in Parliament. This legislation yet to be passed. • Civil society organisations interested in stronger amendment powers for Parliament. • National Treasury and Parliament currently working on amendment powers legislation. For now, theoretically: • Parliament cannot make changes but could vote down the entire budget. • Parliament can amend the DOR Bill. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  14. * With respect to HIV/AIDS treatment and care, critical area to watch is provincial budgets—not national. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  15. Appendices Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  16. The important budget documents • written by National Treasury & available from Government Printer. • Medium Term Budget Policy Statement (MTBPS) Budget estimates for current budget year and two following years. Includes macroeconomic projections, amount going to provinces, main policy choices • Intergovernmental Fiscal Review (IGFR) Analysis of provincial expenditure by sector (health, education, welfare) Also covers municipal budgets and capital investment in local government • November • October Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  17. Important budget documents cont. • Available on national Budget Day from government printer: • Estimates of National Expenditure • Budget Review • Budget Speech by the Minister of Finance Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  18. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  19. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  20. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  21. 1. What share of the national budget is allocated for health? • Abuja Declaration 2001—15% target Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  22. 2. How much is specifically targeted for HIV/AIDS interventions? Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  23. Public health & HIV/AIDS budget allocations and proportions in real terms Audited Prelim. Outcome Rev. Est. Voted MTEF MTEF 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 Total public health expenditure (Nat+Prov+CG) 31,967 33,834 34,026 35,731 36,902 37,660 R million, real terms Total Public Health Expenditure as Proportion of GDP 2.96% 3.03% 3.04% 3.07% 3.06% 3.01% Total public health expenditure as a share of total expenditure 11.56% 11.60% 11.66% 11.35% 11.33% 11.16% Total provincial health expenditure as a share of total provincial expenditure 24.02% 24.27% 22.40% 22.37% 22.16% 21.72% Total HIV/AIDS targeted allocations R billion 0.214 0.349 1.004 1.952 2.950 3.568 Nominal % Increase in HIV/AIDS allocations 63.1% 187.7% 94.4% 51.1% 20.9% Total HIV/AIDS targeted allocations as a share of total health expenditure 0.79% 1.18% 2.87% 5.00% 6.93% 7.81% HIV/AIDS as percent of consolidated expenditure 0.1% 0.1% 0.3% 0.6% 0.8% 0.9% Prioritization of Health and HIV/AIDS Expenditure in SA Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  24. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  25. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  26. Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  27. Roles and responsibilities of health departments Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  28. Budget Implications of Division of Roles and Responsibilities i.r.o. of Health Total National health expenditure in 2003/04 = 8.4 billion National health expenditure excl. transfers in 2003/0 = 602 million Projected consolidated total provincial health expenditure in 2003/04 = 36.6 billion Consolidated Health conditional grants to provinces amount to 7.4 billion Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  29. Budget Implications of Division of Roles and Responsibilities i.r.o. of Health • 93.3% of natl DoH budget is transfers, mainly to provincial departments (conditional grants) • 88% of natl health expenditure goes to provinces as cgs • National health expenditure is less than 2% of consolidated provincial and national health expenditure • 98+% is spent on service delivery in the provinces (through conditional grants and equitable share allocations). • Cgs about 20% of consolidated provincial health expenditure Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  30. budget inputs: funds, resources budget outputs: medicine, vaccinations, HIV tests budget outcomes: improved child health How does budget analysis fit in the oversight role of committees? Structures and institutions for implementation Impact of programme or policy Service Delivery Policy Budget Indicators?How do we measure inputs, outputs and outcomes? Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  31. Departmental budgets Programme budgets Divided into separate line-items National / Provincial budget National Budget National Vote 16. Health National Vote 16. Health Programme 2: Strategic Health Programmes National Vote 16. Health Programme 2: Strategic Health Programmes Sub-Programme 2.1: District Health Systems Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  32. Examples of health policy developments impacting on budget allocations • PHC: Need for new and upgraded clinics => Infrastructure Conditional Grants • PHC: Negotiations around the division of responsibility around PHC => Transfer payments • Nutrition Programme: Adoption of PSNP Review recommendations => Integrated Nutrition Programme Conditional Grant • Hospital Services: Infrastructure backlogs => Hospital Revitalisation Grant • Hospital Services: management improvement => Hospital Management and Quality Improvement Grant Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

  33. Examples of key health policy developments impacting on budget allocations • Personnel: distribution and scarcity of health personnel => provincial health budgets: personnel item • Non-personnel inputs: increased prices of medical equipment and consumables => provincial health budgets: machinery and equipment item, stores and livestock item • Legislation: Mental Health Care Act => provincial budgets: specialised hospitals sub-programme • Legislation: New National Health Bill => Act => implications for national, provincial and local government responsibilities and budgets • Free medical care for people with disabilities => provincial health budgets • Other??? Alison Hickey ~ AIDS Budget Unit, Idasa ~ 10 February 2004

More Related