Department of Defence running out of money for salaries as it faces more huge cuts

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The Department of Defence (DoD) has significantly overspent on employee salaries, to the tune of R12 billion over the last seven years, and is facing billions of rands of budget cuts this year, putting further strain on the SA National Defence Force (SANDF).

Parliament’s Portfolio Committee on Defence and Military Veterans (PCDMV) was on 6 September briefed by the Department of Defence on its first quarter 2023/24 performance as well as compensation of employee (CoE) challenges.

A presentation prepared by Chief of Human Resources, Vice Admiral Asiel Kubu, revealed R12.9 billion in irregular expenditure on the compensation of employees since the 2016/17 financial year as the SANDF spent more on salaries than was budgeted. For 2022/23, the CoE appropriation was R31 billion, but actual expenditure was R34 billion (the total defence budget for that year was R51 billion).

The DoD is struggling to find a solution to the problem in light of recent austerity measures. Part of the problem is the heavy use of Reserve Force members “due mainly to an increased requirement to support military operations, human resources capacity required in respect of compliance measures and to secure military installations. As at the end of July 2023, Reserve Force mandays have been exceeded by 251 521.”

“As a result of an unauthorised CoE expenditure for FY2022/23, a potential shortfall of R6.712 billion is anticipated during FY2023/24,” the DoD told the PCDMV. This includes the R2.8 billion salary shortfall from 2022/23; a R2.4 billion incremental increase (for salaries) that National Treasury will not be providing to the DoD; and a “R1.4 billion shortfall” this year.

According to a draft presentation seen by defenceWeb on the impact of National Treasury budget cuts affecting the DoD, the defence budget for 2023/24 is expected to be cut by around R1.9 billion, “in addition to the R2.4 billion salary increases which will not be funded and must be funded from within the already underfunded budget.”

The draft presentation ties in with the figures in the DoD’s 6 September presentation. “Total of approximately R6.3 billion cut for the next six months,” the draft presentation read. It said National Treasury in August briefed Cabinet about the weak economy and undercollection of revenue and consequent “drastic measures” to curb government spending with immediate effect.

The SANDF has been attempting to curb its wage bill by implementing, for example, the Mobility Exit Mechanism (MEM) and only recruiting Military Skills Development (MSD) members every second year. For 2022/23, R1.2 billion was saved on salaries, and an estimated R1.8 billion will be realised in 2023/24 as personnel exit strategies are implemented (1 300 personnel left in 2022/23 through the Mobility Exit Mechanism).

However, this has not proven enough, and these savings have been “eroded” by further cuts to the defence budget, the Department of Defence told the PCDMV.

To manage the more than R6 billion budget shortfall, the SANDF is expected to freeze spending on catering, conferences, workshops, and other related goods and services. New hirings will also be frozen, along with the advertising of new procurement contracts for infrastructure projects, unless approved by National Treasury.

SANDF’s death knell

Aviation and defence expert Dean Wingrin warns that “the further reduction in the defence budget will sound the death knell for the SANDF. It is already wholly underfunded, unable to maintain its current equipment and capabilities. It is only able to pay its soldiers by robbing the operational budget. Core capabilities have already been reduced and in some cases, lost. New equipment cannot be fully implemented.”

He went further say the SANDF may have already even lost the ability to fully carry out its mandate. “Not through incompetence (they’re human, so there will always be incompetence), but they have been let down by political and Government indifference.

“This is it. The SANDF will continue through inertia, but the end is in sight. The Government has been warned for years and cannot blame anyone else,” he stated.

The Government is left with two options, Wingrin believes: increase the defence budget to meet existing commitments; or establish a smaller SANDF with reduced capabilities and responsibilities in line with the existing budget.

African Defence Review Director Darren Olivier echoed this, stating: “Further cuts without substantially reducing the size, missions, and mandates of the SANDF will have extremely serious consequences.”

These consequences are already being felt, Deputy Defence Minister Thabang Makwetla told MPs on 6 September when covering the DoD’s first quarter performance. “Where we have not performed, it is because of limitation of resources. Limited resources make us not achieve the targeted number of hours at sea and maritime patrols…Look at deployments at borders – our borders are porous because we are not able to deploy enough people. The department has to look into defence capabilities because many of the targets are not achieved because of the budget.”

Makwetla bemoaned the fact that the SANDF is being funded less and being asked to do more, such as supporting the SA Police Service. The SANDF “can’t fail to turn up” to support them, he said.