Defence budget will continue shrinking

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National Treasury allocations to the Department of Defence (DoD) for the national defence force, military veterans, Armscor and the Castle of Good Hope among others, have and will continue to decrease, according to the latest SA Yearbook.

According to the government authorised publication, Minister Thandi Modise’s department was allocated R52.4 billion for the 2021/20 financial year.

“As the DoD’s core activities are labour intensive, compensation of employees (CoE) is its largest cost driver, accounting for 61.4% (R88.4 billion) of total expenditure of R140.2 billion over the MTEF (medium term expenditure framework) period”.

“Following Cabinet’s decision to stabilise government debt over the medium term, the department’s budget for CoE is reduced by R3.9 billion in 2021/22, R5.3 billion in 2022/23 and R3 billion in 2023/24.”

This will see, the yearbook has it, CoE spending decrease at an average annual rate of 1.5%, from R31 billion in 2020/21 to R29.6 billion in 2023/24. The reductions will “mainly be effected by freezing salary increases for all employees”. Additionally, to remain in line with government’s ceiling for CoE spending, personnel numbers in the DoD are expected to decrease by 342, from 73 500 in 2020/21 to 73 158 in 2023/24 ascribed mostly to “natural attrition”.

“The DoD expects to fill only critical posts as they become vacant. Cabinet approved an overall reduction of 4.5% (R15.4 billion) on the DoD budget over the medium term.”

This will see expenditure decrease at an average annual rate of 4.5%, from R54.2 billion in 2020/21 to R47.2 billion in 2023/24. This includes reductions of R119.9 million in 2021/22, R145.2 million in 2022/23 and R140 million in 2023/24 on transfers to Armscor.



Other reductions, the Yearbook has it, will be effected proportionately across all programmes. These are given as CoE mainly; goods and services items, such as computer services, contractors, fuel, oil and gas as well as travel and subsistence and food and food supplies.