Defence budget “increase” just under producer price inflation rate


The amount of money made available to the Department of Defence (DoD) and its two major components – the SA National Defence Force (SANDF) and the Department of Military Veterans (DMV) – has been increased by a just under the official producer price inflation rate figure of six percent and stands at R42,8 billion for the 2014/15 financial year.

In line with Government’s Cabinet Cluster approach defence expenditure is part of the overall defence, public order and safety spend. This accounts for 5,7% of the total budget expenditure of R1,25 trillion announced by Finance Minister Pravin Gordhan in Parliament yesterday.

This slight increase does not leave much room for manoeuvring by Minister Nosiviwe Mapisa-Nqakula and SA National Defence Force (SANDF) Chief General Solly Shoke as they have to balance increased demands for operational deployments against higher personnel levels and costs as well as projected new equipment acquisitions.
“In most respects the defence budget is a disappointment,” said military writer Darren Olivier following a study of the numbers. He points out the “increase” is below producer price inflation.
“This means a decrease in real terms. At the same time the Rand has depreciated by 20,1% against the US dollar since February 2013, meaning many SANDF costs has increased by at least the same amount as fuel, spare parts and equipment costs are usually in dollars, euro or pounds”.

Olivier is critical of the budget and those responsible for it saying “it displays no indication government understands or takes seriously the funding crisis that is squeezing the SANDF dry”.
“Most of the R2,6 billion increase is going to new acquisition projects and support for military veterans. The acquisitions, primarily new offshore patrol ships and new maritime patrol aircraft, are all desperately needed and long overdue but the half a billion Rand the DoD must spend to support military veterans puts even more strain on an already struggling force. Funding for military veterans should have come out of a separate budget,” said.

Another worrying factor for him is to be found in nearly 70% of the Army’s budget being spent on salaries.
“It’s clear compensation is far too high a percentage of the budget. To return this to a reasonable ratio the State must decide whether it will fund the SANDF appropriately for its mission, as suggested by the still-dormant 2012 Defence Review, or reduce the size of the force and the variety of missions it must perform.
“In short this budget will result in an actual decrease in operational funding for most of the SANDF, even as its operational commitments remain historically high. It’s going to be another difficult year for the SANDF,” Olivier said.

Heartening is the allocation of additional funding for border safeguarding, anti-piracy operations and peacekeeping missions in foreign countries. What will also be welcomed by the chiefs of arms of service involved is the transfer of R341 million from the Special Defence Account (SDA) and R100 million from the goods and services portfolio to the SA Air Force (SAAF) and SA Military Health Services (SAMHS). These funds have been earmarked for the air defence and military health support programmes.

The objectives of the air defence programme are to defend and protect the country and its airspace by providing four helicopter squadrons and a combat support helicopter squadron alongside three medium transport squadrons, an air combat squadron and 24 hour air command and control capability.

The extra funding allocated here will go to improve the SAAF’s helicopter and maritime capability sectors.

The military health support programme, tasked with providing health capabilities and services via five medical battalion groups including field hospitals and a specialist group for deployed and contingency forces, must also make available comprehensive multi-disciplinary health services to 302 000 members a year.

The contribution of the SANDF to continental peacekeeping missions and counter-piracy operations has been allocated R1,5 billion for the 2014/15 financial year. This includes R150 million for the South African component on the UN Force Intervention Brigade (FIB) in the DRC.

The long-awaited acquisition of maritime surveillance aircraft is scheduled for the 2015/16 fiscal term according to the Defence and Military Veterans Budget (Vote 22 of the Estimates of National Expenditure (ENE)). This will see as yet unknown aircraft replace the SAAF’s more than 60 year old fleet of C-47TP’s.

The Works Formation, created by the SANDF as an in-house facility for maintenance, repair and upgrades of military bases and other infrastructure in the face of apparent disinterest by the Department of Public Works, is housed in the SANDF Joint Logistic Services division which has an overall allocation of just on R2,5 million. A portion of this funding will go to providing new and replacing infrastructure via 16 projects as well as 36 maintenance and repair projects.

With the DMV gathering momentum as it starts to roll out various benefits for military veterans, R504 million has been allocated to bursaries, creation of job opportunities, healthcare and other veteran specific benefits as set out in the Military Veterans Act.