Finance minister Pravin Gordhan has trimmed this year’s defence budget R700 million, but has pencilled in increases for the next three years that will take military spending to R41 billion in 2012.
Gordhan has cut R699 128 from the 2009/10 defence budget in his adjusted budget tabled today. Vote 19 allocated R32 024 384 to defence in February. The new amount is R31 325 256.
The cut is less than expected. In June it was reported that Treasury had cut the defence budget by R1.98 billion over the medium term, taking R740 469 000 from the current budget, R644 137 000 from next year`s and a further R595 638 000 from that of FY 2011/12.
It is not clear if these cuts will still be made.
Curiously, the Medium Term Budget Policy Statement (MTBPS), on its page 58, puts the revised budget at R34.1 billion for FY2009/10.
The R2.8 billion discrepancy could be the state security (intelligence budget). This was last year included in the defence budget under a joint heading, “defence and intelligence”. There is no separate entry for state security in the document tabled today as the actual figure is “classified”, but defenceWeb earlier this year estimated that budget at R2.4 billion.
The state security budget may, however, be hidden elsewhere in the MTBPS.
Next year’s budget – according to figures released this February – was to have been R32.389 billion. It will now be R36.5 billion, about R4 billion more. Because of the above ambiguity it is not certain all of this is for defence.
Even so, the 2011 budget has also been boosted from R34.418 billion to R39.3 billion, an increase of some R5 billion. The 2012 budget is set to be R41.9 billion, according to medium term Treasury estimates.
This increase comes despite South Africa being in its first recession in 17 years and the worst global financial crisis since the 1930s. It also comes in the face of ballooning state expenditure and a fall in government revenue.
The budget increase comes close to the figures sought by the defence department in its 2007/8 Annual Report. That document avered that defence needed R41.3 billion in the 2011/12 financial year (it is getting R39.3 billion) to finance a credible force design (CFD) that can support a revitalised military as well as current peace operations – a key plank in SA’s foreign policy.
The DoD wanted R45 billion in 2017 and R46 billion by 2023, at which level spending would stabilise.
The current budget amounts to about 1.3% of Gross Domestic Product (GDP); or less than five cents out of every Rand government spends.
Earlier this year, the then-Portfolio Committee on Defence recommended an increase to 1.7%. The defence department says the CFD shows “a requirement for a defence allocation of 2% of GDP.”
The annual report warned that if the money had not been forthcoming, the SANDF would have to shrink to a size that “is both viable and sustainable over the long term.”
Certain defence capabilities would be reduced and other defence capabilities would be “completely lost,” it added, with the country facing “significant” national security risks and the SANDF going forward with severe limitations.
Pic: A column of Ratel infantry fighting vehicles from 1 SAI Bn advancing during an exercise at the SA Army Combat Training Centre at Lohatlha in 2006.