The magnitude of the Aids epidemic in SA is underlined not only by the 5,4m people estimated to be HIV-positive, but also by the budget's staggering R6,7bn in grants to provinces to address the epidemic over the next three fiscal years. This is in addition to the discretionary provincial budget allocations for HIV and Aids.
It is encouraging to see that a priority of the 2006 budget is to strengthen education, public health services and social welfare services. However, the challenge remains whether the extra conditional grants for HIV in the education, health and social development sectors will be spent - and spent appropriately. The success of a budget is integrally linked to the successful implementation of its programme.
Antiretroviral (ARV) treatment, voluntary counselling and testing and prevention of mother-to-child transmission are budgeted for in the R1,6bn conditional health grant for government's HIV and Aids programme.
Though some provincial health departments have made great strides in spending previously allocated amounts, chances are that much of this will again remain unspent in the 2006/2007 financial year.
Health departments of the Free State, Limpopo and the Northern Cape, for instance, did not even allocate any of their provincial budgets towards HIV and Aids in 2005. This is despite high HIV prevalence rates, such as 30% in the Free State among pregnant women.
Considering that only 140 000 South Africans are receiving ARV treatment in the public and private health sectors, but that a further estimated 530 000 are in need of the treatment but not receiving it, one realises that throwing money at the problem will not make it go away.
About 80% of the total HIV budget is spent on health, with relatively little on education and social aspects. A health budget for an infectious disease is always the most prominent; however, with an epidemic on the scale that SA is experiencing it is necessary to focus on prevention. Failing this, the country will still have around 6m HIV-positive people by 2016 as new infections continue in the absence of an effective national awareness campaign.
The budget for HIV/Aids can therefore be seen as reactive and not proactive enough to stem the epidemic. The perception is that it is easier to treat HIV than to encourage everybody in the country to test for HIV and to protect themselves (whether they are disease-positive or -negative). But it is more expensive to fix the problem than to prevent it.
The Metropolitan Scenario Project has estimated that SA will have between 2,2m and 2,4m maternal orphans by 2015, as a result of a huge increase in Aids-related deaths. Orphans and vulnerable children are assisted through the child care and foster care grants. A significant change in the budget is that from April 2006 the department of social development will take full responsibility for social assistance grant programmes administered through the newly established SA Social Security Agency.
Other encouraging developments emerge from the 2006 budget. The provincial equitable share has received an additional R30,9bn over the next three years to strengthen education, public health services and social welfare services (including the reallocation of social expenditure to provinces). This will alleviate the impact that HIV and Aids will have on the economically active population now and in the future.
Also encouraging is the additional R78m allocated to the public service & administration department, for the implementation of an incapacity leave and ill-health retirement management framework.
The large numbers of working adults who take ill-health retirement or resign as a result of HIV-related illnesses, such as dementia and tuberculosis, will be helped by this framework.
The growing impact of HIV-related deaths on the retirement fund industry will affect government's ability to raise revenue from this sector. The 10%-15% increase in HIV-related deaths over the past three years has resulted in either benefit reductions to members of group life assurance schemes, or a reduction in retirement savings available after paying for the cost of death benefits.
The large reduction in tax on retirement funds from 18% to 9% will cost government an estimated R2,4bn, and a further reduction in retirement fund tax revenue as a result of a depletion of retirement savings will not be welcome.
In the minister's words, "To budget is to choose."
Let us hope the overall optimism of the 2006 budget leads to astute choices at provincial and local government level that result in the successful implementation of the comprehensive HIV and Aids plan. We need results. The 192 health facilities that provide HIV and AIDS care and treatment, as well as various other initiatives, need to be supported and expanded by public-private sector partnerships.
The new grant for such partnerships to invest in infrastructure and community services in low-income households is indeed promising, as these are the households most severely affected by HIV and Aids.
Nathea Nicolay is a senior manager with Metropolitan Employee Benefits specialising in HIV/Aids-related risk products
