Where does your tax money go after it has entered the state coffers? Recent data provide an overview of how national government distributes money to other levels of government.
Stats SA publishes financial data for the different levels of government (i.e. national, provincial, local, extra-budgetary accounts) and higher education institutions in separate reports throughout the year. These are followed up with a consolidated report in November that provides an overview of net government finances.2
Stats SA’s most recent release of data on national government finances, in the Financial statistics of national government1 report, shows that national government spent a total of R1,33 trillion in 2016/17. This is 4% higher than the R1,28 trillion spent in 2015/16.
The biggest spending item was financial grants. Not to be confused with social grants, financial grants are transfers from one government unit to another government unit, or to an international organisation. Grants are the financial fuel that keeps the wheels of government turning. In 2016/17, national government transferred R764 billion (57% of total spending) in the form of grants to other levels of government and international organisations.
So, who are the major beneficiaries of national government grants?
Provincial government received the bulk of grants in 2016/17, almost two-thirds of the R764 billion. This was 6% more than the amount received in 2015/16. This is expected, as the nine provinces are responsible for administering some of the core functions of government (for example, education and health). About 14% of the financial grants were transferred to the 257 municipalities. Just over 11% (or R87 billion) was paid to South Africa’s 252 extra-budgetary accounts and funds (8% more than in 2015/16).
R46 billion (6%) was paid to foreign organisations and international institutions. R39 billion of this amount was paid to the Southern African Customs Union (SACU), of which South Africa is a member. The New Development Bank (NDB), established by countries belonging to the BRICS group (Brazil, Russia, India, China and South Africa), received R3,5 billion.
South Africa’s 26 higher education institutions received R28 billion (4%) of national government grant transfers in 2016/17.
1 Download the latest Financial statistics of national government report here.
2 To find out more on the financial situation of the South African government as a whole, you can access a summary here.
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