Public Expenditure in South Africa: An Assessment of Trends and the Process of Determining Priorities

Since 1975/76 the functional expenditure categories “general government services” and “education” were allotted an increased proportion of national resources in South Africa. There is evidence that changes in central government expenditure priorities have been effected incrementally, i.e. through rising government expenditure/GDP-ratios. This, together with an increasing tendency to exceed central budgeted expenditure, emphasises the need for a proper process of determining expenditure priorities, especially in view of envisaged growing expenditure needs. This is described as a fiscal iteration process. Recent innovations in South Africa are examined with reference to international experience in the light of certain principles.