Specifically, around 40 percent of provincial government expenditure is for primary and secondary education, teachers and technical colleges, and special education; almost 90 percent of this expenditure is for personnel costs; 22 percent is for health services, although in provinces such as Gauteng that supply academic health facilities this share increases to 34 percent of total expenditure, with 55 percent of this expenditure for personnel costs; and 20 percent of their expenditure is for social security and welfare, where the provinces simply serve as a channel for payments made to individuals under national government norms.
In 1996, the average salary of a teacher, including bonuses, was R 61,000 a year, and non- wage costs were around 40 percent of wage expenditure. This implied an average grant per child of R 2,250 a year.
The average cost was R 240 a visit in 1996.
Financial and Fiscal Commission, The Allocation of Financial Resources from the National and Provincial Governments for the 1997/98 Financial Year, May 1996, page 14.
Rural shares of total provincial population vary from less than 15 percent in Gauteng and Western Cape, to more than 90 percent in Northern Province. Table 1 seems to indicate a positive correlation between poverty and rural population shares.
Since all borrowing accrues to the national government to pay for its expenditure, the total amount of revenue available for distribution between the national and provincial levels has to be reduced by the magnitude of the change in the programmed budget deficit so that the burden of adjustment is not borne only by the national government.
For example, the share of welfare in total expenditure in the Northern Cape is double that in some other provinces.
Nevertheless, not all taxing powers should be assigned to provincial or local areas because this deprives national government of a macroeconomic tool and has income inequality problems.