Prudence, that's what's required of the keepers of the national purse. To be anything but cautious with the country's affairs would send South Africa Inc down a rabbit hole. The fiscal position we are in requires a word that does not sit too comfortably with the political principal at the helm of Treasury - austerity. We aren't quite at European levels of discomfort, nowhere near those of France and even Germany. But for South Africa and most emerging-market economies faced with high inflation, it's a problem best met with high borrowing costs. While South Africa's debt position is comparatively better than those in developed climes, further increasing debt would be severely punished by a steep rise in financing costs. The state has reached its spending ceiling, and spending as seen in this week's budget has to be reduced. The Treasury faces running battles with most government departments. Ratings agencies - which have had the country on the brink of "junk" status for more than a y...
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