Treasury insists stimulus will be applied with fiscal care
The Treasury has given the emphatic assurance that any stimulus package to ignite economic growth will not undermine fiscal prudence and will be funded through the reprioritisation of the existing budgetary resources. According to Business Day sources, the government will need R43bn to fund the stimulus package as well as to assist state-owned enterprises. This emerged from discussions about the package at last week’s cabinet lekgotla. Concerns have been raised over how a financially constrained fiscus that is facing pressures on both the revenue and expenditure sides of its budget would find the money for the stimulus package that was announced by President Cyril Ramaphosa two weeks ago. With sluggish economic growth expected to be lower this year than the 1.5% forecast by the Treasury at the time of the February budget, tax revenues are also unlikely to reach the targets set.
At the same time struggling state-owned enterprises such as Eskom, SAA and the South African Nationa...