State entity failures signal wider crisis
Auditor-general Kimi Makwetu finds 80% growth in irregular expenditure
Shocking irregular expenditure at government departments and state-owned companies alludes to a broader crisis of governance, economists say. On Wednesday auditor-general Kimi Makwetu announced an 80% growth in irregular expenditure in the public sector. Standard Bank chief economist Goolam Ballim said the findings pointed to "a broader crisis of governance" beyond what South Africans had become accustomed to. Such fiscal recklessness will anger taxpayers and could tilt SA towards a semblance of a tax revolt, Ballim said — especially in an environment where the tax burden, most notably personal income tax, had been rising. International credit ratings agencies are in town in November to review the sovereign rating amid concerns that the country may be downgraded to junk later in 2016. But Ballim said ratings agencies may balance the findings against efforts by the Treasury to centralise procurement and increase surveillance. "In some sense the auditor-general’s report is a look thro...
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