The medium-term budget policy statement, presented a mere two weeks ago, has been thrown into question as a joint team from the Treasury and the Office of the President comb through it, looking for R40bn in expenditure cuts to fund free higher education. The policy statement is intended to act as guide to the February budget, both to government departments and the market. Its drastic revision indicates a profound loss of influence of the Treasury and will dramatically affect the pending decisions by credit ratings agencies. It also indicates that the prospects of fiscal consolidation and of returning to the pre-October debt stabilisation programme are minimal. The move has already led to the resignation of the head of the budget office, Michael Sachs, last week, with more Treasury officials expected to follow. However, Treasury director-general Dondo Mogajane is adamant that the change to the budget process does not amount to a coup by the Department of Monitoring and Evaluation, he...

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