PRIVATE MEMBER’S BILL
DA proposes statutory fiscal rules to curb rocketing state debt and guarantees
A law on fiscal rules will give Parliament authority over this critical aspect of the budget
The promulgation of statutory fiscal rules — the first in SA — has been proposed by the DA to put a brake on rocketing government debt and guarantees. Having fiscal rules as a statute would give Parliament authority over the critical aspect of the budget, which is normally just rubber-stamped by the legislature. Fiscal rules are used in about 89 countries including the UK. The Treasury uses an expenditure ceiling to curb spending, but this is only a self-imposed rule. The proposal is to cap the growth of net loan debt as a percentage of GDP. This percentage has soared from 21.8% in 2008-09 to 50.3% in 2018-19, with net loan debt rising from R526bn to R2.5-trillion over this period. Debt service costs, which will be R180bn in the current year, are expected by the Treasury to rise to R277bn in 2023-24, which is R30bn more than will be spent on basic education in the current financial year. DA finance spokesman David Maynier has proposed a draft private member’s bill, the Fiscal Respon...
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