The fiscal path the budget statement presents clearly cannot be sustained
Without well-considered reform in the political construct at the December ANC electoral conference, the stakes have risen for a profoundly negative economic scenario
For the first time since 1994, there is task team set up to deal with the fiscal challenges facing SA. It is led by the minister of finance who will report to President Jacob Zuma. The goal of this focused and select team is to come up with the actions needed to restore the sustainability of fiscal policy, and which will be put forward in the February 2018 budget. Fiscal authorities at the Treasury have performed an honest assessment of the fiscal matrix in the medium-term budget policy statement (MTBPS) and painted a worrisome picture. Contrary to the previous budget formulation processes, what came out of this MTBPS was only a diagnosis of the problems, and the fiscal hole was quantified. The medium-term budget did not indicate how these issues would be solved. Instead, all potential actions and resolutions have been deferred to the presidential task team on fiscal policy, with an expected delivery on the outcomes in the February 2018 budget. This represent a fundamental shift awa...
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