This year’s national budget takes on critical importance. Public sector debt has more than doubled over the past 10 years, leaving very little fiscal room to manoeuvre; Eskom is operationally and financially in crisis and will need public funds and significant restructuring to survive; an election is looming; spending demands are rising; new tax options have largely been exhausted; and economic growth is disappointingly weak. Meanwhile, ratings agencies are again lurking and bond investors growing more sceptical. The fiscal arithmetic is not encouraging. To start reducing debt and therefore the interest bill, the government must either run a primary surplus, where noninterest spending is covered by revenue collections, or real economic growth must exceed the real interest rate paid by the fiscus. The first option — reducing spending — has been complicated by the legacy of past excesses and ineffective delivery.

In the first three years of Jacob Zuma’s presidency, the public se...

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