JOHN STEENHUISEN: Runaway debt cannot be the new normal as debt is not free
Structural reform is the only way to return to balanced budgets and debt stability in the medium term
As finance minister Tito Mboweni prepares to present an adjusted budget next week, while staring into the abyss of a R250bn-odd budget shortfall, he will be acutely aware of how constrained SA’s options are.
Despite our already unsustainable debt situation before Covid-19, there is no realistic prospect of reducing debt and interest costs in the near term. There will be a precipitous decline in tax revenue as businesses close around the country and many more people lose their jobs. As revenue plummets, the deficit will soar. But this is certainly no time for the government to be cutting budgets for basic services...
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