Reading the financial media last week one could be forgiven for thinking SA’s fiscal problems were a thing of the past, with headlines such as “Why Treasury is suddenly swimming in cash” and “Surprise: Govt to earn R100bn more than expected in tax”.

Yes, it is true that tax revenues surprised to the upside, but that is not the whole story. Here is another fact: in the first 275 days of the fiscal year, the government overspent by R433bn, or R1.57bn a day. When the government spends more than it raises in taxes it borrows the difference from the capital markets...

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