There is a simple explanation for the shocking deterioration in SA’s public finances: growth has been too slow for too long and, instead of cutting expenditure to bring it in line with the reduced revenue-generating capacity of the economy, SA has indulged in fake consolidation.

On the surface, the fiscal consolidation of the past five years looked real enough. After all, the Treasury imposed a hard expenditure ceiling on the government and almost always stuck to it. But it simultaneously allowed the public wage bill to balloon and state-owned enterprises to run amok, and introduced new unfunded policies at every turn.

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00.