JOHANNESBURG - Finance minister Tito Mboweni’s maiden medium-term budget policy statement reveals a full-scale budget blowout, which is clear evidence that the new path of economic growth, employment and transformation has failed in South Africa, the main opposition Democratic Alliance said on Wednesday.
The policy statement presented to parliament signalled stagnant economic growth, lower-than-expected revenue, higher-than-expected expenditure and "bail-outs” of state-owned enterprises including a R5 billion rescue of national airline South African Airways, DA shadow minister of finance David Maynier said.
"The fact is that, compared to main budget 2018 (presented in February) there will be significant “fiscal slippage”," he said, highlighting the projected R22 billion increase in the fiscal deficit in 2018/19, widening to R33 billion in 2019/20 and R41 billion in 2020/21.
"What this means is that debt service costs will skyrocket to a staggering R247 billion in 2021/22, which is R148 billion more than we will spend on police, R55 billion more than we will spend on social grants, and is equal to what we will spend on basic education this year, 2018/19," Maynier said.
He said ordinary people battling to make ends meet and put bread on the table were likely to be hit by further tax increases over the medium-term, to effectively “bail-out” the governing African National Congress which he said had mismanaged the economy for more than a decade.
"We have an expenditure problem and must now implement a Comprehensive Spending Review aimed at reducing national debt and debt service costs, over the medium term between 2019/20 and 2021/22," Maynier added.
- African News Agency (ANA)