Finance Minister Malusi Gigaba has warned against government borrowing money "irresponsibly". Picture: Phando Jikelo/African News Agency/ANA

Parliament - Finance Minister Malusi Gigaba has warned against government borrowing money "irresponsibly".

Gigaba was delivering his maiden Budget Speech on the National Assembly on Wednesday.

This is after it emerged that government was expecting to collect R1,345 trillion in 2018/19 financial year, which was not going to be enough to cover all expenses. An additonal R191 billion would need to be borrowed.

In the medium term budget in October, Gigaba noted that debt service costs were the fastest growing category of expenditure, warning that by 2020/21 financial year 15 percent of the main budget will be going to repayments, crowding out social and economic borrowing.

"We dare not borrow irresponsibly, leaving it to future generations to repay. Our fiscal interventions also demand greater efficiency in the use of funds across the public sector," he said.

He said government recognises the need to shift spending away from consumption towards higher investment, adding that over the past decade the public sector has invested R2.2 trillion in economic and social infrastructure.

The state also needed to contain the public-service wage bill to support higher levels of capital investment and maintenance.

Gigaba also said the main budget deficit would close over the medium term which will help to stabilise the debt-to GDP ratio at 56,2% by 2023/23.

Political Bureau