The estimated R102 billion needed for President Ramaphosa’s proposed R43 billion stimulus package and R59 billion bailout package for SOE’s begs the question of how this will be financed. This on top of the public-sector wage bill, now estimated to be R30 billion more than budgeted for in the Main Budget over the medium term.
This points to ongoing erosion of credibility of the National Budget and the fiscal framework, a notion recently highlighted by the IMF. It seems that once again Parliament is going to being used as a rubber stamp, a notion fiercely denied by Minister Nene during the National Treasury budget vote debates on 22 May 2018.
Every year since the 2008/9 financial crises, unsustainable expenditure has been justified to allow for boosting the ailing economy. This very same approach was followed last year under the then ceremonial Minister of Finance, Malusi Gigaba, which has not yielded economic growth or increased employment.
What this persistent unnecessary expenditure did achieve was a downgraded to junk status. The knock-on effects of which have contributed to the nearly 10 million unemployed South Africans.
To avoid any further downgrade, which would be disastrous for our economy, any additional spending must remain within the current budget. The ANC must accept that we cannot borrow our way to prosperity.
In all of this, the Finance Minister, Nhlanhla Nene has been uncharacteristically absent in the public domain. It seems that vital economic decisions are now made in the corridors of Luthuli House.
President Ramaphosa should not saddle South Africans with more debt as this will only worsen the country’s perilous economic situation. Minister Nene must reign in expenditure and refuse to be forced into making decisions that the country simply cannot afford by an ANC seemingly bent on economic implosion. The 10 million jobless South Africans deserve better than what the ANC continues to offer them.