Since February, interest rates have gone up twice, the economy shrank in the second quarter and unemployment has risen to 33.6%. Tomorrow’s Medium-Term Budget Policy Statement (MTBPS) will show whether government is still serious about fixing the public finances.
The DA’s position is clear: we do not demand more spending. We demand better spending, faster reform and greater accountability. We will judge the MTBPS against five key priorities.
First, stabilise public debt. Government must keep its commitments to stabilise debt and grow the primary surplus. This year South Africa will spend R432.4 billion servicing its debt. That is money that could have gone to schools, clinics, police and roads.
Second, put a fiscal rule into law. We want the Minister to commit to a hard debt-to-GDP rule, written into law, so that future governments cannot borrow their way around difficult decisions. Discipline has to show up in real spending and realistic projections. Optimistic forecasts and one good year of tax collection are not enough.
Third, spend on the right things. Too much of the budget still goes to consumption, and too little to building and maintaining infrastructure. That must change, starting with restraint on the public-sector wage bill. Capital expenditure should be judged on whether it delivers working electricity, rail, ports and services, not on the size of the allocation. Someone should answer when departments underspend, delay projects or run over budget. Every rand spent must deliver value for money.
Fourth, speed up reform. Progress on an independent transmission company, an open electricity market and concessions on freight rail and ports has been too slow. Private investors need clear and transparent terms before they will commit. We want dates and milestones in this MTBPS, not promises carried over from previous budgets.
Fifth, fix failing municipalities. When the water and lights go off, businesses close and jobs go with them. Municipalities now owe Eskom more than R110 billion. Debt relief should come with strict conditions and consequences for municipalities that don’t meet them. Financial support must buy reform, not simply put off the next crisis.
Tax collections are expected to come in well above February’s estimates. That money should not be locked into new permanent spending. Paying down debt and supporting growth must come first.
South Africans have heard enough promises. Tomorrow, government needs to show it can live within its means and deliver.