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South Africa: Economists Warn Against 'Chaotic Budget Cuts'
GroundUp, 6 October 2023
We're not facing an immediate fiscal crisis, says Institute for Economic Justice Read more »
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South Africa: Proposed Austerity Measures Will Have Negative Impact On Most Vulnerable - Civil Society Coalition
Daily Maverick, 18 September 2023
A coalition of civil society groups has criticised the National Treasury's suggestion that VAT needs to increase or spending on crucial services must be cut if it is to fund an… Read more »
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South Africa: Cabinet Reiterates Calls for Budget Shortfall to Not Impact Service Delivery
SAnews.gov.za, 14 September 2023
Cabinet has reiterated that measures to address the budget shortfall must not impact negatively on service delivery. Read more »
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South Africa: Govt, Labour Cement Cooperation to Uplift Economy
SAnews.gov.za, 13 September 2023
Government and organised labour have agreed to work much more closely to speed up efforts for a more inclusive economy, job creation, and addressing poverty and inequality. Read more »
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South Africa: Govt, Labour Agree to Work More Closely On Addressing Challenges Facing Economy
Govt of SA, 12 September 2023
President Cyril Ramaphosa, government ministers and the leaders of organised labour (COSATU, FEDUSA, NACTU and SAFTU) met in a virtual meeting today, 12 September 2023 and agreed… Read more »
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South Africa: Date Set for Finance Minister's Medium Term Budget Statement
SAnews.gov.za, 11 September 2023
Finance Minister Enoch Godongwana is expected to deliver the Medium Term Budget Policy Statement (MTBPS) on November 1. Read more »
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South Africa: President Ramaphosa Calls Emergency Meeting With Labour to Avert Budget Crisis
allAfrica, 12 September 2023
President Cyril Ramaphosa has called an urgent meeting with organised labour to discuss the Treasury's proposals for harsh cuts to government budgets, including freezing all public… Read more »
Economists Warn Against 'Chaotic Budget Cuts' in South Africa
"Chaotic budget cuts" are not the answer to the shortfall between tax collections and government spending, the Institute for Economic Justice has warned.
In guidelines issued to national and provincial departments on 31 August, the National Treasury pointed to an "exceptionally large" drop in tax revenue of R22-billion for the first five months of the year. The Treasury said borrowing conditions for the government were tough, and the public sector wage increase hadn't been fully budgeted for. As a result, the Treasury instructed government departments to make some cost cuts for the rest of the year.
Previously, President Cyril Ramaphosa called an urgent virtual meeting on Tuesday, September 12, 2023 with labour federations over the state of the country's coffers, after a meeting with Treasury.
The government said in a statement that it had agreed with organised labour to work much more closely to speed up efforts for a more inclusive economy, job creation, and addressing poverty and inequality.
However, the Congress of South African Trade Unions (COSATU) said the usual meeting which takes place with government every few months did not cover the new proposals made by Treasury, on the actions needed to rescue the economy, MoneyWeb reported.
Treasury's proposals include the scrapping of specific government programmes and entire government departments to reduce costs. It has also mooted reducing the headcount in the public service by offering more attractive voluntary severance packages with a target of cutting 200,000 jobs.
An election year in 2024 is an important reason for the ruling African National Congress to try and avoid critical cuts to social grants and government programmes. The country's medium-term budget will be delivered by Finance Minister Enoch Godongwana on November 1, 2023.
