On Wednesday 1 November, Minister Enoch Godongwana will deliver the Medium-Term Budget Policy Statement (MTBPS) to Parliament. Fiscal policy can play a crucial role in fostering growth and development by ensuring the sustainable delivery of essential public services. Previous MTBPSs, as well as the latest National Budget, have shown National Treasury’s continued commitment to curbing spending on services, grants, and infrastructure. In anticipation of the MTBPS, over 100 Economists, CSOs, and researchers have rejected this austerity philosophy that cutting government spending will resolve the longstanding growth and social crises as well as the debt trajectory of our country. Instead, the fiscal framework needs to be used to advance inclusive development.
We are calling on the Minister of Finance to intentionally put the constitutional rights and well-being of communities and workers first over narrow and often unjustifiable budget deficit targets, that will do little to alleviate the crisis of unemployment, poverty, and inequality and build a more inclusive economy. In fact, failing to fund social provision can erode the credibility, performance, and quality of the medium-term fiscal framework. Over time, this can weaken effective public administration, and negatively impact clear oversight, participation, and control over the budget. Over the longer term, it is not clear how much further and how much longer government spending can be cut without aggravating South Africa’s deep political fissures, leading to social unrest…
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