Gigaba: Govt looking at programmes to cut to rein in debt
With national debt currently at R2,5 trillion, it's a long-term project that starts with finding at least R40 billion next year.
CAPE TOWN - Finance Minister Malusi Gigaba says the government is looking at which big programmes it can cut in a bid to rein in the national debt.
Gigaba says hard decisions have to be taken if the national debt is not to reach more than 60% of GDP by 2022.
With national debt currently at R2,5 trillion, it's a long-term project that starts with finding at least R40 billion next year.
Gigaba was briefing Parliament's Standing Committees on Finance and Appropriations on Thursday afternoon.
The finance minister says the president’s fiscal committee, a team of ministers tasked with stabilising the national debt, is already looking at large government programmes with a view to scrapping them.
“You need to cut big programmes. So, the fiscal committee is considering those proposals as we speak.”
Gigaba did not identify which programmes might be chopped but says drastic action is needed now to prevent the national debt from topping 60% of GDP in 2022.
“It sounds easy to just say cut spending and generate new revenue to find R40 billion, 0.8 of GDP, but it’s something else when you must now crunch the figures and determine which programme must be cut out in order to find this money.”
Hiking taxes and other cuts to government spending aren’t off the table but the worry is that this might further strangle the economy
Gigaba says the fiscal committee’s proposals will be put before Cabinet with details likely to be announced in the main budget in February.
