SA govt warned over huge debt burden
The group's head Jannie Rossouw says if the government doesn't get to grips with its wage bill, it may have to approach the IMF for help.
CAPE TOWN – The Fiscal Cliff Study Group is warning that if the South African government does not tackle its debt and the ballooning civil service wage bill, it could be forced to ask the International Monetary Fund (IMF) for a loan.
The group's head Jannie Rossouw says Ireland faced a fiscal cliff during the global financial crisis and government jobs were slashed by 10% and civil servants had to take a 19% cut on average in their salaries.
Rossouw says the government is currently spending 70% of its revenue on servicing its debt, the salaries of government employees and social grants.
“There’s no doubt in my mind that with an IMF loan, the IMF will demand a larger focus on reducing the government wage bill and the cost of the civil service. So, we either do it voluntarily, or we are forced by an outside party – the choice is ours.”
He says if the government doesn't get to grips with its wage bill, it may have to approach the IMF for help.