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SA could run out of money by 2042, Parliament told

The head of the Fiscal Cliff Study Group, Professor Jannie Rossouw, says South Africa’s position has deteriorated since last year’s Budget.

Picture: EWN

CAPE TOWN - South Africa has edged closer to the so-called fiscal cliff and could run out of money by 2042, Parliament's been told.

The fiscal cliff is the point where civil service salaries, social grant payments and the cost of servicing government’s debt swallow up all state revenue.

Cutting spending on govt depts could save SA around R1bn a year

Parliament’s finance committees on Wednesday held public hearings on the budget.

The head of the Fiscal Cliff Study Group, Professor Jannie Rossouw, says South Africa’s position has deteriorated since last year’s Budget.

“At the rate we are going, this country is going to run out of money by 2042. We cannot continue.”

Rossouw says the gap between revenue and spending on state employees’ wages, social assistance and debt service costs is now bigger than ever before.

“This ratio was 55% in 2007/2008. After this last Budget, it is 71.8%. We are in serious trouble.”

Rossouw says state-owned entities, especially Eskom, pose the biggest risk to the fiscus.

(Edited by Shimoney Regter)

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