National Treasury: SA can’t afford to spend more
National Treasury said that it could not spend more money as the country faced a debt crisis.
CAPE TOWN – National Treasury said that it could not spend more money as the country faced a debt crisis.
Officials on Friday responded to submissions by labour, civil society and economists on Finance Minister Tito Mboweni’s supplementary budget.
Most submissions on day one of the hearings rejected the budget.
A group of economists called the Economists Initiative this week called on Members of Parliament (MPs) to reject the supplementary budget.
They called for greater rather than less government expenditure in the face of deepening poverty exacerbated by the COVID-19 pandemic.
But Treasury official Edgar Sishi gave MPs a reminder of the country’s looming debt crisis.
“Additional spending will require higher debt, and this comes with high interest. Rising debt service costs are crowding out our ability to pay for health and education services. Next year, payment on interest will be higher than spending on health and the year after that, payment on interest will be higher than total spending on basic education.”
He said that failure to arrest the debt trajectory would see debt-service costs consume around 31% of the main budget revenue by 2024.
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