The Democratic Alliance of the Opposition launched its “Alternative budget”, highlighting the major debt problem currently facing the South African tax authorities.
The DA said the country was facing a debt of around R4 trillion, mostly due to excessive government spending and borrowing – even before the Covid-19 pandemic.
“All of this debt has to be repaid in the years to come, and that means every South African, our children and our grandchildren will inherit the burden of repaying this debt,” he said.
“Every child born in South Africa today already owes R67,000 before they even take their first breath. And that number grows as the government continues to borrow more. “
The DA said the more the government borrows, the more interest citizens all have to pay – leaving less money for basic services like education and health.
“This is a double injustice against future generations: more debts to repay and less basic services. It is simply wrong to sacrifice the future of our children. They deserve better.
“The ANC government needs to get its debt under control before taking the whole country with it. It has to stop. “
Finance Minister Tito Mboweni will deliver his budget speech on Wednesday February 24 in which he is expected to present a spending framework for the next three years.
Data published in December shows that the national government’s total gross debt increased 20.3 percent year-on-year to 3.7 trillion rand, or 75.2 percent of GDP as of September 30.
The coronavirus pandemic has exacerbated the deterioration of South African public finances as it weighed on revenue collection, raised the cost of borrowing and pushed the economy into its longest recession in nearly three decades, the agency said. Moody’s rating.
“South Africa’s credit profile is increasingly constrained by strong and widespread fiscal pressures, including rising borrowing costs and continued weak growth.
“Progress in structural economic reforms has been limited due to social and political obstacles.”
He added that a lack of reforms, shocks to primary expenditure or revenue, or sustained increases in the level or volatility of interest rates could lead to further deterioration.
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