SA has never had macro-level austerity in any real sense in recent years. Expenditure has continued to grow even in real terms in every year bar a small dip in 2016/17. Indeed, expenditure this fiscal year will grow about 11.6%, including the special appropriations bill.

This was the fallacy of the Pravin Gordhan’s years of fiscal “prudence”, which were driven off a non-credible view of long-term potential growth, backed up by analysts blindly accepting the paradigm.

Ratings agencies, such as Fitch Ratings last Friday, will now drive the reality home: growth in per-capita terms is at best around zero (that is, headline growth around 1.7%) in the coming years...