Road to ‘bankruptcy’: Tito delivers a brutal budget warning
Minister lays out the ugly truth about SA’s debt crisis, saying we must cut spending or face disaster in 3 years
If anyone had expected that finance minister Tito Mboweni might try to gild the fiscal lily a little when he presented his emergency budget on Wednesday, that was not what happened – at least not when it came to the numbers for the current, Covid-hit year.
And he sounded a blunt and brutal warning of the perils of the debt crisis SA would probably face within the next three years – unless the government makes deep cuts to its spending. If the government did not address this, it was on a path to bankruptcy, Mboweni warned, one that could eventually see the gains of the democratic era lost.
And the nub of Wednesday’s budget is that he has gained cabinet approval, he said, for an “active scenario” in which instead of allowing the debt to balloon to sovereign debt crisis levels, the government will stabilise its debt level – by slashing R250bn from its spending over the next two years and implementing fresh tax hikes two years hence, once the economy starts to recover...