National Treasury under pressure to kick-start spending review, starting with cuts to government perks for executive
After two failed budgets, the treasury will now have a third bite at it with a full reset expected on May 21.
Minister of Finance Enoch Godongwana and the finance department briefed the joint meeting with the Standing Committee on Appropriations, Select Committee on Finance and Standing Committee on Finance, Select Committee on Appropriations on the 2025 Budget Speech Picture: Phando Jikelo/Parliament
JOHANNESBURG - National Treasury is again under pressure to kick-start a spending review, starting with cuts to government perks for the executive.
To break the deadlock after budget 2.0, the Democratic Alliance (DA) is among the parties that have called on government to bring down expenditure to cut out waste and free up fiscal space for other priorities.
After two failed budgets, the treasury will now have a third bite at it with a full reset expected on May 21.
This includes a fresh fiscal framework, appropriation bill and division of revenue bill.
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The North West University economics professor, Waldo Krugell, says corporate income tax and personal income tax are unlikely to be the first port of call to raise taxes in budget 3.0.
“That’s even more complicated than increasing VAT and there’s a lot of research that needs to go into that. The company tax rate and the personal income tax rate are already high in international terms. I think the options he has there would be really limited.”
Krugell says, outside of the more technical options, there are low-hanging fruit to help bring down runaway spending.
“There’s an easy way and a hard way. The easy way is to review the top line items and make symbolic cuts and take money away from the blue light brigade, things like that. The hard way is to ask ourselves what we want to achieve as a society, and what’s going to contribute to that.”