Deeper spending cuts needed to get SA back on track

16 November 2015 - 02:13 By The Times Editorial

Finance Minister Nhlanhla Nene made it clear during his mini-budget speech last month that expenditure on infrastructure would not be cut. This is despite the fact that this country will have about R100-billion less to spend in the next three years because of the large, unbudgeted, increase in the public-sector wage bill and falling tax revenue caused by tepid economic growth.Moreover, the government is pressing ahead with its large-scale acquisition of nuclear power stations, which experts say could cost upward of R1-trillion. To this end, R200-million has been set aside for the preparatory phase of the procurement.Though the wisdom of the Zuma administration's potentially ruinous atomic programme is questionable, Nene is correct to ensure that spending on general infrastructure is not reduced. It is one of the few levers the state has to help kick-start the economy, stimulate growth and create jobs. Much of our infrastructure is in need of renewal, as is amply demonstrated by the water crisis.The Treasury has kept its word by cutting official expenditure on frivolities such as overseas travel, conferences and liquor, and caps have been put on car allowances.In addition, the higher wage bill means that the number of people who will in future be employed in the public service will be limited.But the demands on the fiscus are rising sharply. The increasingly militant campaign for free tertiary education for the poor could cost upwards of R40-billion a year and it would be naive to discount additional socioeconomic protests in the run-up to the local elections.A systematic crackdown on corruption could yield billions, but even that would not be enough.Far deeper spending cuts will be required, starting with Zuma's bloated cabinet.A good start - already flagged by the Treasury - would be to reduce the estimated R3.2-billion spent each year on our diplomatic missions abroad, many of which do not deliver sufficient bang for our bucks...

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