SA heading for the fiscal cliff
While the recent countrywide #feesmustfall movement was rooted in fundamental social issues, the consequences of the 0% increase announced by government will be dire.
In a recent joint sitting of the Select and Standing Committees of Finance in parliament, Professor Jannie Rossouw (pictured), head of the School of Economic and Business Sciences at Wits University, told attendees just how dire the aforementioned consequences may be. He opines that if expenditure trends continue unconstrained, there is little that will save SA from taking a nasty fall off the fiscal precipice.
- In September, CFO South Africa held an interesting workshop on Planning, Budgeting and Forecasting in the 21st Century. Perhaps we should invite certain government ministers to the next one.
Roussouw, together with researchers Adèle Breytenbach and Fanie Joubert, approximate that free tertiary education for all will add a further R33 billion per year to government expenditure. According to the trio, even if government implements two new personal income tax brackets this will only bring in an additional R6,82 billion per year in tax revenue. That won't go very far now will it.