Small spending cut ‘can cover’ budget shortfall
An economist says government could cover its R75 billion budget shortfall by cutting spending by just 1%.
Azar Jammine made the suggestion ahead of Finance Minister Enoch Godongwana’s return to Parliament on Wednesday to table a revised budget.
It’s the minister's third attempt since February.
After scrapping controversial plans last month to raise VAT, Jammine says Godongwana won't need to look far to fill the revenue hole.
"To make savings of R25 billion a year, is equivalent to making savings on just under 1% of government spending. In other words, if people can cut back on spending by 1% they can manage to plug the shortfall."
Jammine says the focus should be on reducing wasteful expenditure.
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"Things like travel, things like bodyguards and things like the number of cabinet ministers. Those kinds of things are bound to be opportunities."
He says essential services like health and education must be prioritised.
"You won't be able to cut back on medical aid or food consumption or education of your children. You'll easily find a way to cut back on 1% of your spending."
