We need to take cognisance of the figures given in the 2014 Budget Review tabled in parliament by Pravin Gordhan. The following table tells a frightening story.
DEBT SERVICE COST
NEED TO BORROW
GR DEBT AS % of GDP
The increases are shown in nominal terms and are not adjusted for inflation. Even so, the gross loan debt threatens to destabilise fiscal (government) finances.
Because R115 billion from total revenue of R963 billion has to be set aside to service the debt, fiscal space in our country has narrowed considerably. Government is running out of money to undertake adequate service delivery and support infrastructure development. This year the government will be forced to borrow R180 billion to meet its budgetary commitments.
COPE is urging that the following be done without delay –
reduce bloatedness in departments;
send ministerial handbook to National Assembly for revising privileges;
stick to the explicit nominal expenditure ceiling so that the debt does not go out of control;
give the Auditor General powers to lay charges against those who authorise expenditure on futile and fruitless expenditure;
ensure that 95% of all expenditure complies strictly with the Public Finance Management Act and the Municipal Finance Management Act;
apply further austerity measures on the consumption side of expenditure;
implement a South African Debt Clock like the USA Debt Clock so that everyone can keep an eye on the rising debt;
compel all tenders to be open in public and audited for specifications, price, value and need; and
compel greater accountability and transparency on the part of all who occupy executive positions in all three spheres of government.
I trust that you will agree with me that we must focus on the national debt because if the government should default on the bunched up payments that will be due in a short while, all of us will suffer the dire consequences.