Members of Parliament for the Democratic Alliance announced plans to table the Fiscal Responsibility Bill at the legislature on Monday morning, which they said contained measures to contain fiscal debt.
Finance Minister Tito Mboweni is expected to table his 2020 Budget Speech in a joint sitting in Parliament this week on Wednesday.
DA MPs Geordin Hill-Lewis and Leon Schreiber told reporters in Parliament that their Fiscal Responsibility Bill sought to address National Treasury’s various fiscal risks.
The Fiscal Responsibility Bill provides for a rule stipulating that from the financial year 2020/21 to the financial year 2023/24, net loan debt as a percentage of GDP may not exceed the net loan debt of the previous year.
Hill-Lewis said the notice of intention to table the private members bill was gazetted last week as the party believed the situation had worsened since National Treasury projected debt to rise to 67% of GDP in three years, or R4.2 trillion by 2022-23.
"Unrestrained explosion in debt is one of the four pressures that characterises our fiscal crisis. The other is the fact that our economy is simply not growing. We expect that the Budget would project that the economy will not grow beyond 1%," said Hill-Lewis.
He said under the proposed bill, the minister of finance would table a Fiscal Responsibility report and exemptions from the fiscal rule were subject to a recommendation from the Standing Committee on Finance.
"Democratic pressures are not unique to South Africa. They are developing around the world. This is not an abstract rule, but it’s based on the understanding that without an anchor, it is hard for democratic governments to rein in their spending," Hill-Lewis said.
Hill-Lewis told reporters that debt, compounded with public wage spending, declining tax revenues and state-owned corporation bailouts could cost South Africa its last investment grade credit rating with Moody’s and make harder to avoid a solvency shock. The Fiscal Responsibility Bill is expected to be formally tabled this week.