Open Letter: Over 100 experts and organisations call on the President and Minister of Finance to halt all planned budget cuts

The document argues that planned budget cuts in South Africa are misguided and dangerous, potentially slowing economic growth and undermining social protection. The authors contend that the current 'fiscal crisis' is manageable through alternative measures, such as drawing on reserves, increasing short-term borrowing, and raising revenue from high earners and corporate tax adjustments, rather than indiscriminate spending cuts.

• The authors argue that the current revenue shortfall of R53 billion is not abnormally large and is comparable to shortfalls in previous years, such as R61 billion in 2017/18, R58 billion in 2018/19, and R70 billion in 2019/20.
• Expenditure overruns are attributed to National Treasury's failure to budget for foreseeable costs, specifically citing a R37.5 billion increase in the public sector wage bill.
• While South Africa's debt-to-GDP ratio of 71.4% in 2022/23 is close to the emerging market and middle-income average of 69%, its interest payments are significantly higher at 5% of GDP compared to the 2% average for upper-middle income countries.
• The letter claims that fiscal contractions larger than 1.5% of GDP can cause a negative effect of over 3% on GDP even after 15 years, and that IMF research indicates fiscal consolidations generally do not reduce debt-to-GDP ratios.
• To resolve budget mismatches without cuts, the authors suggest drawing on the R459 billion in the SARB’s Gold and Foreign Exchange Contingency Reserve Account and increasing short-term borrowing.
• The authors propose raising additional revenue by reducing tax breaks for those earning above R750,000 per year, which could raise up to R83 billion, and reversing the corporate income tax rate reduction from 28% to 27%, which cost R11–R13 billion annually.
• The letter recommends against raising VAT, stating it would make the tax mix more regressive and disproportionately burden low-income earners.

APA

Isaacs, G., Zondo, N., Pillay, P., Hall, R., Lehohla, P., Baloyi, B., Moore, E., Kasrils, R., Edigheji, O., van den Heever, A., Pillay, D., Govender, P., Ramani, E., Miller, R., Jacobs, P., Makgetla, N., Botes, T., Mullagee, F., Paine, T., ... Hadebe, S. (2023). Open Letter: Over 100 experts and organisations call on the President and Minister of Finance to halt all planned budget cuts. Institute for Economic Justice. https://iej.org.za/resource/open-letter/open-letter-over-100-experts-and-organisations-call-on-the-president-and-minister-of-finance-to-halt-all-planned-budget-cuts/

Chicago

Isaacs, Gilad, Nomzamo Zondo, Pundy Pillay, Ruth Hall, Pali Lehohla, Basani Baloyi, Elena Moore, et al. Open Letter: Over 100 experts and organisations call on the President and Minister of Finance to halt all planned budget cuts. Institute for Economic Justice, 2023. https://iej.org.za/resource/open-letter/open-letter-over-100-experts-and-organisations-call-on-the-president-and-minister-of-finance-to-halt-all-planned-budget-cuts/.

Wikipedia

{{cite press release |last1=Isaacs |first1=Gilad |last2=Zondo |first2=Nomzamo |last3=Pillay |first3=Pundy |last4=Hall |first4=Ruth |last5=Lehohla |first5=Pali |last6=Baloyi |first6=Basani |last7=Moore |first7=Elena |last8=Kasrils |first8=Ronnie |last9=Edigheji |first9=Omano |display-authors=etal |title=Open Letter: Over 100 experts and organisations call on the President and Minister of Finance to halt all planned budget cuts |publisher=Institute for Economic Justice |date=17 October 2023 |url=https://iej.org.za/resource/open-letter/open-letter-over-100-experts-and-organisations-call-on-the-president-and-minister-of-finance-to-halt-all-planned-budget-cuts/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{isaacs2023open, author = {Isaacs, Gilad and Zondo, Nomzamo and Pillay, Pundy and Hall, Ruth and Lehohla, Pali and Baloyi, Basani and Moore, Elena and Kasrils, Ronnie and Edigheji, Omano and van den Heever, Alex and Pillay, Devan and Govender, Pregs and Ramani, Esther and Miller, Ron and Jacobs, Peter and Makgetla, Neva and Botes, Telana and Mullagee, Fairuz and Paine, Tabitha and Bradbury, Jill and Mhlana, Siviwe and Williams, Michelle and Ndlela, Fundiswa and Ledwaba, Justice and Maharajh, Rasigan and Mngomezulu, Faith and Maseko, Nokwanda and Hassen, Ebrahim-Khalil and Lester, Claire-Anne Louise and Forslund, Dick and Bhengu, Sithembiso and Mazibuko, Kanyiso and Nanto, Casper and Mbhele, Silindile and Shaku, Trevor and Mncube, Zimbali and Paulus, Elroy and Monaco, Lorenza and Fredman, Sandra and Hadebe, Siyabonga}, title = {{Open Letter: Over 100 experts and organisations call on the President and Minister of Finance to halt all planned budget cuts}}, publisher = {Institute for Economic Justice}, year = {2023}, month = oct, url = {https://iej.org.za/resource/open-letter/open-letter-over-100-experts-and-organisations-call-on-the-president-and-minister-of-finance-to-halt-all-planned-budget-cuts/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }