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

An open letter from over 100 South African experts and organisations urging the President and Minister of Finance to halt planned budget cuts, arguing that such measures are based on a mischaracterised 'fiscal crisis' and would hinder economic growth and social rights.

• The authors oppose National Treasury's instructions for severe budget cuts, arguing that the 'fiscal crisis' cited by officials is a mischaracterisation and that the Treasury failed to acknowledge its own role in creating the budget mismatch.
• The projected revenue shortfall of R53 billion is described as not abnormally large, as it is similar to shortfalls in 2017/18 (R61 billion), 2018/19 (R58 billion), and 2019/20 (R70 billion), and is significantly lower than windfalls of R241 billion and R123 billion in the previous two years.
• Expenditure overruns are attributed primarily to National Treasury's failure to budget for foreseeable costs, specifically 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 in 2022.
• The letter warns that fiscal contractions larger than 1.5% of GDP can cause a negative effect of over 3% on GDP even after 15 years, with the drop reaching 5.5% for contractions larger than 3%.
• The authors propose several alternatives to budget cuts to resolve the mismatch, including drawing on the R459 billion in the SARB’s Gold and Foreign Exchange Contingency Reserve Account and increasing shorter-term borrowing.
• To raise additional revenue in the next budget cycle, the authors suggest reducing tax breaks for those earning above R750,000 per year (potentially raising R83 billion), reversing the corporate income tax rate reduction from 28% to 27% (which cost R11–R13 billion annually), and implementing a wealth tax in the medium term.

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} }