IEJ proposes measures to close budget shortfall

The Institute for Economic Justice (IEJ) published research arguing that South Africa's current revenue shortfalls and expenditure overruns are manageable and do not constitute a 'fiscal cliff'. The IEJ proposes alternatives to budget cuts, including utilizing Reserve Bank reserves, increasing short-term borrowing, and removing tax breaks for high-income earners and corporates.

• The IEJ estimates a revenue shortfall of R52.4 billion for 2023/24, which it describes as being within historical norms, noting that shortfalls between 2017/18 and 2019/20 ranged from R58.2 to R70.1 billion.
• An expenditure overrun between R67.9 and R105.8 billion is projected for 2023/24, with R37.5 billion attributed to an unbudgeted public sector wage bill increase. Combined with revenue shortfalls, the projected budget deficit is 6.29%.
• South Africa's debt-to-GDP ratio of 71.4% in 2022/23 is considered in line with the 69% average for middle-income and emerging market countries. The IEJ argues that the primary issues are high interest rates and the lack of a credible growth strategy rather than the debt level itself.
• The IEJ warns that fiscal contractions larger than 1.5% of GDP can cause a negative effect of over 3% on GDP after 15 years, with the drop reaching 5.5% for contractions exceeding 3%.
• To close the budget gap without austerity, the IEJ proposes using funds from the Reserve Bank’s Gold and Foreign Exchange Contingency Reserve Account (which holds R459 billion), increasing short-term borrowing, and raising revenue by restoring the corporate income tax rate to 28% and removing tax breaks for those earning above R750,000, which could raise R83 billion.

APA

Institute for Economic Justice (2023). IEJ proposes measures to close budget shortfall. https://iej.org.za/press-room/statements/statement-iej-proposes-measures-to-close-budget-shortfall/

Chicago

Institute for Economic Justice. IEJ proposes measures to close budget shortfall. 2023. https://iej.org.za/press-room/statements/statement-iej-proposes-measures-to-close-budget-shortfall/.

Wikipedia

{{cite press release |author=Institute for Economic Justice |title=IEJ proposes measures to close budget shortfall |date=12 October 2023 |url=https://iej.org.za/press-room/statements/statement-iej-proposes-measures-to-close-budget-shortfall/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{instituteforeconomicjustice2023iej, author = {{Institute for Economic Justice}}, title = {{IEJ proposes measures to close budget shortfall}}, publisher = {Institute for Economic Justice}, year = {2023}, month = oct, url = {https://iej.org.za/press-room/statements/statement-iej-proposes-measures-to-close-budget-shortfall/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }