MTBPS 2021: The Institute for Economic Justice fears the MTBPS will further retard economic recovery

The Institute for Economic Justice (IEJ) expresses grave concern over South Africa's fiscal trajectory ahead of the 2021 Medium Term Budget Policy Statement (MTBPS), arguing that National Treasury's focus on 'fiscal consolidation' and austerity will hinder economic recovery and harm vulnerable populations.

• The IEJ argues that National Treasury's 'fiscal consolidation' strategy is effectively a form of austerity that is economically flawed and procyclical, potentially worsening the economic downturn during a recession.
• The document asserts that South Africa has more fiscal space than National Treasury suggests, citing a projected tax overrun of approximately R150 billion due to a commodities boom and R65 billion in emergency funding from the IMF's Special Drawing Rights (SDR) effective August 2021.
• The IEJ advocates for the implementation of a Universal Basic Income Grant (UBIG) to address poverty and exclusion for 18-59 year olds, while rejecting National Treasury's 'family grant' proposal for failing to account for gendered intra-household power relations.
• The IEJ claims that budget cuts are undermining job creation and human capital, specifically noting that in Kwa-Zulu Natal, 4,000 teachers are slated for retrenchment despite 2,000 existing vacancies.
• The document highlights a decline in funding for industrial policy, noting that industrialisation and export support received around R36 billion in 2021, which represents less than 5% of the budget.
• To create fiscal space and promote equity, the IEJ proposes several new taxes: a Social Security Tax (SST) potentially raising R67.29 billion in 2022/23, a Resource Rent Tax (RRT) potentially raising R38.80 billion, and a wealth tax (e.g., a 1% tax on the top 1% of earners could raise R63 billion).
• The IEJ warns that prioritizing debt reduction since 2014/15 has led to real expenditure contractions; they note that as of February 2021, consolidated non-interest spending was expected to contract at an annual real average rate of 5.2 per cent.

APA

Sibeko, B., & Mncube, Z. (2021). MTBPS 2021: The Institute for Economic Justice fears the MTBPS will further retard economic recovery. Institute for Economic Justice. https://iej.org.za/press-room/statements/mtbps-2021-the-institute-for-economic-justice-fears-the-mtbps-will-further-retard-economic-recovery/

Chicago

Sibeko, Busi, and Zimbali Mncube. MTBPS 2021: The Institute for Economic Justice fears the MTBPS will further retard economic recovery. Institute for Economic Justice, 2021. https://iej.org.za/press-room/statements/mtbps-2021-the-institute-for-economic-justice-fears-the-mtbps-will-further-retard-economic-recovery/.

Wikipedia

{{cite press release |last1=Sibeko |first1=Busi |last2=Mncube |first2=Zimbali |title=MTBPS 2021: The Institute for Economic Justice fears the MTBPS will further retard economic recovery |publisher=Institute for Economic Justice |date=9 November 2021 |url=https://iej.org.za/press-room/statements/mtbps-2021-the-institute-for-economic-justice-fears-the-mtbps-will-further-retard-economic-recovery/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{sibeko2021mtbps, author = {Sibeko, Busi and Mncube, Zimbali}, title = {{MTBPS 2021: The Institute for Economic Justice fears the MTBPS will further retard economic recovery}}, publisher = {Institute for Economic Justice}, year = {2021}, month = nov, url = {https://iej.org.za/press-room/statements/mtbps-2021-the-institute-for-economic-justice-fears-the-mtbps-will-further-retard-economic-recovery/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }