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

The IEJ criticizes the South African National Treasury's 'fiscal consolidation' approach, arguing that budget cuts during a recession are procyclical and retard economic recovery. The document asserts that there is significant fiscal space due to tax overruns and IMF funding, which should be used for a Universal Basic Income Grant (UBIG) and job creation initiatives. It warns that prioritizing debt reduction over public expenditure has led to real declines in spending for education and social grants, which undermines human capital and socio-economic rights.

• The National Treasury's pursuit of 'fiscal consolidation' is characterized as austerity and is viewed as economically flawed because government spending cuts during recessions can worsen economic downturns.
• There is more fiscal space available than the National Treasury suggests, evidenced by a projected tax overrun of approximately R150 billion and R65 billion in emergency funding from the IMF's Special Drawing Rights (SDR) as of August 2021.
• Social grants have seen real decreases; for example, the Child Support Grant's nominal increase to R460 was below the 4.2% expected inflation for 2021/22, resulting in a real decrease of 0.8%.
• The IEJ advocates for a Universal Basic Income Grant (UBIG) to address poverty for the 18-59 age group and rejects the National Treasury's 'family grant' proposal, which it claims ignores gendered intra-household power relations.
• Budget cuts are undermining job creation and human capital, as seen in the Presidential Employment Stimulus (PES) budget reduction from R12.6 billion in Phase 1 to R11 billion in Phase 2, and the planned retrenchment of 4,000 teachers in Kwa-Zulu Natal.
• The IEJ proposes several new revenue sources to create fiscal space, including a Social Security Tax (SST) that could raise R67.29 billion in 2022/23, a Resource Rent Tax (RRT) potentially raising R38.80 billion, and a wealth tax where a 1% tax on the top 1% of earners could raise R63 billion.

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} }