IEJ statement: claims that South Africa is heading towards a fiscal crisis are exaggerated

The Institute for Economic Justice (IEJ) argues that claims of an immediate fiscal crisis in South Africa are exaggerated by the National Treasury to justify unpopular budget cuts. The IEJ suggests that current revenue shortfalls and expenditure overspends are within historical norms and can be managed through alternative fiscal strategies, such as utilizing central bank reserves and increasing taxes on high-income earners, rather than through austerity measures that could contract the economy.

• The IEJ estimates a revenue shortfall of R67.2 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.
• A projected expenditure overspend of R67.9 billion for 2023/24 is largely driven by a R37.5 billion unbudgeted increase in the public sector wage bill.
• South Africa's debt-to-GDP ratio of 71.4% in 2022/23 is comparable to the 69% average for middle-income and emerging market countries, suggesting the debt level is not at a crisis proportion, though high interest rates and a lack of growth strategy remain concerns.
• The IEJ proposes several alternatives to budget cuts to resolve the fiscal mismatch, including using funds from the Reserve Bank’s Gold and Foreign Exchange Contingency Reserve Account (which holds R459 billion), increasing short-term borrowing, and removing tax breaks for high-income earners and corporates.
• Removing tax breaks for individuals earning above R750,000, who represent approximately 2.9% of the working population, is estimated to raise R83 billion.

APA

Isaacs, G., & Mncube, Z. (2023). IEJ statement: claims that South Africa is heading towards a fiscal crisis are exaggerated. Institute for Economic Justice. https://iej.org.za/press-room/statements/iej-statement-claims-that-south-africa-is-heading-towards-a-fiscal-crisis-are-exaggerated/

Chicago

Isaacs, Gilad, and Zimbali Mncube. IEJ statement: claims that South Africa is heading towards a fiscal crisis are exaggerated. Institute for Economic Justice, 2023. https://iej.org.za/press-room/statements/iej-statement-claims-that-south-africa-is-heading-towards-a-fiscal-crisis-are-exaggerated/.

Wikipedia

{{cite press release |last1=Isaacs |first1=Gilad |last2=Mncube |first2=Zimbali |title=IEJ statement: claims that South Africa is heading towards a fiscal crisis are exaggerated |publisher=Institute for Economic Justice |date=2 October 2023 |url=https://iej.org.za/press-room/statements/iej-statement-claims-that-south-africa-is-heading-towards-a-fiscal-crisis-are-exaggerated/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{isaacs2023iej, author = {Isaacs, Gilad and Mncube, Zimbali}, title = {{IEJ statement: claims that South Africa is heading towards a fiscal crisis are exaggerated}}, publisher = {Institute for Economic Justice}, year = {2023}, month = oct, url = {https://iej.org.za/press-room/statements/iej-statement-claims-that-south-africa-is-heading-towards-a-fiscal-crisis-are-exaggerated/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }