Revised Fiscal Framework and Revenue Proposals

The Institute for Economic Justice (IEJ) submitted a report to the South African Standing and Select Committees on Finance criticizing the Medium-Term Budget Policy Statement (MTBPS) for continuing a path of austerity. The IEJ argues that the government should shift from a narrow focus on debt stabilization to a development-focused budget that prioritizes growth, employment, and poverty reduction. The report proposes specific revenue-raising measures, such as wealth taxes and utilizing the GFECRA surplus, and calls for the restructuring of Eskom's debt to facilitate a just energy transition.

• The IEJ argues that South Africa's primary debt challenge is the cost of debt rather than the total debt level. While the public debt share of GDP was 71.4% at the end of 2022/23—comparable to the 69% average for peer countries—the yearly debt service costs are relatively high.
• The report claims that current austerity measures are causing real spending cuts in essential social services. Over the next three years, real spending on basic education and healthcare is projected to decrease by R16 billion and R14 billion, respectively, leading to a decline in real spending per learner and per healthcare recipient by 2026/27.
• The IEJ identifies significant cuts to key economic expenditure over the medium term, including a 20% cut to innovation, science, and technology, a 13% cut to industrialisation and trade, an 11% cut to agriculture and rural development, and a 1% cut to job creation.
• The Social Relief of Distress (SRD) grant budget has been reduced from R44 billion in 2022/23 to R33 billion in the MTBPS. The IEJ asserts these caps are arbitrary and have led to an exclusionary application process and a low income threshold of R350, resulting in 27 million fewer payments between April and June compared to the period before new regulations.
• To maximize available resources without increasing VAT, the IEJ proposes several revenue measures: eliminating tax breaks for individuals earning over R750,000 per year (potentially raising over R80 billion), instituting a net wealth tax (generating R70 to R160 billion), expanding the financial transaction tax to include equities (raising R41 billion), and drawing down on the R459 billion surplus in the Gold and Foreign Exchange Contingency Reserve Account (GFECRA).
• The IEJ criticizes the government's reliance on private finance for infrastructure and growth, arguing it risks increasing costs and reducing access to public services. Regarding Eskom, the IEJ recommends swapping 75% of its legacy debt into a state-owned financial entity managed by National Treasury and renegotiating haircuts with creditors.

APA

Institute for Economic Justice (2023). Revised Fiscal Framework and Revenue Proposals. https://iej.org.za/wp-content/uploads/2023/11/Final-Revised-Fiscal-Framework-and-Revenue-Proposals-Submission.docx.pdf

Chicago

Institute for Economic Justice. Revised Fiscal Framework and Revenue Proposals. 2023. https://iej.org.za/wp-content/uploads/2023/11/Final-Revised-Fiscal-Framework-and-Revenue-Proposals-Submission.docx.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=Revised Fiscal Framework and Revenue Proposals |date=6 November 2023 |url=https://iej.org.za/wp-content/uploads/2023/11/Final-Revised-Fiscal-Framework-and-Revenue-Proposals-Submission.docx.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2023revised, author = {{Institute for Economic Justice}}, title = {{Revised Fiscal Framework and Revenue Proposals}}, institution = {Institute for Economic Justice}, year = {2023}, month = nov, url = {https://iej.org.za/wp-content/uploads/2023/11/Final-Revised-Fiscal-Framework-and-Revenue-Proposals-Submission.docx.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }