PRE-BUDGET SUBMISSION

The Institute for Economic Justice (IEJ) submitted a pre-budget proposal on September 17, 2021, arguing that the South African National Treasury's strategy of fiscal consolidation (austerity) is economically flawed and violates socio-economic rights. The IEJ advocates for a shift from expenditure cuts to a government-led stimulus plan, progressive tax increases, and the implementation of a Universal Basic Income Guarantee (UBIG) to drive economic growth and reduce inequality.

• The National Treasury's fiscal consolidation strategy is criticized for being economically flawed, with the IEJ stating that cutting government spending during recessions has a larger negative effect on output than previously anticipated. The 2021 Budget's consolidated non-interest spending is projected to contract at an annual real average rate of 5.2 per cent, leading to real reductions in public services such as health, learning, and culture.
• South Africa's public debt is not an anomaly compared to other emerging market and middle-income economies. While the IMF projects South Africa's general government gross debt will reach 89% by 2024, other countries are projected to be higher, such as Brazil at 100%, Egypt at 87%, and India at 86%.
• Austerity measures are identified as having severe long-term costs for human capital. In KwaZulu-Natal, budget cuts of R6.3 billion are expected to prevent the filling of 2,000 teacher vacancies and lead to the retrenchment of 4,000 teachers. Additionally, the Cabinet approved medium-term reductions of up to R25 billion in higher education, affecting university subsidies (R5 billion) and the National Financial Aid Student Scheme (R6.5 billion).
• The IEJ argues that there is more fiscal space than the National Treasury suggests, citing a SARS revenue collection windfall of R99.6 billion over 2020 MTBPS forecasts and R65 billion in emergency funding from the IMF's Special Drawing Rights (SDR) effective August 2021.
• To raise additional revenue, the IEJ proposes progressive tax measures: a social security tax (SST) of 1.5% to 3% of taxable personal income (potentially raising R67.29 billion in 2022/23), a wealth tax of 1% for the top 1% and 3% for the top 0.1% (projected to generate R59 billion), and a Resource Rent Tax (RRT) of 25% (potentially raising R38.80 billion).
• The document asserts that the National Treasury's fiscal strategy may violate the South African Constitution and the International Covenant on Economic, Cultural, and Social Rights (ICECSR), specifically the principles of non-retrogression and the use of maximum available resources. The IEJ calls for gendered human rights impact assessments to be conducted on the budget.
• The IEJ proposes a real stimulus package of 10% of GDP (R492.2 billion), which it claims would create 3.3 million jobs and generate R826.9 billion in income. Other alternatives include the implementation of a Universal Basic Income Guarantee (UBIG) and accepting higher debt levels in the medium term to avoid undermining market confidence.

APA

-1, Sibeko, B., & Mncube, Z. (2021). PRE-BUDGET SUBMISSION. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2021/09/Pre-Budget-Submission.pdf

Chicago

-1, Busi Sibeko, and Zimbali Mncube. PRE-BUDGET SUBMISSION. Institute for Economic Justice, 2021. https://iej.org.za/wp-content/uploads/2021/09/Pre-Budget-Submission.pdf.

Wikipedia

{{cite report |last1=-1 |last2=Sibeko |first2=Busi |last3=Mncube |first3=Zimbali |title=PRE-BUDGET SUBMISSION |publisher=Institute for Economic Justice |date=17 September 2021 |url=https://iej.org.za/wp-content/uploads/2021/09/Pre-Budget-Submission.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{12021prebudget, author = {-1 and Sibeko, Busi and Mncube, Zimbali}, title = {{PRE-BUDGET SUBMISSION}}, institution = {Institute for Economic Justice}, year = {2021}, month = sep, url = {https://iej.org.za/wp-content/uploads/2021/09/Pre-Budget-Submission.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }