Over 100 experts and organisations call on the President and Minister of Finance to halt all planned budget cuts

The document argues that planned budget cuts in South Africa are misguided and dangerous, potentially slowing economic growth and undermining social protections. The signatories contend that the current 'fiscal crisis' is exaggerated, noting that the projected R53 billion revenue shortfall is comparable to previous years. They propose alternative solutions to close budget mismatches, such as drawing on the SARB’s Gold and Foreign Exchange Contingency Reserve Account, reducing tax breaks for high earners, and implementing a wealth tax.

• The projected revenue shortfall of R53 billion is not abnormally large and is similar in magnitude to shortfalls seen in 2017/18 (R61 billion), 2018/19 (R58 billion), and 2019/20 (R70 billion).
• Expenditure overruns are largely attributed to National Treasury's failure to budget for predictable costs, specifically a R37.5 billion increase in the public sector wage bill.
• While South Africa's debt-to-GDP ratio of 71.4% in 2022/23 is close to the emerging market and middle-income average of 69%, its interest payments are significantly higher at 5% of GDP compared to the 2% average for upper-middle income countries.
• Fiscal contraction exceeding 1.5% of GDP can lead to a negative effect of more than 3% on GDP even after 15 years, and contractions larger than 3% can result in a 5.5% drop in GDP.
• The signatories propose closing the budget mismatch by utilizing the R459 billion in the SARB’s Gold and Foreign Exchange Contingency Reserve Account and increasing short-term borrowing.
• Potential revenue increases could be achieved by reducing tax breaks for those earning above R750,000 per year, which could raise up to R83 billion, and reversing the corporate income tax rate reduction from 28% to 27%, which cost R11-R13 billion annually.

APA

Institute for Economic Justice (2023). Over 100 experts and organisations call on the President and Minister of Finance to halt all planned budget cuts. https://iej.org.za/wp-content/uploads/2023/10/Open-letter-against-cuts-October-2023.pdf

Chicago

Institute for Economic Justice. Over 100 experts and organisations call on the President and Minister of Finance to halt all planned budget cuts. 2023. https://iej.org.za/wp-content/uploads/2023/10/Open-letter-against-cuts-October-2023.pdf.

Wikipedia

{{cite press release |author=Institute for Economic Justice |title=Over 100 experts and organisations call on the President and Minister of Finance to halt all planned budget cuts |date=17 October 2023 |url=https://iej.org.za/wp-content/uploads/2023/10/Open-letter-against-cuts-October-2023.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{instituteforeconomicjustice2023over, author = {{Institute for Economic Justice}}, title = {{Over 100 experts and organisations call on the President and Minister of Finance to halt all planned budget cuts}}, publisher = {Institute for Economic Justice}, year = {2023}, month = oct, url = {https://iej.org.za/wp-content/uploads/2023/10/Open-letter-against-cuts-October-2023.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }