“Balancing Fiscal Sustainability with Socio-economic Impact”. The country faces more severe economic and fiscal challenges than most people realise, at a time of deep and widespread uncertainty over the world economy and its financial system that is unparalleled since the Great Depression. But even after the world economy once more finds its footing, South Africans cannot assume that strong economic growth will follow, especially given the poverty and inequality challenges facing the country. The government needs to have steady and dependable revenue growth in order to finance programmes over the long term. An expanding economy is the foundation for rising revenues. If the economy fails to grow quickly enough, South Africa’s revenues will fall short of the sums needed to support existing government programmes as well as the ambitious new programmes to which the NDP aspires. This will put pressure not only on government’s current initiatives to realise socio-economic rights in the medium term (such as National Health Insurance) but also on the more ambitious NDP aspirations of eradicating poverty and increasing income equalities by 2030. Hard trade-offs will have to be made to strike a balance between fiscal sustainability and protecting (and extending) the existing socio-economic gains.
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Exploring Alternative Finance and Policy Options for Effective and Sustainable Delivery of Housing in South Africa
The South African human settlements sector faces many challenges including increasing housing backlogs and a decreasing number of low cost houses delivered by the government. The decline in the number of housing units delivered occurs against a significant increase in the resources allocated and spent. Against the background of the challenges faced by the sector, the Commission undertook to evaluate existing housing policies and financing instruments from an economic and fiscal perspective as well as to develop alternative housing delivery and funding options and scenarios for consideration in improving the efficacy of the housing sector. The analysis sought to: review the long run consequences and implications of the current housing delivery and funding system; evaluate ways to encourage self built initiatives including leveraging household savings, private sector and co-savings schemes; and ascertain clear roles and responsibility for government with respect to each alternative.
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The Provision and Funding of Child Welfare Services
With declining global economic growth, many countries including South Africa are being forced into counter-cyclical fiscal measures to buffer the impact of international macroeconomic shocks on a domestic weakening economy. In light of these macroeconomic pressures, it has become necessary to investigate the impact (if any) of tighter fiscal frameworks on government spending patterns for child welfare services, especially after the introduction of the Children’s Act in 2010. An important corollary is whether any significant spending changes in child welfare services are observable following previous court judgements, relevant Financial and Fiscal Commission (FFC) recommendations and Auditor-General (AG) findings. Specifically, this report critically examined the following key areas of research: The legislative and policy framework for the provision and funding of child welfare services; Provincial budgets for child welfare services; Informational and data gaps to determine the accurate mandate and allocation of child welfare services funds; and Policy alternatives and recommendations.
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2012/13 Annual Report
South Africa is still suffering from the prolonged aftermath of the 2008 global economic crisis. The crisis has been fuelled by the Eurozone crises, a slowdown in emerging markets and the fallout of US quantitative easing. All of this has been compounded by internal domestic shocks and happens at a time when fiscal space has been eroded and fiscal consolidation is likely to be the order of the day at least over the medium term given South Africa’s debt situation. There are increased pressures for higher quality service delivery in education and health at provincial level and for basic services from local government; there are huge variations in poverty and in the fiscal and institutional capacity subnational government; there are compelling equity dimensions for the realisation of socio economic rights; there is a need for the intergovernmental system to create incentives for performance and economic growth to fulfil the aspirations of the National Development Plan (NDP). All of this requires a decisive response from the intergovernmental system. It is in that context that the Commission continued to operate and to make its contribution in the 2012/2013 Financial Year.
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To enhance the developmental impact of public resources through the financial and fiscal system in South Africa.
To provide proactive, expert and independent advice on promoting a sustainable and equitable IGFR system, through the formulation and collation of policy relevant analysis, in order to realise the values of the Constitution.