2015/16 Submission for the Division of Revenue
"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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