With the weak economy and a dwindling tax base, the FFC said there was little option but to reprioritise spending and achieve fiscal consolidation through restructuring and better governance.
CAPE TOWN - The Financial and Fiscal Commission (FFC) said the government must follow through on restructuring and governance reforms if South Africa was to return to a sustainable fiscal path. The FFC called for bold, decisive and immediate action on Tuesday.
The commission, which advises state bodies on economic, fiscal and financial matters, was briefing Parliament’s finance and appropriations committees on the Mid-Term Budget Policy Statement (MTBPS) delivered by Finance Minister Tito Mboweni last week.
The FFC said the MTBPS was one of the toughest to craft, given the dire economic situation and that it tried to strike a balance between reviving the economy and protecting social spending on education, health, welfare and service-delivery, making trade-offs are inevitable. The commission’s Chen Tseng said government must ensure its initiatives to turn things around are implemented.
“The FFC believes that government must take bold, decisive and immediate actions to deepen its fiscal consolidation and reprioritisation commitments through restructuring and governance reforms to return South Africa to a sustainable fiscal path.” With the weak economy and a dwindling tax base, the FFC said there was little option but to reprioritise spending and achieve fiscal consolidation through restructuring and better governance.
It said this was the only viable course of action to restore fiscal credibility for a sustainable future for the country.