News24 reports that much-needed budget cuts look set to be dead in the water as Cabinet is refusing to budge on proposals to rein in spending, especially on police programmes and the massive public sector wage bill.
With the 2024 general election less than a year away, the public sector wage bill cannot be tampered with because the ANC could lose support from its alliance partner Cosatu, with whom thousands of public servants are affiliated. More police officers will also be needed to respond to election-related, violence while increasing taxes, including a reported 2% VAT increase, will hit consumers hard. A reliable source indicated: "There has been big resistance to the plans of Treasury from the whole of Cabinet. Many of the cutbacks will hurt departments especially the police. All resources are needed to capacitate the police as crime levels are high. There are also the elections next year which always requires more money." While the National Treasury is scratching its head to find money to fill the budget shortfall, the government is forking out around R37 billion in 2023/24 budget to fund public servant salary increases. Minister in the Presidency Khumbudzo Ntshavheni last week said Cabinet wasn't looking at cutting any government programmes. "We do not want to create the impression that there is a crisis in South Africa and that the country is going to collapse. South Africa is not going to collapse," she said. Economist Dawie Roodt said South Africans needed to understand that the country was headed for a cash crunch.
- Read the full original of the report in the above regard by Jason Felix at News24 (subscriber access only)
- Read too, Cabinet rejects treasury’s cuts, at Mail & Guardian (subscriber access only)
Get other news reports at the SA Labour News home page