Primary surplus no cause for celebration
12 May 2024
New revenue and expenditure figures released by the National Treasury would on face value suggest an accomplishment on the part of Government. It has certainly been labelled as such by those who sing the praise of a political party which has singlehandedly collapsed our economy and rendered it uninvestable.
Following 15 years of devastating deficit spending, Treasury’s recent so-called consolidation efforts have indeed delivered the long promised primary fiscal surplus (national revenue minus expenditure, excluding debt servicing costs).
Of course this has received much praise from the ANC itself, but a closer analysis of the February national budget revealed a catastrophe in the making. The Treasury's expenditure control measures have not targeted the right areas, and crucial sectors that deliver the basic services vulnerable citizens depend on like policing, healthcare, education, and defence remain severely underfunded.
Instead, the enormous top-heavy public wage bill highlights that the ANC government's priorities lies with high-ranking government officials, not with the people of South Africa, and not with the hardworking policemen, teachers, nurses, and the soldiers who serve our country. It is them who disproportionately bear the brunt of an ANC induced cost-of-living crisis as opposed to protected cadres.
Currently, more than 38,000 public officials earn over one million Rand annually. These high-ranking millionaire bureaucrats do not add value to the quality of basic service delivery, and often serve to obstruct progress. Since 2014, the number of employees in this salary range has grown by nearly 300%. This is the obvious area where government must concentrate its fiscal consolidation efforts given that labour costs in this area of the public sector have increased substantially more than labour productivity.
Achieving a primary fiscal surplus does hold significant importance. It reflects disciplined and responsible financial management. It allows for the reduction of national debt, decreasing future interest obligations. It frees up funds for vital public investments, service delivery, or even tax relief. But such a surplus cannot be sought at the expense of South African citizens while ANC connected millionaire managers continue to live large, while basic service delivery steadily erodes.
Last month the DA launched an economic policy that will generate 2 million jobs and unlock the enormous potential of our country. It will enable a DA government to achieve a surplus, not at the expense of vulnerable South Africans, but to their benefit.
On 29 May the ANC is set to lose its majority and South Africans will have to opportunity to cast their vote for the only party capable of rescuing our economy from rescuing our economy from the hopelessly incompetent and corrupt ANC. Voters need to enter the voting booths fully aware that the ANC has prioritised its deployed cadres over them at every turn.
Issued by Dion George, DA Shadow Minister of Finance, 12 May 2024
