FMF bemoans balanced but bloated budget

30 October 2024

The Free Market Foundation (FMF) notes that while Minister of Finance, Enoch Godongwana, has managed to balance the budget, his government is still far too big to begin with.  

At today’s Medium Term Budget Policy Statement (MTBPS), Minister Godongwana noted that the government will record a primary budget surplus of 1.8%, excluding debt servicing costs. However, South Africa’s national debt burden remains unsustainably high, projected to rise to 75.5% of GDP or R6.05 trillion in 2025/26.  

‘While the minister acknowledged the importance of macroeconomic stability, the fact remains that the government is still too large and South African taxpayers are still footing the bill’, said FMF CEO David Ansara. 

Recent data from the 2024 Economic Freedom of the World (EFW) annual report – published by the Fraser Institute in Canada – revealed that the size of government in South Africa is still too large by international standards. 

In the area of ‘Size of Government’, the EFW measures, amongst other things, state expenditure and investment, tax rates, and state ownership of assets. In 2024’s EFW report, South Africa ranked a woeful 115th out of 165 states on size of government.  

South Africa’s low ranking in the EFW shows that more drastic steps need to be taken to reduce state spending, lower the burden on taxpayers and privatise failing state-owned enterprises. To this end, the FMF this week launched a special paper as part of its Liberty First policy agenda for the current parliamentary term. 

Click here for a soundbite by David Ansara. 

Click here to read the full “Liberty First: Size of Government” paper.  

The FMF is also publishing a special report on privatisation on Thursday, 31 October. Dr Christoph Klein, FMF Associate, will be in conversation with FMF CEO David Ansara during a live webinar. Click here to attend tomorrow’s briefing.

Issued by David Ansara, Chief Executive Officer, Free Market Foundation, 31 October 2024