MTBPS: Godongwana must cut the GNU down to size, says FMF

29 October 2024

“The ‘Government of National Unity’ was received and born in sin,” says Martin van Staden, Head of Policy at the Free Market Foundation (FMF). “Instead of cutting wasteful spending, President Ramaphosa grossly expanded the size of his cabinet. Minister Enoch Godongwana must assist the President to bring about necessary fiscal prudence.” 

These were among the sentiments shared during a Tuesday morning press briefing hosted by the FMF in anticipation of the Minister of Finance’s medium-term budget policy statement (MTBPS) on Wednesday. 

During the briefing, the FMF renewed its call for fiscal responsibility, tax reform, and privatisation of state assets and functions. 

“If government wants to restore the confidence of taxpayers, it needs to act swiftly to rein in out-of-control spending – particularly on public sector wages – provide some tax relief, and rid the government balance sheet of uneconomic, costly state-owned enterprises,” continues Van Staden.

At the briefing, the FMF launched its report, “Liberty First: Size of Government,” setting out the practical steps that Godongwana and his Cabinet colleagues can take to ensure scarce taxpayer resources are spent more wisely. 

Van Staden, who is the author of the report, says that the profligacy of government is not only unwise, but unconstitutional. 

“Section 195(1)(b) of the Constitution requires that government use resources ‘efficiently, economically, and effectively’,” says Van Staden. “This is not a suggestion, but a requirement that has been ignored for decades. The GNU therefore does not merely have a moral and economic, but also a constitutional, obligation to change course.” 

The report forms part of a series of five policy papers published by the FMF from the end of October through to the beginning of November that outline a practical reform agenda for the GNU.  

“We believe that there is scope for real reform after the 2024 general election, but it is incumbent on government to turn goodwill into action. The medium-term budget policy statement and the February 2025 budget are two of the last ‘easy’ opportunities the GNU will have to announce a reform agenda, before the expectation that the next five years will just be ‘more of the same’ is solidified,” concludes Van Staden. 

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.

Issued by Martin van Staden, Head of Policy, Free Market Foundation, 29 October 2024