21 February 2022
# South Africa needs to cut back on state spending because we are spending far more than we can afford. This is according to economist Dawie Roodt ahead of the minister of Finance, Enoch Godongwana’s inaugural National Budget Speech on Wednesday. He says the minister should and will probably focus on how to reduce state spending. Roodt says the current expenditure is not sustainable:
Play sound: Eng-RoodtSocialExpend
He says South Africa must urgently reduce its debt levels as we are spending too much on the interest of state debt:
Play sound: Eng-RoodtDebt
He also expects the minister will refer to the extension of the Covid grant:
Play sound: Eng-RoodtCovidGrant
The state’s most important revenue source is personal income tax. However, Roodt says significant tax increases are not possible because the economy is overtaxed already:
Play sound: Eng-RoodtTaxes
He says spending less money and increasing taxes are the two main options available to the state, but there is a third way to reduce the fiscal deficit:
Play sound: Eng-RoodtEconGrowth