State spending to exceed income
FINANCE Minister Pravin Gordhan said that government spending will exceed its income this year.
Gordhan told Parliament that the government will have to borrow to support its spending target for the current year as tax revenues plunge.
But he said it will have to constrain spending growth to repay the debt once the recovery begins.
He said South Africa needed to maintain its spending plans to bolster the economy through the height of the global recession.
"We have the fiscal space to maintain our spending by borrowing more."
Gordhan told MPs that revenue collections were already R19billion short of target, adding that the shortfall could hit R60billion by the end of the fiscal year.
The February budget forecast a R95billion revenue shortfall this fiscal year and a deficit equal to 3,9percent of GDP.