SA faces 'serious debt crunch'

SOUTH Africa faces a "serious debt crunch" of about R1,4trillion by 2013 and the taxpayer will have to foot the bill, according to a DA MP.

SOUTH Africa faces a "serious debt crunch" of about R1,4trillion by 2013 and the taxpayer will have to foot the bill, according to a DA MP.

"If our economy does not grow as fast as projected, we will have a very serious debt crunch," Deon George said in Cape Town yesterday.

"It will accumulate over the next couple of years until 2013 where we have over R1,4trillion in debt, which is projected to be 43percent of projected GDP," he said.

George said the main reason behind the rocketing debt was poorly run parastatals, which were "falling over continually".

"We will get to the point where we don't have sufficient money in the economy to pay for these things and, as the (finance) minister says, if things don't go the right way, we will have to push tax up and that is no good for the taxpayer."

He said if just R20billion was brought into the fiscus by attracting private investment into parastatals, the deficit could be reduced by 0,9percent.

The party's chief whip Ian Davidson said until the government had a coherent economic policy, it would be very difficult to resolve the situation.

"You have Pravin Gordhan (finance minister) talking about a relatively liberal policy mix and then you have Rob Davies (trade and industry minister) talking about greater centralisation.

"You can't have both without getting into financial trouble."

Davidson said over the past three years R243billion had been set aside for rescuing state-owned enterprises, but it was still unclear what their role was.

"Is their function to deliver core functions or is it to earn revenue?"

It was also key to appoint "meritorious" managers, he said. - Sapa

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