SA must make tough choices

Finance minister Tito Mboweni warned that general wastage in government departments and state institutions could plunge the country into a debt trap.
Finance minister Tito Mboweni warned that general wastage in government departments and state institutions could plunge the country into a debt trap.
Image: ESA ALEXANDER

Finance minister Tito Mboweni was never going to be able to satisfy everyone with his medium-term budget. Not under the current economic conditions, especially.

The state of our finances as a country calls for some serious policy decisions, some that will definitely leave some key social partners unhappy in the short to medium term.

Mboweni rightly warned in his speech yesterday that the bulging wage bill, burning money on under-performing parastatals as well as general wastage in government departments and state institutions, could plunge the country into a debt trap.

As it is, our national debt would have ballooned to over 70% of GDP by 2023.

The wage bill now accounts for 45% of government expenditure. All of this is not sustainable, and hence the need for tough choices.

We fully agree with the minister's refusal to issue further blank cheques to the likes of Eskom, the SABC and SAA without these state-owned entities showing any signs of improvement.

Insisting that in the future their bail-outs are converted to loans with strict repayment plans is a step in the right direction.

For too long many of these parastatals acted like money grew on trees, hence putting our collective future in grave danger.

While we also agree with the minister on the need to curb the rate in which the state wage bill increases, we would like to caution against this being done recklessly and in a manner that is not sensitive to the conditions under which some of our civil servants operate.

One of Mboweni's suggestions is that the state does away with the occupational specific dispensations (OSDs) that government entered into with nurses, doctors, teachers, police and correctional services employees in a bid to keep this category of civil servants in the public sector.

Without OSDs, scores of skilled professionals who already complain about being overworked and underpaid, could be tempted to leave the public sector for better working conditions elsewhere.

This would hurt the poor the most as there would be a shortage of skills in public hospitals that service those who cannot afford medical aid.

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