Budget 2022 Analysis: Are Fiscal Consolidation & Accelerated Economic Recovery, Mutually Exclusive???
One of the biggest headaches for the finance minister has been our fiscal position and debt management. The problem is not so much that we are getting more debt but rather how we spend that debt has been the main problem. Since 2008, we have been increasing our debt to GDP ratio, however the unemployment rate has been on the rise (the graphs below highlight this) and economic growth has stagnated. Suggesting that we were not investing our money in places to create jobs or drive growth. This leaves us in a situation where we are not generating enough revenue to pay off the debt that we are accumulating. The revenue could have come from increased tax revenue form both the corporate income tax rate and the individual income tax as there would be more workers. As the minister stated in the speech this meant that our Debt-servicing costs were very high. Currently we were paying R330 BN annually on debt service costs which are higher than the budget for police, health and basic educat...