If debt is not constrained in the long term, debt service costs will crowd out the provision of basic services, the party has warned
It is critical that finance minister Tito Mboweni’s supplementary budget on Wednesday outline a credible debt stabilisation path over the medium-term to reduce the risk premium on government debt, DA finance spokesperson Geordin Hill-Lewis said on Monday.
The comments come in the wake of Mboweni’s warning that SA faces a sovereign debt crisis in the next three to four years if the budget is not changed fundamentally and structural economic reforms introduced. Hill-Lewis believed there was very little the government could do to offer stimulus in the coming months because the state’s fiscal position was so weak. The DA does not propose deep cuts to departmental budgets, though it supports the R160bn cuts over three years in the public sector wage bill.
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