This presentation was delivered to the Select and Standing Committees on Finance during the public hearings following the 2019 Budget Speech. Prepared by the Budget Justice Coalition, it reviews five years of South Africa’s budget policy and presents recommendations to address austerity, state capture, and shortcomings in the national budgeting process.
The impact of austerity
The presentation argues that austerity has shaped South Africa’s fiscal policy since 2014/15, redirecting resources away from expanding public services towards deficit reduction and state-owned enterprise bailouts. It contends that spending cuts during periods of weak economic growth have worsened unemployment, inequality, and poverty while reducing the state’s ability to fulfil its constitutional obligations.
Public services and taxation
The document highlights declining real per capita investment in health and education, resulting in staffing shortages, deteriorating infrastructure, and reduced spending per learner. It also critiques changes to the tax system, including increases in VAT and fuel levies, arguing that these measures place a disproportionate burden on lower-income households while opportunities for more progressive taxation remain underutilised.
Governance and budget reform
The presentation links state capture, corruption, and poor governance to rising public costs and weakened public institutions. It calls for stronger parliamentary oversight, greater transparency in procurement, improved public participation in budgeting, and reforms to strengthen accountability across government.
Building a fairer fiscal framework
To move beyond austerity, the document recommends restoring real per capita growth in public spending, adopting more progressive tax measures such as wealth and inheritance taxes, closing tax loopholes, and aligning macroeconomic policy with employment creation and inclusive economic growth. It also advocates stronger coordination across economic departments and enhanced support for open budgeting initiatives.
Conclusion
The presentation concludes that South Africa’s budget should prioritise economic justice, quality public services, and constitutional rights. By ending austerity, strengthening democratic oversight, and adopting more progressive fiscal policies, the government can build a budgeting system that promotes inclusive development and public accountability.