Cape Town - Finance Minister Tito Mboweni should show a credible path to debt stabilisation and in the longer term to debt reduction, DA MP Geordin Hill-Lewis said on Monday.
Briefing the media on their expectations ahead of the Medium-Term Budget Policy Statement, Hill-Lewis said Mboweni should commit himself to a formal legislated debt ceiling.
“The minister must protect essential public services from deep budget cuts by focusing cuts on the public wage bill and through a root-and-branch reassessment of government spending.
“The minister must hold the line on bailouts to failing state entities and should refuse any further bailout of South African Airways,” he said.
Hill-Lewis charged that there has been little meaningful progress on economic reform, national debt continued to mushroom and SAA was set to receive another R10.5 billion.
“The SAA bailout is why this Budget is ultimately bound to disappoint. It represents the failure of the ANC to make the choice to move away from state ambition to giving power to the people.”
Hill-Lewis also said that there was no-one left in South Africa still trying to make a case for why SAA should be bailed out again and the ANC did not even try to make a case for it.
“This is perfectly symbolic of the choice of ‘state ambition’ over empowering people. It is a morally indefensible choice to make.”
He said spending should be prioritised for protecting essential services or providing greater relief.
“More than R65bn in public money has been given to SAA since 1999, without anything to show for it.
“The latest request for R10.5bn to “restructure” the company will push the assistance given to SAA over the R75bn mark.”
Hill-Lewis’s colleague Dion George said the ANC should abandon its ambition for a state-led economy, which was smothering the entrepreneurial talent of South Africans.
He said that in its pursuit of expanded public spending, the gamble has not paid off. “South Africa now has high debts and nothing to show for it,” George said. Nearly every state-owned enterprise without exception was a failing business with unreliable or collapsing services.
Hill-Lewis said Mboweni and the National Treasury should restore South Africa to a sustainable debt path and re-establish fiscal discipline.
Equally important was protecting essential public services from deep budget cuts.
“If we spend more on interest on debt, we will have less to spend on essential services.
“And if spending is focused on wasteful projects and failing state companies, there will be less for essential services,” he said.
Political Bureau