SA will run out of money in 2042 – Economist

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Money. (Duncan Alfreds, News24)

If the Treasury continues on its current path, the SA will run out of funds by 2042, members of parliament have heard.

The Standing Committee on Finance held public hearings on the budget on Wednesday. Among them was Professor Jannie Rossouw of the Fiscal Cliff Study Group.

"We can not continue"

"At the price we will have no more money until 2042.

"We can not continue," he told MPs before giving recommendations on how to cut spending.

Rossouw pointed out that spending by ministries was exorbitant – spending on the Ministry of Defense and military veterans was highest at R137.7 million, while the Ministry of Finance spent least on R4.4 million for the ministry.

Rossouw suggested that if all 35 departments reduced expenditures to those of the Ministry of Finance, R1bn could be saved.

After that, the government could try to reduce the size of the Cabinet.

fiscal cliff

Rossouw said SA is closer than ever to the fiscal cliff.

He emphasized that state-owned companies had risks to the Treasury – Eskom was the biggest headache.

He suggested reducing Eskom's costs by completely eliminating bonuses, reducing headcount and displaying the number of utilities on the site on a weekly basis.

He also called for the meetings of the Eskom board to be opened to the public. "After all, it's a government monopoly that serves people, nothing can be secret," he said. The overall transparency of state-owned enterprises should be improved, he said.

Rossouw also suggested that the tax declarations of the President, the Vice President, the Cabinet Ministers and their deputies should also be made publicly available to eradicate corruption.