Budget 2024 from National Treasury continues a troubling trend of budget cuts and reliance on private sector spending. Despite repeated warnings from the IEJ about the detrimental effects of austerity measures on the economy and public services, these policies persist.
Expenditure
Budget cuts, totalling R270 billion between 2019/20 and 2026/27, jeopardise the quality of public services. Per capita spending is decreasing, with significant implications for socio-economic rights. The IEJ recommends halting all budget cuts and conducting a thorough assessment of their impact.
Social Grants
Social grants are failing to keep pace with inflation, leaving beneficiaries struggling to afford basic necessities. The IEJ advocates for above-inflation increases to all grants, particularly to ensure access to nutritional meals for children.
Public Employment
Despite some successes, public employment programmes receive inadequate funding. The IEJ calls for expanded funding and longer-term work opportunities for recipients.
Critical Social Services
Spending on critical services like healthcare and education is declining, disproportionately affecting women and perpetuating gender inequality. The IEJ urges a review of budget cuts and increased investment based on identified needs.
Job Creation, Climate Change, and Economic Development
The budget’s focus on private sector investment undermines efforts to reduce unemployment and combat climate change. The IEJ recommends a long-term needs assessment and increased public investment in infrastructure.
Revenue
The budget falls short in raising necessary revenue, with missed opportunities to tax high-income earners and address illicit financial flows. The IEJ proposes concrete measures to raise funds, including restoring corporate income tax rates and reducing tax breaks for higher earners.
Debt and Fiscal Policy
The pursuit of a primary budget surplus through austerity measures is misguided and ignores the needs of vulnerable populations. The IEJ suggests prioritising growth and employment generation, reducing the cost of borrowing, and using debt for productive purposes.
Private Sector to the Rescue?
Reliance on private sector investment is flawed and fails to address developmental challenges. The IEJ advocates for increased public investment and leveraging publicly-owned development finance institutions.
Recommendations
In conclusion, the IEJ calls for a shift in fiscal policy towards development and human rights realisation. This includes reversing austerity, increasing social spending, and promoting equitable tax structures.