Speech on the 2023 Medium Term Budget Policy Statement
Speech by ACDP MP, Steve Swart

Issued by the ACDP Parliamentary Media Office

Gross Loan debt is expected to peak at staggering R6.133 trillion (77.7% of GDP)

Dec 6, 2023

House Chair,

Low economic growth has resulted in tax revenue collection being projected to fall short of this year’s budget estimate by a staggering R56.8 billion in 2023 and a R121.4 billion over the next two years, and this, the ACDP (I’m sure, as well as everyone in this House) finds deeply concerning.

What are the causes of this? Well, it is lower commodity prices which is an external factor; weaker global growth — also an external factor. But, internally, increased incidents of loadshedding and Transnet’s logistics crisis have significantly impacted on corporate tax collections. 

These last two are issues that we can address. Obviously, there are also global geopolitical events, including the war in Russia and Ukraine. But, when we have our own goals which are foreseeable, these like Transnet and Air Comp should have been avoided.

Now, as indicated in the Adjustment Appropriation Bill, there were significant reductions and even Parliament will face a budget cut going forward. The question is how is Parliament going to managed with budget cuts as well.

Hard-pressed households are already facing spiralling cost of living increases and will not be able to avoid possible tax increases that could be included in next year’s budget as a result of the revenue shortfall.

Government debt and debt service costs are set to rise again — a matter of great concern. Gross loan debt is now expected to peak at a staggering R6.133 trillion or 77.77% of GDP debt service costs. This is the biggest concern and this, I’m sure honourable Minister, concerns you as well.

Debt service costs continue to spiral and crowd out expenditure on much needed items like health, education, fighting crime and social services. Out of every R5 collected, R1 is paid to our lenders, and this is unsustainable going forward.

We all know that the solution is much improved economic growth. Sadly, GDP contracted by 0.2% in quarter three of this year after two successive quarters of growth and this is regrettable. 

The main constraints, as we know, to economic growth and job creation are corruption (particularly in public procurement), Eskom loadshedding, Transnet’s dysfunctional logistic sector and what we believe are poor policy decisions by government.

The ACDP will not support this bill.

I thank you. 

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