FMF: Godongwana must cut public sector wage bill
The Free Market Foundation has called on Finance Minister Enoch Godongwana to use his mini-budget to ease the burden on taxpayers.
Godongwana will table his Medium-Term Budget Policy Statement in the National Assembly on Wednesday.
The foundation’s head of policy, Martin van Staden, told the media on Tuesday that the public sector wage bill must be cut to avoid unnecessary increases in government debt.
Van Staden said the time has now come for the government to cut its expenditure to fund infrastructure projects.
“Taxpayers have continued to be disrespected from time to time. Every time a politician has a so-called good idea, they expect the taxpayer to open their wallet and fund them. From smart cities, bullet trains and the National Health Insurance, the government never humbly tries to raise funds on their own or cut spending.”
Van Staden wants the government to downsize the cabinet, limit unnecessary expenditure and consider privatising state-owned entities.
“Instead of cutting wasteful spending, President Ramaphosa grossly expanded the size of his cabinet. Minister Enoch Godongwana must assist the president to bring about necessary fiscal prudence.”
On the NHI, Van Staden said tax on doctor-prescribed medication should be reviewed, as it is limiting access to healthcare by poor South Africans.
“Given the rise in the increase of medication, FMF is recommending that all doctor-prescribed medications be VAT exempt. It is a wonder to us that this was not done long ago already. VAT exemptions and reducing the price burden on the poor.
“If the government wants to restore the confidence of taxpayers, it needs to act swiftly to rein in out-of-control spending, particularly on public sector wages, provide some tax relief, and rid the government balance sheet of uneconomic, costly state-owned enterprises.
“We believe that there is scope for real reform after the 2024 general election, but it is incumbent on the government to turn goodwill into action. The Medium-Term Budget Policy Statement and the February 2025 budget are two of the last ‘easy’ opportunities the GNU will have to announce a reform agenda before the expectation that the next five years will just be ‘more of the same’ is solidified.”
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