The Institute for Economic Justice (IEJ) says the 2020 budget is politically reckless and economically destructive, arguing that the budget ignored the damage caused by austerity policies globally.
In a statement issued this week, the IEJ supports that after 10 years of economic stagnation, there is general agreement that the economy is in a long-term structural decline and that bold measures are needed to address the crisis.
“The only responsible and economically logical response to the problem is for government to lead in providing a stimulus to get the wheels of the economy turning,” it states.
The institution says this should occur through large-scale investment in economic, social infrastructure and services.
“The private sector has shown that it won’t invest under current conditions of low demand, which sees large idle productive capacity and capital. Without such government-led investment, the economic situation – including relative debt levels – will continue to worsen.”
The organisation says the budget is economically irrational and it does the opposite of what is required.
“The 2020 Budget proposes, over the next three years, total reductions of R261 billion. This includes a R160.2 billion reduction to the wage bill and cuts in spending on social services and infrastructure to the tune of around R100 billion. The tax relief and rebate measures proposed will not spur growth and will disproportionally benefit those with steady and higher incomes.”
In this video below, the Minister of Finance Tito Mboweni is giving his 2020 budget speech: