Treasury stands by fiscal consolidation decisions

Treasury says fiscal consolidation is internationally recognised
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The Treasury says it does not agree with sentiments that fiscal consolidation is internationally criticised.

The head of Treasury’s budget office, Edgar Sishi, spoke during a meeting of Parliament’s Standing Committee on Finance and Select Committee on Finance, where they discussed submissions received on the 2024 budget.

Sishi says Treasury has noted concerns and criticisms around its fiscal consolidation decisions, but they are convinced it is the right path to follow.

“We don’t see broad or international repudiation of fiscal consolidation as a principle. What we see are warnings and cautions about self-defeating actions and strategies that we make sure the steps we take are strategic. In fact, international advice has been to implement fiscal consolidation, so we respectfully disagree.”

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The Treasury says it is very unfortunate that state-owned companies have been issued numerous bailouts and that it has added to the country’s economic woes.

According to Sishi, a few submissions have been made about concerns over bailouts for SOEs.

“This is a very unfortunate, galling reality of fiscal history that shouldn’t have happened… They have had a lot of support, leading to the government not being able to fund what needs to be funded. In fact, this contributed to the fiscal problems we are trying to fix.”