16-05-2025
Third time lucky? SA needs to plug R75bn budget hole
The government announced in February last year that it would start drawing from it, which it can do without parliamentary approval, to limit borrowing.
In April the central bank's gold holdings jumped nearly 6% month-on-month to R245bn, driven by higher prices of the precious metal.
Civil- society groups including the Institute for Economic Justice have urged Treasury to use the contingency reserves instead of raising tax.
The government needs a simple majority to pass the budget, but further disagreements in the ruling coalition could derail a smooth vote.
Parliament has 16 working days from when the budget is tabled to approve the fiscal framework and revenue proposals, after which it has to pass two other pieces of legislation, namely the division of revenue bill and the appropriation bill.
The government can spend up to 45% of last year's budget until parliament has passed the new budget. After that, spending would have to be cut.
The revamped fiscal framework, which sets overall limits for government spending, will be keenly watched by S&P Global Ratings, which has a positive outlook on SA and is scheduled to review its rating on Friday.
A credible outcome could secure the first rating upgrade for SA in two decades, while the opposite could raise future borrowing costs and dent investor appetite for local assets.
Reuters
