Rising Wages and Interest Costs a Slippery Slope – Treasury Official

The Citizen. South Africa’s public finances are moving in the wrong direction as the country is spending an increasing proportion of its budget on wages and servicing debt, a Treasury official has warned. “I think a good measure of a country that is not managing its finances [well] is one that spends its money on repaying debt and wages, and we are moving towards that and I think that is a very concerning trend,” Ian Stuart, acting head of National Treasury’s Budget Office, told delegates at the Government Technical Advisory Centre (GTAC) Winter School on Monday. His warnings come amid concerns that Treasury may not be able to stick to the plans for fiscal consolidation it announced in the February budget. Although it raised VAT by one percentage point and announced various measures to stabilise the country’s finances and debt, there has been increasing pressure to raise spending. Read the full article here.