SA’s debt ‘modest by global standards’

3 July 2012

The government is doing all it can to ensure sustainable debt levels while delivering efficient services to South Africans, says Finance Minister Pravin Gordhan, noting that the country’s debt “remains fairly modest by international standards”.

“When the crisis hit in 2008/09, we had a fiscal surplus which enabled us to absorb the shock from the recession. Our debt still remains fairly modest by international standards,” Gordhan said at the launch of the 2012 tax season in Pretoria on Monday.

“We are doing everything possible as government to ensure that we maintain the sustainability of our debt picture on the one hand, and deliver effectively to South Africans that which we are required to deliver.”

Fiscal strength played an important part in sustaining the government and economy. In the recession, South Africa lost R60-billion in revenue that has not been recovered.

“We have managed to have a low debt load even by international standards,” he said.

“Where gross debt might reach about 42% over the next three years, we are still better off than most countries in the world as far as our debt load is concerned.”

The government would continue maintaining the same level of spending as before the recession, Gordhan said. “While we have made downward adjustments in our spending patterns, we’ll still sustain real growth in spending.”

Registered taxpayer numbers have doubled

The number of people registered as taxpayers in South Africa has doubled in the past two years, according to Business Report, growing from 6-million in 2010 to 13.7-million in March 2012.

While many registered taxpayers fall below the income tax threshold, an estimated 12-million individual taxpayers contributed R251.6-billion to South Africa’s revenue last year.

Gordhan thanked the public “for their loyalty to the country, enabling government to do what it has done in the past 18 years – some of which could have been done differently, and some which could have been done better”.

The relationship between taxpayers and the government was crucial in order to have a viable democracy, Gordhan said.

“Governments and the fiscal strength of governments play a very important part in sustaining both the government itself and the economy more generally.”

Gordhan said he was aware of instances where taxpayers’ money was not used as effectively as it should be.

“[We] want to assure taxpayers that we will continue to increase our efforts to ensure effective use of the money and effective implementation,” he said.

Source: SANews.gov.za