Minister of Finance Tito Mboweni delivered the Mid Term Budget speech in Parliament . Photograph; Phando Jikelo/African News Agency(ANA)
OPINION - NOVEMBER marks 160 years since Indians first arrived to work on the sugar cane fields of KwaZulu-Natal.
Those who left India did so in search of better opportunities. They knew it would not be easy. But they were prepared to make sacrifices, so that their children would be better off.
This month, as we reflect on this milestone, we should consider the future we are bequeathing to our children.
The future was sketched by Tito Mboweni, our Finance Minister, when he recently updated the country on the state of our finances.
While our forefathers lived frugally, we are living beyond our means. To afford our lifestyle, our country has to borrow R2.1 billion every day.
To put this into context, 2.1 billion seconds is just over 60 years, longer than most people work in their lifetime.
By March next year, which is the end of the current financial year, we would have borrowed R3.9 trillion. In three years from now that figure would have ballooned to R5.5 trillion.
If we went back merely 1 trillion seconds in our history, we’d go back almost 32 000 years. That would take us into the Ice Age where there is no recorded history. What we do know is that back then early man was living in caves, vulnerable to the climate and animals that have long since become extinct.
Whichever way you look at it, we are borrowing too much. The interest alone amounts to 21 cents on every rand that is collected on taxes.
Given how much we are borrowing, children who have not yet been conceived will be paying back the loans and the interest.
Mboweni does have a plan to cut spending and it hinges on cutting the amount of money the government spends on wages. It would mean cutting the salaries of those who earn the most and no increases for everyone else for the next few years.
But that’s not going to be readily accepted, so, in the coming years, expect even less from government departments – that’s if they remain open.
The exception seems to be SAA, which has been granted another R10.5bn bailout. In February the minister allocated R16.4bn to the airline.
Mboweni has taken money from the police (R1.2bn) and the justice system (R1.2bn) to fund SAA. Monies that were meant to build new schools and improve health care have also been diverted to the national airline. As a result, don’t expect any improvement in fighting crime, education or health care.
All put together, the future looks bleak.
And all this doesn’t take into account the impact a second wave of Covid-19 could have on our economy.
The coming years are going to be tough. But, if we adopt the mindset of those who arrived in 1860, we can survive. We would need to live a frugal lifestyle.
And no matter how tough things may become, we need to remember that through our sacrifices our children will enjoy a better future.
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