Finance Minister Enoch Godongwana has warned of tough decisions come the medium-term budget policy statement on Wednesday, adding that there is a risk that the government will run out of money if no action is taken.<\/p>\n\n\n\n
This is according to a Sunday Times<\/strong><\/a>, which reported Godongwana’s sentiments towards the fiscus during his address at the Kgalema Motlanthe Foundation annual Drakensberg inclusive growth forum this weekend. <\/p>\n\n\n\n The finance minister, as well as the National Treasury, have noted recently that pressure on household spending, business investment, export revenues and the cost of imports have all resulted in weaker-than-expected tax income. As a result, both the Minister and Treasury targeted government spending to taper off the widening budget deficit. <\/p>\n\n\n\n On Friday, Godongwana said in addition to localised problems, the Lady R scandal had also affected the economy as \u201ceverybody became scared that we\u2019re likely to have secondary sanctions.” <\/p>\n\n\n\n \u201cMarkets tightened, and even on the borrowing side … there\u2019s less revenue. That\u2019s my pain,\u201d said Godongwana. Godongwana said this had happened while spending was growing. The Treasury would have to find a balance, he said.<\/p>\n\n\n\n The National Treasury, therefore, recently proposed drastic steps to rein in spending as the government has run out of money and faces a debt trap \u2013 including a freeze on new public service jobs, stopping procurement contracts for all infrastructure projects, and keeping public servant salary increases in check.<\/p>\n\n\n\n