If things keep going the way they are, we could run out of money by 2042.

That was the message that Professor Jannie Rossouw of the Fiscal Cliff Study Group relayed to members of Parliament during yesterday’s public hearings on the budget.

Fin24 reports that Rossouw warned South Africa was closer to the fiscal cliff than ever before and, that without a drastic cut in expenditure, we could be broke in just 23 years.

“We cannot continue,” he told MPs, before making recommendations of how to cut expenditure.

Rossouw highlighted the expenditure of ministries was exorbitant – spend for the ministry of Defence and Military Veterans was the most at R137.7m, while Treasury spent the least on its ministry at R4.4m.

Rossouw suggested if all of the 35 departments cut down expenditure to that of Treasury, then R1bn could be saved.

After that, he suggested that the government start looking at reducing the size of the Cabinet.

He emphasised that state-owned enterprises posed risks to the fiscus – Eskom being the biggest headache.

He suggested that costs of Eskom be cut by removing bonus payments altogether, reducing the headcount and having the power utility post job numbers on the website on a weekly basis.

He also called for Eskom board meetings to be opened to the public. “After all, it is a monopoly owned by government, serving the people. Nothing can be secret,” he said. Overall transparency at state-owned enterprises must be improved, he said.

It’s always Eskom, although all of the major SOEs are draining the economy.

Looks like rough times ahead.

[source:fin24]