Such increases in spending lead to excessive borrowing on which we must pay higher interest costs, leading to less money being available to spend on urgent needs. The people who then suffer most are generally the poor and unemployed. Interest is the second largest item on the budget, second to Education. The better Government manages the money which the citizens put at its disposal, the better the confidence in the economy. This confidence is necessary for South African and foreign businesses to invest in production and jobs.
Government regards the current level of the budget deficit as too high, and plans to bring it down.
This will be done by limiting our borrowing and making sure that taxpayers' money is spent efficiently. We need better value for each rand spent. Another possible way to decrease the budget deficit is by increasing taxes. Tax rates on individuals and companies are however already high. If the rates are increased further, it will leave people with less money to spend or to save.