South African politicians should get less money – Dawie Roodt
Renowned economist Dawie Roodt said the only way to stop South African politicians from overspending is to give them less money.
Roodt shares his views during a discussion about the recent debacle around South Africa’s planned value-added tax (VAT) increase.
Finance Minister Enoch Godongwana withdrew his 2025 Budget due to legal action from the Democratic Alliance related to a planned 0.5 percentage point VAT increase.
Godongwana said the National Treasury will table a new 2025 Budget Review on Wednesday, 21 May 2025.
The new budget will maintain the value-added tax (VAT) rate at 15%, reversing the 0.5 percentage point increase proposed in the 12 March budget.
The biggest concern about the VAT reversal is that it will leave a R13.5 billion gap in the 2025 Budget, which must be filled.
Roodt argued that the R13.5 billion gap is not significant in the context of South Africa’s budget, which amounts to R2.6 trillion.
He said South Africa has enough money. “The problem is not the amount of money, it is excessive state spending,” he said.
Consolidated government spending is increasing at an annual average of 5.6%, from R2.4 trillion in 2024/25 to R2.83 trillion in 2027/28.
South Africa’s state spending is highly redistributive, with the social wage making up 61% of total consolidated non-interest spending over the next three years.
State spending, especially on social wages, has been rapidly increasing for the past sixteen years, creating budget deficits and forcing the government to fund it with debt.
South Africa’s debt-to-GDP (gross domestic product) ratio increased from 26% in 2009 to around 76% in 2025.
Adding the debt from state-owned enterprises and local authorities increases the country’s debt-to-GDP ratio to 95%. This is entirely unsustainable.
Due to the rising debt burden, South Africa will spend R424.9 billion on debt-service costs this year. This is set to increase further as debt increases.
The government must start running budget surpluses to reduce the debt burden. This can only be achieved by economic growth and reducing state spending.
“The state did not run out of money or need more money. The emphasis must be that they should spend less money,” Roodt said.
“We have to look where the state can save money. The government is a huge destroyer of capital. We need to cut back on state expenditure.”
He said the National Treasury should not try to find more money by taxing South Africans more. Instead, the state must use the existing money more efficiently.
However, this is easier said than done. Politicians are after votes and power, and cutting spending is a sure way to lose both.
This is why Roodt suggested that politicians should be given less money to spend, forcing them to waste less and become more efficient.
“The only way we can get politicians to spend less money is to give them less money,” Roodt said.
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