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Interest swallows state money

Oct 27 2009 14:11 Greta Steyn

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Pretoria - Spending on the state interest bill is far and away the expenditure item that will grow the most over the next three years, with average annual growth of 18.1% expected from 2009/10 to 2012/13.

The Medium-Term Budget Policy Statement showed overall consolidated government expenditure is set to grow by 7.8% over the same period. While this is higher than the expected inflation rate, it reflects cutbacks in real non-interest spending which had been rising by 9% a year in real terms since 2003. But the surge in state debt costs has made the continuation of spending at this rate impossible.

Government's biggest spending priority, judged by increases in spending, is for housing and community amenities, which is projected to grow at an average annual rate of 12.3%.

Public order and safety, including police, is expected to grow at 9.3% and environmental protection at 10%.

The cutbacks in spending come at economic affairs, which are projected to decline by 3.8% over the framework period. Transport will fall by 2%.

- Fin24.com

 
 
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