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A private member's bill, drafted by Member of Parliament for the Democratic Alliance Geordin Hill-Lewis, has been tabled and was released in Parliament's circular of announcements, tabling and committee notices on Tuesday.
The Fiscal Responsibility Bill was first mentioned by Hill-Lewis ahead of Minister of Finance Tito Mboweni's 2020 Budget speech as a measure government could consider to help contain fiscal debt. Mboweni said during his speech that National Treasury expects SA to pay R229 billion in debt-servicing costs in 2020/21.
This would be the third-largest item on the state's Budget, behind only basic education and health. Debt servicing costs are now larger than the budgets for police, defence and law courts and prisons.
SA's gross loan debt, meanwhile, is expected to reach 71.6% of GDP in 2022/23.
The Fiscal Responsibility Bill provides for a rule stipulating that from the financial year 2020/21 to the financial year 2023/24, net loan debt as a percentage of GDP may not exceed the net loan debt of the previous year.
The bill calls for the minister of finance to contain net loan debt within certain margins - namely 50 - 55% of GDP, ensure that a main budget surplus is in place and that compensation of employees does not increase from financial year 2021-2022.
The bill adds that the minister of finance must review the fiscal rules within four years of the commencement of the bill as an act, and thereafter must regularly consult the Financial and Fiscal Commission when reviewing those rules.
"The minister must table a report in the National Assembly setting out statistics for the period under review related to compliance with the fiscal rules.
"The minister must table statistics for the period under review related to any exemptions that were applied for indicating whether such exemption was granted and whether the terms of the exemption were complied with," the bill adds.
