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CESA calls on National Treasury to adopt a balanced approach to fiscal responsibility and economic growth

By Chris Campbell, CEO of Consulting Engineers South Africa (CESA)

In response to National Treasury’s call for cost containment measures to close the fiscal gap, as alluded to in the Sunday Times and several other media publications, while CESA understands the need for fiscal responsibility, we are concerned about the potential implications of such proposed measures.

Although National Treasury may not explicitly have used the term “austerity,” it is clear that these measures are effectively serving that purpose. National Treasury has imposed a freeze on new recruitment, which could have far-reaching consequences, especially in sectors such as healthcare and local government, where there is already a shortage of critical personnel. It is in fact critical to address these shortages to ensure the proper functioning of essential services.

Additionally, the freeze on all new infrastructure projects raises questions about its wisdom, especially during challenging economic times. Investing in infrastructure even during economic downturns plays a pivotal role in stimulating economic growth and development. 

Finding the right balance between fiscal prudence and economic development is essential. While we recognize the necessity of expenditure control, we must also take into account the long-term consequences of neglecting our infrastructure. 

Therefore, we pose the question of whether withholding spending, as advised by the National Treasury, represents the most effective approach to stimulate economic growth. We advocate for placing more emphasis on prioritization and deliberate expenditure in specific areas to yield the desired economic outcomes.

We urge National Treasury to carefully consider the prioritization of spending and to equip government departments with appropriately skilled personnel to ensure that our investments yield the desired results. Downsizing or right-sizing should be accompanied by the necessary skills development to maximize the impact of government expenditure.

While we appreciate the need for fiscal responsibility, we encourage National Treasury to adopt a balanced approach that ensures the long-term sustainability of our infrastructure and the growth of our economy. 

As CESA, we are available to engage in constructive engagement on these matters to find solutions and provide guidance that can benefit all South Africans.

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