OF LATE, many of our heated national debates have been about money. The Fees Must Fall movement, Nkandla, the influence of the Guptas and many other skirmishes boil down to how government spends the country’s resources. But they are also about the kind of society we want to live in. They are battles about perceptions of equity and economic mobility, of developing human capital and confronting corruption. And in the background is the ever-present gaze of ratings agencies and foreign investors.
Much of the frenzy surrounding this year’s budget is necessitated by policy makers’ need to restore faith in the South African economy. Particular concern stems from the bogeyman of credit downgrades — to junk for foreign-currency instruments and to levels barely above junk for local currency instruments. For a small, open economy reliant on foreign capital, this is an important consideration.
Since ancient times, discussions about creditworthiness and fiscal prudence have often taken on moral tones. Those that live dangerously, overspend must be punished. Austerity must come down upon their profligate heads.