General Notice No. 289 of 2018

Fiscal Responsibility Bill, 2018 » Notice of intent to introduce a Private Members Bill into Parliament and...

Title	Fiscal Responsibility Bill, 2018 » Notice of intent to introduce a Private Members Bill into Parliament and invitation for public comment thereon
Department	Parliament of the Republic of SA
Gazette	National Gazettes, No. 41659 of 29 May, 2018, 5 page(s), 88.7Kb

4    No. 41659                 GOVERNMENT GAZETTE, 29 MAY 2018

PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA
                                                   NOTICE 289 OF 2018
          
           NOTICE OF INTENT TO INTRODUCE A PRIVATE MEMBER’S BILL AND
           INVITATION FOR COMMENT ON THE DRAFT FISCAL RESPONSIBILITY

BILL, 2018

Mr David Maynier, MP, acting in accordance with section 73(2) of the Constitution of the Republic
           of South Africa, 1996, intends to introduce the Fiscal Responsibility Bill, 2018, in Parliament during
           the second quarter of 2018/19.    An explanatory summary of the Bill is hereby published in
                                                                                  th
           accordance with Rule 276(1)(c) of the Rules of the National Assembly (9  Edition).

South Africa’s debt levels have risen rapidly as a percentage of GDP between 2008/2009 and
           2018/2019.

In 2008/2009, the national debt, measured as net loan debt, amounted to R525.6 billion or 21.8% of
           GDP.   However, by 2020/2021, the national debt, measured as net loan debt, will increase to R3.03
           trillion, or 52.2%  of GDP  and will only stabilize at 53.2% of GDP in 2023/2024.

As a result, debt service costs are set to increase to R180.1 billion in 2018/2019, R197.7 billion in
           2019/2020 and R213.9 billion in 2020/21.

By 2020/2021, R213.9 billion will be spent on debt service costs, which is:

•  R120 billion more than what will be spent on higher education;
               •  R115 billion more than what will be spent on police services;
               •  R20 billion more than what will be spent on social grants; and
               •  R8 billion more than what will be spent on health in 2018/2019.
           The Fiscal Responsibility Bill, 2018 (“the Draft Bill”), will therefore introduce statutory fiscal rules
           aimed at containing national debt and debt service costs in South Africa.
           The Draft Bill will provide for:

•  a fiscal rule prescribing  that, for each financial year from 2019/2020 to 2022/2023,
                   consolidated net loan debt expressed as a percentage of GDP must not be more than it was
                   the previous year;
               •  a fiscal rule prescribing that, for each of the financial years from 2019/2020 to 2022/2023,
                   aggregated government guarantees must not be more than they were for the financial year
                   2018/2019;
               •  a review of the fiscal rules by the National Assembly every four years, beginning in
                   2023/2024 by either amending, renewing or terminating the fiscal rules by way of an
                   Amendment Bill;
               •  an exemption from the fiscal rules to be granted in respect of a specific financial year by the
                   National Assembly  upon application by the Minister of Finance, with good cause having
                   been shown and on the recommendation of the Standing Committee of Finance; and

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General Notice No. 289 of 2018

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