The biggest threats to the fiscus in the coming years, according to National Treasury:
- The economy and revenue could underperform projections. The GDP growth outlook may be improving, but the relationship between growth and revenue collection could deteriorate further.
- Strains and imbalances within public finances may become more pronounced. The public-sector wage bill has increasingly crowded out other spending and limited government's ability to increase public employment.
- Debt-service costs are set to absorb a rising share of revenue.
- Several years of fiscal restraint have left funding gaps in both infrastructure and social services, reflected in the build-up of unpaid accounts and financial imbalances.
- Continued financial deterioration of major state-owned companies is a clear and substantial danger to the public finances.
Source: Budget Review, National Treasury.