Medium-term budget speech | Austerity measures expected to dominate statement

CAPE TOWN - Cutting expenditure may be the most effective way to deal with our deteriorating finances.

South Africa is in danger of going bankrupt, according to Finance Minister Enoch Godongwana.

But his proposed austerity measures are not going down well with unions.

Godongwana will reveal his plans in the mid-term budget speech on Wednesday.

"The bottom line is that expenditure has continue to go up since February’s budget," said Unity SA CEO Cas Coovadia.

"The fiscal situation has become more constraint. Our debt to GDP ratio was at 7.9 percent in the previous quarter.

"It is now at 72.7 percent and so that GDP ratio has gone up.

"With exception of cutting expenditure, we don’t have too many choices," he said.

"We have a situation where we don’t have too many choices. We are going to have to cut expenditure."