The National Treasury reports that technical work is continuing on permanent measures to anchor fiscal policy and ensure debt sustainability and that a discussion document on the controversial measure will be released by the end of March 2025.

“The National Treasury has brought in academics, international experts and other stakeholders to make inputs on fiscal anchor policy options,” the Medium-Term Budget Policy Statement reads.

It adds that proposals are under consideration for legislative changes to ensure that debt sustainability is embedded in the planning and budgeting processes of government.

The mooted policy reform is in response to a deterioration in South Africa’s fiscal position, which the National Treasury says has been limited, but not prevented, by fiscal consolidation measures.

Between 2008/09 and 2023/24, government debt grew from R627-billion, or 23.6% of GDP, to R5.26-trillion, or 74.1% of GDP, resulting in debt-service costs that now consume 21.6% of revenue.

Any fiscal anchor would imply more permanent measures to embed debt sustainability, with a long-term debt sustainability framework having been developed.