After more than a decade of government budget deficits, and attempts at austerity, the government has failed to consolidate its financial position. There have been spending cuts in many areas of the government, but spending on wages, grants and debt have increased and the economy has been much weaker than expected.

Research by the Wits Public Economy Project (PEP) shows that the National Treasury has been overly optimistic in its assessment of the outlook for the economy and fiscus, and that spending cuts have led to a reduction in the quality and quantity of government services. Past attempts at austerity have been painful, and PEP says we should expect more pain if the government is to return the country to a semblance of fiscal stability.

Michael Sachs is Adjunct Professor at the Southern Centre for Inequality Studies at the University of the Witwatersrand. He leads the center's Public Economy Project and he spoke to Peter Ndoro...