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Finance Minister Pravin Gordhan's plan to maintain current spending levels and increase borrowing has received a thumbs-up from Cabinet.
"Cabinet endorsed the proposed approach to maintain the current spending levels through borrowings to offset the budget deficit," government spokesperson Themba Maseko told a media briefing in Cape Town on Thursday, following Cabinet's fortnightly meeting the day before.
Gordhan on Wednesday warned that revenue collection was currently R19-billion below target, and could be as much as R60-billion below by the end of the year.
"After holding up reasonably well in the past year, our revenue collection has deteriorated in the first three months of this fiscal year," he told the National Assembly during debate on his budget vote.
Maseko said Gordhan had briefed Cabinet on the state of the economy and the fiscal outlook.
"The report indicated a decline in revenue collection which will lead to a larger than anticipated budget deficit."
Government departments would be required to review their spending plans "to ensure effective and efficient use of the limited public resources", Maseko said.
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