It is abundantly clear that South Africa finds itself in a financial predicament and that the country’s economic ship is sinking fast when one considers government debt and the growing budget deficit.
The only way to save this ship is through economic growth. However, the harsh reality is that there are no real plans to bring about economic growth and cut back on state expenditure.
Cosmetic changes are not enough to remedy the situation. The only way in which the government will get its debt burden under control is to reduce its wage bill and limit unnecessary expenses.
And yet the ANC government keeps spending vital funds on unnecessary things, like changing the names of towns and cities.
There is some relief as regards personal income tax, but it is inadequate. The FF Plus would have liked to see greater tax relief because it is the only practical way in which economic growth can take place. People must have money to spend so as to stimulate the economy.
On the negative side, it is alarming that the budget deficit is still increasing and that the tax revenue deficit is an estimated R213 billion. Money must be borrowed to cover the deficit and as a result, loans’ financing costs are getting out of hand.
The government’s debt will increase to approximately R4,38 trillion in the coming financial year, which comprises 82% of the Gross Domestic Product.
Although costs must be cut in every way possible, quite the opposite seems to be happening as financial aid is constantly provided to struggling public enterprises.
The R6,1 billion allocated to the failed SAA and the R7 billion to Landbank are an unacceptable waste of taxpayers’ money.
Changing the names of cities, like Port Elizabeth in the Eastern Cape, costs millions of rand and serves as proof of the government’s skewed priorities.
The money squandered in this way should rather have been used on priority projects that will help stimulate the economy, like infrastructure development.
Policy certainty must be created to attract investments. One of the greatest negative factors that hamper South Africa’s economy is the uncertainty that expropriation without compensation creates for prospective investors.
Failed ANC policy and restrictive legislation must be abolished. If that does not happen, economic growth will not take place, no matter how many cosmetic changes are made.
Read the original article in Afrikaans by Wouter Wessels on FF Plus
