True extent of South Africa’s economic crisis makes President’s economic recovery plan seem even more disappointing

FF Plus

True extent of South Africa’s economic crisis makes President’s economic recovery plan seem even more disappointing
True extent of South Africa’s economic crisis makes President’s economic recovery plan seem even more disappointing

Given the true extent of South Africa’s economic and fiscal crisis, the economic recovery plan that President Cyril Ramaphosa announced on the afternoon of 15 October 2020, is utterly disappointing. Everything the President announced was a mere rehash of previous promises and plans. Many similar plans were announced in the past, but were never implemented.

The President and ANC are sticking to the wrong course with policies like Black Economic Empowerment (BEE), expropriation without compensation and restrictive labour legislation, which deter investors instead of stimulating economic growth and creating more jobs.

The President is clearly caught in the middle between the ANC’s socialist economic ideology on the one side and Nedlac (the National Economic Development and Labour Council) on the other side.

The FF Plus would have liked to hear that labour legislation will be amended so as to attract investors, that the failed policy of BEE will be done away with and that special economic zones or free-trade regions will be established to stimulate the economy and create jobs.

In addition, businesses and individuals need greater tax relief. The only way to save the economy in the long term is to lower rates and taxes, to increase disposable income and to make South Africa more attractive to investors.

Extending the social grants that were implemented to bring relief during the Covid-19 lockdown is definitely not the correct way to restore the economy and sustainably eradicate poverty.

Even the 800 000 job opportunities that will be created are no more than an extension of the Covid-19 social stimulus package seeing as the government will artificially create these jobs and pay the salaries with tax money that it does not have.

Not one of the new job opportunities that President Ramaphosa envisages will be created through spontaneous economic growth. It is all merely an extension of the existing, and unsustainable, welfare state.

Of the 800 000 job opportunities, 60 000 will be positions aimed at building and maintaining municipal infrastructure and 300 000 will be additional positions at schools for educational assistants and individuals who perform routine tasks.

This announcement does not instil any confidence seeing as the government is not supposed to be creating jobs. Instead, the government is supposed to create a favourable environment for the private sector to enable it to create job opportunities.

The 800 000 new positions must also be seen against the backdrop of the 2 200 000 job opportunities that were lost during the lockdown period and the millions more South Africans who were unable to find a job even before the pandemic.

The FF Plus is disappointed in the prospects for economic recovery based on what the President announced this afternoon.

Empty promises and damaging policy will not achieve anything.

Read the original article in Afrikaans by Dr Pieter Groenewald on FF Plus

South Africa Today – South Africa News

Disclaimer: The views of authors published on South Africa Today are their own and do not necessarily represent the views of South Africa Today. By viewing, visiting, using, or interacting with SouthAfricaToday.net, you are agreeing to all the provisions of the Terms of Use Policy and the Privacy Policy.