October 2018 could have gone down in history as the month that South Africa finally tackled its jobs crisis head on. President Ramaphosa held his Jobs Summit and got to appoint a new finance minister. The Medium-Term Budget Policy Statement is still two weeks away and yet it is already clear that our jobs crisis is here to stay.
Quite frankly, the Jobs Summit was “lipstick on a pig”. No matter how much Ramaphosa dresses up his approach to the jobs crisis, it doesn’t change the reality. He is clearly not prepared to take the necessary steps to tackle South Africa’s single biggest problem, our unnaturally, cruelly high unemployment rate. Why? Because ANC unity is a higher priority. Our unemployment level of 37.2% has such horrific social consequences that it could justifiably be called a crime against humanity. But it can only be tackled by facing up to certain ANC-aligned interest groups and rejecting failed ANC ideology. Ramaphosa is not prepared to do that.
Earlier this year, Ramaphosa said the summit would: “need to take extraordinary measures to create jobs on a scale that we have never before seen in this country”. He knows as well as I do that only sweeping systemic changes will turn the tide of unemployment.
Our labour market must be liberalised, with small business exempted from regulation that makes it so difficult and unattractive for them to hire more staff. BEE in its current, corrupt guise, and the Mining Charter, must be scrapped. SADTU’s stranglehold on our basic education system must be released. Eskom must be split up and metros and municipalities allowed to buy power directly from independent power producers. Non-productive SOEs must be sold or shut down. Our bloated public sector wage bill must be reduced to free up resources for spending on essential infrastructure and social services. Tourists must be given 30-day visas on arrival. And an independent National Director of Public Prosecutions must be appointed to start to jail corrupt politicians.
None of these extraordinary measures were even considered at the jobs summit. Instead, it produced a list of dozens of initiatives and projects that will rearrange the deck chairs on the Titanic, without changing its course. Far from committing to cut the bloated public sector wage bill, it placed a moratorium on public sector retrenchments.
In the past decade, the number of unemployed people has grown by an average of 300 000 per year. So even if the summit is successful in reaching its target of 275 000 new jobs per year, that will still not stop joblessness from growing, never mind turn the tide. Its very target is an admission of defeat!
The greatest obstacle to job creation in SA is the government itself, which is clinging to outdated, failed ideology of state intervention that increases the cost of doing business to the point that investment dries up, as it has now done. It needs to get out the way – stop imposing constraints on the private sector and stop seeing entrepreneurs and innovators as enemies. Ironically, the government is so busy meddling in the private sector that it is completely failing to do its own job, which is to deliver the public goods necessary for our society and economy to thrive: infrastructure, education, health, welfare and police services.
The optimism surrounding our new finance minister – the rand jumped from around R15 to around R14.50 to the dollar on his appointment – is probably misplaced, given his preference for greater state intervention. He recently tweeted his support for 40% state ownership of mines, state ownership of land and a state bank.
You only have to look at the VBS saga to see how a state bank would end up.
Auditor General Kimi Makwetu pointed out this week that irregular spending (corruption) in national and provincial governments amounted to R45 billion in each of the past two financial years. R45 billion is the equivalent of a million jobs at R45 000 per year. I’m not advocating for more public sector jobs, but it gives one an idea of the cost of corruption.
Without real reform, jobs summits are a joke. Our economy is going to remain stagnant and unemployment is going to keep growing until South Africa rejects the ANC’s outdated ideology and embraces the DA’s liberal approach based on market sensibilities, the rule of law and a lean, capable state.
Three quarters of all jobs created in the past year were created in the DA-governed Western Cape, despite a crippling drought in the area. That amounts to 123 000 new jobs created while during that same period 124 000 jobs were destroyed in Gauteng, the country’s biggest provincial economy. The DA is the Jobs Party, and voters can help solve the jobs crisis by voting for us in 2019.