Don’t be fooled by Finance Minister Tito Mboweni’s “lipstick” budget. South Africa is becoming mired in bankruptcy and the government is not going to take the necessary steps to arrest our slide. That would require the ANC to choose ordinary South Africans over its own political support base.
South Africans needed to hear a Marshall Plan – a clear plan to stabilise our finances and kickstart growth. They didn’t hear it from Mboweni but they’ll be hearing it from me when the DA launches its election manifesto tomorrow.
What Mboweni did tell us is that our nation’s debt will breach R3 trillion this year and keep growing fast, our ANC government is living beyond its means, and South Africans will be paying higher taxes and seeing less for it in future.
Taxpayers will be spending R69 billion on bailing out Eskom over the next three years with further bailouts thereafter bringing the total to R150 billion over the next decade.
We’ve already given Eskom R419 billion in bailouts. Yet even a grand total of R569 billion in bailouts coupled with economy-killing 356% electricity price increases over the past decades and a further 56% price increase over the next three years will still not guarantee the lights being kept on.
Yet still, we hear no commitment to cutting Eskom’s bloated wage bill. The utility has 27 500 more staff than it needs. But rather than implement urgent cuts to what is effectively the ANC’s political patronage system, President Ramaphosa last week ruled out job cuts.
Our bloated public sector wage bill will not be meaningfully reduced by natural attrition and an early retirement programme. But once again, any measures that negatively affect the ANC’s support base are off limits.
So the gap between government spending and tax revenue continues to widen. Tax revenue shortfall has grown by over 50% from R27.4 billion in the 2018 MTBPS to R42.8 billion. Economic growth forecasts over the next three years have been revised downwards.
SA is spending over R1 billion per day just to pay the interest on our debt, which is now set to breach 60% of GDP. This means there is less and less money available to spend on education, health and social services. And still the government intends to forge ahead with the unaffordable, unimplementable National Health Insurance (NHI) scheme.
SA is reaping what the ANC has sown and will continue to do so unless they use the power of their vote to bring real change. The World Bank has made it clear that without a radical shift in policy, SA’s economy will remain stagnant over the next decade, unemployment will remain unnaturally high (above 25%), and the number of people living in poverty will continue to grow.
The DA’s plan to urgently reduce fiscal risk and stabilise our economy includes these actions steps:
- Splitting Eskom in two, into generation and transmission/distribution and enabling cities and municipalities to buy directly from private power producers, as per our “cleaner energy” (ISMO) bill. SA vitally needs competition in the energy sector.
- Placing SAA in business rescue and selling off non-core SOEs.
- Rejecting NHI and introducing our affordable and implementable universal health policy instead.
- Reducing the size of the public sector wage bill by cutting patronage positions.
- Reducing the size of the cabinet, which is currently bloated by patronage positions, and picking the best people possible to run the country.
Our plan to kickstart investment / economic growth includes these actions steps: Guaranteeing private property rights and rejecting expropriation without compensation.
- Liberalising our visa, exchange control and labour policies to attract skills, capital and tourists.
- Providing a simplified, truly broad-based empowerment programme from which small or foreign businesses can be exempted.
- Exempting small businesses from some labour legislation.
- Scrapping the Mining Charter and overhauling the MPRDA. With reforms such as these, we can put SA on a growth trajectory of 5-8%, in line with Botswana, Rwanda and Ethiopia. This would rapidly reduce poverty, inequality and unemployment in SA.
On 8 May 2019, South Africans face a choice between the corrupt, old, disorderly ANC and the honest, modern and orderly DA. The DA can deliver to the whole country what we have delivered in the Western Cape, which accounted for half of net job creation in the past year (95 000 out of 188 000 jobs, Q3 2017 – Q3 2018), and where broad unemployment (23%) is 14 percentage points lower than the national average (37%). A vote for the DA is a vote for jobs and growth.