Successful fiscal policy is not based on ideology

It is almost time for the minister of finance to present the budget. The South African economy is declining and basic indicators, such as unemployment figures, are sky-high.

The outcome of the present policies have already proven not to benefit the country’s people.

Economic success or failure is determined by market forces. The market always has the last word.

It had already evaluated the government’s policy environment when Covid struck and SA faced a downgrade to junk status. Since then, the situation has deteriorated even further.

The role of the state is to look after its citizens and to create a climate in which private investors are willing to invest their capital and expertise.

Unfortunately, the state is failing in both responsibilities and the future of every South African is at stake if we continue to follow the present approach.

One tool in the hands of the state to create trust and the right business climate is its policy environment.

For example, a policy of expropriation without compensation is short-sighted if we want economic growth.

Why would anyone invest in a country where the state can deprive investors of their assets without paying for them?

In 1994, we had a functioning with very effective parastatals. Today, all these stateowned enterprises are becoming dysfunctional because of transformation policies such as cadre deployment, B-BBEE and affirmative action.

Under the facade of policy, the name of the game is looting the country’s resources on all levels. The poorest of the poor pay the price as unemployment increases, leading to even more poverty – the proverbial vicious circle.

South Africa must consider its future with a different mindset and approach.

We require thriving businesses that generate job opportunities, a secure environment supported by an efficient police force, an incorruptible government and a policy framework that fosters trust and attracts investments. A prosperous agricultural sector with productive and profitable farms is essential.

We also need a government that acts in the best interest of all citizens – not for the benefit of their own pockets.

Economic growth opens doors to opportunities for those ready to accept life’s inherent responsibilities. Empowerment is a mutual endeavour. Individuals must embrace the key elements for success, including a thirst for knowledge, a sense of urgency, a future-oriented mindset and a strong sense of responsibility.

An entitled mindset will lead to an empty-handed outcome. When you proactively take charge of personal growth and commit to self-improvement, you can truly seize the benefits that economic progress brings.

At all levels, every decision should be tested against the imstate pact of the outcome on economic growth.

As Henry Hazlitt, American economist, said: “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not for one group but for all groups.”

We must create better infrastructure, starting with an efficient power supply, better education, improved safety and a clamp down on corruption.

No budget means anything if taxpayers’ money merely goes into corrupt officials’ pockets. We hope that the upcoming budget will focus on economic rather than ideological principles.