How to save our economy
RECOVERY: CUT WAGE BILL, GET WEALTH TAX, SELL SOES
Experts warn ‘freebie’ mindset needs to go for SA to lift its head.
For South Africa to have a future and for the economy to “see heaven” in the coming years, those interested in rebuilding the country’s economy are best-suited for the job, instead of the ones thinking “money grows on trees”, analysts say.
South Africa’s economy saw more relief this week as President Cyril Ramaphosa announced that the country would be moving to lockdown Level 1 at midnight on Monday. This included the opening of borders for leisure and business purposes, permitting venues to host guests at a 50% capacity and an extension of the curfew.
Ramaphosa said rebuilding the economy, creating jobs and restoring growth was vital, with Cabinet building and finalising an economic reconstruction and recovery plan next week.
But, sideline people with “unsustainable expectations” who require money to be spent as this led to corruption, said economics professor Bonke Dumisa.
“The department of finance is surrounded by people who do not want to accept that money does not grow on trees.”
Another issue, said professor of government at the University of the Western Cape Patrick Bond, was the “conservative mindset” at Treasury and the Reserve Bank which needed to be in line with the rest of the world.
“Both the state’s fiscal and monetary stimulus packages have been crippled by that. A major shift in thinking is needed to reflect how state spending can boost an economy whose capitalists are on investment strike and where poverty has soared, given 4.5 million job losses due to the Covid-19 lockdown.”
How government can revive the economy:
Prioritise scrapping the public sector wage bill, immediately introduce wealth tax, sell stateowned enterprises (SOEs) which are a “headache” and change
South Africa’s “freebie” mindset if the country was “going to see heaven” in the next few years, said analysts.
The scrapping or cutting down on the highly criticised public sector wage bill was a good place to start to revive the economy as it was the country’s “downfall”, said Dumisa.
“Trade unionists are crying, rather than asking how they can help. They are still talking about salary increases and nothing on cutting down on the wage bill.”
Introduce a wealth tax, Bond added, with decisive steps to retain SA’s economic sovereignty – such as prosecutions of corporate thieves – and thereby halt illicit cash outflows, tax dodging schemes, and tender fraud.
Dumisa wanted to see stateowned enterprises privatised or sold off. “The headaches must go – even SAA. We cannot keep using tens of billions of rands to rescue them.
“If we want to see heaven in the next two to three years, we must change the mindset of South Africans.”
The headaches must go – even SAA