They say numbers speak louder than words. This is certainly true of Finance Minister Malusi Gigaba’s mid-term budget speech this week.
The numbers were practically screaming, telling us we’re fast running out of money. And our rand responded accordingly, dropping about 3% against the dollar.
Our national financial situation is bleak and the outlook bleaker still – unless we make some bold, brave changes.
Debt service costs have been our fastest growing item of spending, and will be 15% of our budget within three years, meaning for every R1 we have to spend, the first 15c will go to paying off debt.
As confidence in our economy continues to fall, it will cost more and more to service debt, leaving less and less to spend on digging ourselves out of an ever-deepening hole.
Almost half of all spending by government is on wages and interest. This is extremely unproductive and unsustainable.
It’s one thing to borrow to invest in things which could create growth and jobs for the future, such as a top quality education system or enabling infrastructure. Quite another to borrow money to fund a bloated, inept, patronage-driven state.
We have to stabilize and sell off non-strategic, loss-making SOEs such as SAA and improve efficiency at the rest, by employing fit for purpose managers and directors and holding them to account.
We need to reject outright any further investment in nuclear, split Eskom into separate power production and distribution entities, and promote independent, decentralized power production from a diversity of sources.
We need to invest in quality education and training, and we have to build a system and culture of on-the-job skilling through apprenticeships, internships and national service.
We need to relentlessly promote small businesses and make it easier for entrepreneurs to access credit and support. They need a more flexible labour market that enables rather than deters job creation.
We must bring data costs down.
We need land reform that gives real ownership in the form of title deeds, rather than uncertain tenancy.
We need stable, coherent mining policies that are rooted in real-world considerations such as the need to be globally competitive.
Once the economy is growing and investment is coming back in, we can reduce the tax burden on the middle class that has been so overburdened recently, and who are really struggling to make ends meet. This will improve revenue collection and further boost growth.
We need all these things and more. But if there is one silver bullet, it is to eject the moribund ANC and give South Africa a new beginning.
There is simply no other way to restore hope for our children’s future.
Regards
Mmusi Maimane
Tags: Mmusi Maimane
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