The rand’s recent downgrade to junk status by S&P, brought on by rampant looting of the state, will hurt the poorest South Africans the most.
South Africa needs to make some smart changes to reverse the spiralling poverty and debt trap.
The DA has proposed some critical policy interventions that can be implemented fairly rapidly at no great cost to National Treasury.
Firstly there has to be radically reformation of our State Owned Enterprises.
They are haemorrhaging public money and delivering dismal services at exorbitant prices.
Eskom is the highest priority. The only reason for the high and growing price of electricity from a company that is teetering on the edge of collapse, threatening our whole economy, is rank failure of leadership.
Eskom has been a bottomless pit into which we’ve thrown so much money that our social welfare system is now at risk.
Secondly, the labour market must be reformed, so that young people emerging from our dysfunctional schooling system can find employment.
Small business needs maximum flexibility if they are to grow, employ as many people as possible, and compete with big businesses.
Thirdly, we need to simplify and reform the empowerment system. The current system has been used as a mechanism for elite re-enrichment and corruption.
It imposes a heavy regulatory burden on businesses and raises the cost and lowers the quantity of service delivery to the poor.
“We want companies’ greatest contribution to be to society in general, not just to the elite. That’s why we need a Jobs and Justice Fund, an investment fund that will incentivise companies to help fund new entrants into key sectors,” said Mmusi Maimane, leader of the DA.
South Africa has to reduce corporate taxes, abolish exchange controls, remove trade barriers and establish export processing zones to signal to investors that South Africa is open for business.
Wealth and estate taxes are much more effective ways to redistribute wealth, because they do not chase away investors.
Then we must issue visas on arrival to tourists. Tourism is a massive potential source of growth and jobs, as well as foreign exchange.
We must fling our doors and skies open to the world’s tourists.
Lastly, we must appoint the best prosecutor to head the NPA – with a constitutional amendment to follow later, that removes the President’s exclusive power to appoint.
Corruption is destroying our nation and we need to signal a zero tolerance attitude henceforth.
“Without doubt, we need to reduce the size of our state, and make it much more efficient. Our public sector wage bill is entirely unsustainable. And we must fix our education system. These will take time, but they must be done,” added Maimane.