WHAT VALUE FROM R5-MILLION SPENT ON PLANE HIRE TO JAPAN?

Congress of the People would like to believe that South Africa is going to get real and immediate value from the government spending R5-million to fly Deputy President Cyril Ramaphosa to Japan.

Japan has always been very careful not to overburden taxpayers. Its rationale is quite simple.  Raise growth, not taxes.

When economic growth is realised, tax revenues naturally increase. It is that easy and as painless as possible for taxpayers. To achieve economic growth, the Japanese government kept taxes consistently low over a long period. That also makes a lot of sense. A tax policy that is not extremely burdensome enhances entrepreneurial activities, stimulates spending, encourages savings and promotes personal and corporate investment.

Not to kill the goose that lays the golden egg has worked wonders for Japan. The ruling party must take that lesson to heart.

Where consumption expenditure of government is kept tight and a favourable business climate is allowed to prevail, as has happened in Japan, it means that investable capital resources can freely go into manufacturing and infrastructure development. This the key lesson that the Deputy President and his government delegation should have learnt.

Tight spending on consumption by the Japanese government helped curb inflationary pressures for long periods. This stimulated capital investment. The Zuma administration needs to understand this and to reduce the size of its burdensome and bloated cabinet and civil service.

The South African government must most certainly shelve any idea of increasing the tax burden of South Africans. It must put aside the report of the Davies Commission. The better approach is to remove regulatory impediments and to provide incentives for private investment in machinery and equipment. Our factories, hundreds of them, are standing empty. Each empty factory is a severe indictment on the government and its failing economic policies.

COPE supports a government programme that will allow every South African to get annual shares in the South African stock exchange. Marginalised individuals will receive proportionately more to even out the playing field. This is a better route than BBBEE. In our view, such an approach will be the most revolutionary way of transforming the economy

COPE waits to hear from government on how it will use the expensive Japan trip to invigorate the South African economy as expeditiously and expansively as possible.

Issued by, Dennis Bloem, COPE Spokesperson, 9 September 2015