Now is the time to let the private sector loose

17 August 2020

The restrictions imposed on economic activity by the government provided the final proof of the importance of the private sector and the pre-eminent part it plays in the welfare of everyone.

Through the wages and salary it pays, through the tax it remits on which the existence of every State entity depends, from the salaries of civil servants, the pay and perks of politicians to the welfare grants that so many people depend on, the private sector is the source without which none of us can survive.

The Minister of Finance must be sighing with relief that the Treasury will again receive taxes from the liquor and tobacco industry. The last 132 days of lockdown have lost it an estimated R12 billion and put at risk or lost entirely 120 000 jobs.

But there is another crucial characteristic of a vibrant private sector that will be vital in the recovery that must now begin – the speed with which it can react to customer needs. There is no doubt that it will respond, but it will do so far faster than before if the regulatory burden, the unnecessary red-tape, the official tardiness and all other impediments on business, are reduced.

The best advice for government is for it to let the private sector loose. If it does so, the recovery will be swift. If it insists on treating profit with its usual outdated suspicion, it will not.

Issued by Dean Le Grange, Media and Digital Co-ordinator, Cape Chamber of Commerce and Industry, 17 August 2020