Along with the rest of South Africa , the Democratic Alliance (DA) notes with enormous concern the contraction of our economy by 6.4 percent. This not only confirms that our economy is now in a full blown recession, but also that the ANC government has not taken the necessary steps to ensure that we survive the worst effects of the global economic crisis.

In light of this larger than expected contraction of the economy it is now more clear than ever that government, labour and business need to work together to find solutions to the economy's woes. These include lowering wage expectations, targeted assistance to certain labour-intensive industries to ensure that we retain much-needed jobs, and government needs to unpick the numerous constraints that stifle business productivity, expansion and job creation.

We now hope that the monetary policy committee will decide to cut interest rates by at least 100 basis points as a much needed measure to stimulate domestic demand, and get the economy going again.

The DA has long proposed that under prevailing harsh economic conditions, the entrepreneurial spirit must be stimulated through getting appropriately skilled people into the workforce through a wage subsidy, opportunity vouchers, a simplified tax regime and less onerous business regulations.

Green shoots of economic recovery will start to appear in the future, we just don't know when. Decisions taken now will determine the size of the economic up-tick, when it inevitably comes.

Statement issued by Dr Dion George, MP, Democratic Alliance shadow minister of finance, May 26 2009

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