Three key interventions to achieve economic justice

25 February 2020

The IFP is cautiously optimistic that Finance Minister, Tito Mboweni, will be able to deliver a budget that will have to provide certainty to all South Africans. The 2020 National Budget should assure the employed of job security, the unemployed of job opportunities and investors of a conducive environment to do business.

We recognise that the State of the Nation Address’s (SONA) lengthy wish-list which was read-out by President Cyril Ramaphosa will indeed be a challenge for the Finance Minister in finding the required funds to stimulate growth in the key sectors outlined in SONA.

We face four more years of less than 1% growth under the current administration and manner in which we are dealing with the little we have in the fiscus, is the only solution right now to actually turn things around and provide more money to the state to improve service delivery.

The IFP firmly believes that through bold, decisive and simple action, we can reap the benefits of a growing economy in which Rands do not leave the pockets of our people, but that their pockets will overflow in abundance.

We can do this by swiftly implementing the following three key measures to turn our economy around and to speak truth to power in alleviating the ills we face as a country:

1. REAL ECONOMIC TRANSFORMATION THROUGH GROWTH OF SMMEs AND LOCAL ECONOMY

Growing and developing the local economy is the key to unlocking economic prosperity for all. For Small, Micro and Medium Enterprises (SMMEs) to grow, government needs to place greater focus on its potential and assist wherever possible.

It is imperative that Minister Mboweni provide and outline key steps in addressing the risks of climate change and severe drought which affects the agricultural sector through outlining steps which will assist and protect local, subsistence and commercial farmers, to provide the assurance of food security to the country.

On tax, we expect the Minister to tell us exactly how he will expand the tax revenue collection net through providing measures in kick-starting the formalisation of the informal economy which continues to circulate billions of Rands without the state benefitting.

In order to enhance and grow the informal, rural and township economy we must organise the sector by providing security and clamping down on the trading of illicit goods and manufactured products, which hurt the local industry and furthermore evades taxation.

In clamping down on the illicit trade and sale of goods and improving the collection of revenue, in particularly that of tobacco goods, which contribute to a number of health risks and burdens the state health care facilities.

The illicit tobacco industry must be dealt with once and for all because it is cheating the state out of billions of Rands in taxes while those who comply legally must suffer tax increases.

2. PARTIALLY PRIVATISING OUR SOEs IS A PROCESS TOWARDS REAL ECONOMIC JUSTICE

The IFP believes that there is no other alternative but to phase out the control of the state, in terms of partially privatising State Owned Entities (SOEs) and implement stricter measures in which we are to appoint the best of what we have to offer in skills, expertise and knowledge in running effective, efficient and profit-making SOEs.

Indeed, we must deal decisively in holding government officials, politicians, and board members of SOEs, to account, in particularly, Chairpersons of the various Boards who continue to underperform, over-promise in very lengthy “strategic” documents, yet the entities remain unprofitable and lack clear skills, administrative and financial management expertise.

We should not think of privatisation as a swearword. If we are to phase in stages of privatisation in a carefully managed, well-balanced, moderate and market-friendly manner, which still leaves room for the intervention of government where necessary, as the custodian of the hopes, dreams and fears of all our people in ensuring our developmental goals and targets are met, we can successfully turn around our ailing SOEs.

We must manage the sale of our strategic assets to the private sector, in which we turn profits at our SOEs for the benefit of the many, not the few. It will increase our current investment portfolio and provide the necessary skills and create jobs we desperately need.

3. TRUST, INTEGRITY AND JUSTICE: TO RESTORE PUBLIC & INVESTOR CONFIDENCE

The Minister must pronounce very strongly on how he intends to deal with maladministration, corruption and fruitless, unauthorised and wasteful expenditure in all spheres of government, in order to restore trust in government and grow investor confidence.

In doing so it will allay current fears that the state is unable to manage its own sovereign wealth fund, or any entity and government department effectively.

The real effects of low levels of integrity, unethical leadership and corruption in all spheres of government continues to be the biggest enemy of our economic progress.

The rot of corruption is crippling our local and district municipalities and cities. Politicians and government officials must be placed behind bars if they are to be found in contravening the law.

In light of the above, we need to ensure that any official responsible for underperformance should not be allowed to benefit in receiving “performance” bonuses, particularly all directors and senior management. We should not be praising fish for swimming. Officials should pull up their sleeves and ensure that entities and government departments deliver on their mandate.

In the absence of any strong pronouncements on action in this regard we will not move forward.

CONCLUSION

We do not need more plans, we need implementation and we need the Executive to walk its talk on getting things done and correcting the basics whilst simultaneously addressing our social issues and improving the lives and livelihoods of all South Africans.

We all want to live in a South Africa that is indeed alive with possibility, that is prosperous and successful.

We await the outcome of Minister Mboweni’s address and remain optimistic that the Minister will do what is right to steer our economy out of the red and consider the implementation of our three key solutions.

Issued by Inkosi Mzamo Buthelezi, IFP Deputy President and Spokesperson on Finance, 25 February 2020