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Johannesburg - The role of the state in the economy needs to be reassessed in the light of the new growth path economic strategy, Business Unity SA (Busa) said on Thursday.
"The key question is what should the government do? What should the government not do? And what should the government ensure should be done?" said Raymond Parsons, deputy CEO of Busa, at a media briefing on the new growth path document.
The government's new growth path was unveiled by Economic Development Minister Ebrahim Patel last week.
The state does not need to do everything itself, but rather ensure that it was done, Parsons said.
He said one of South Africa's priorities should be "getting the delivery state in place before embarking too far on the developmental state".
One of Busa's concerns about the government's document was that it still believed strongly "in the state's ability to both make an ongoing accurate diagnosis and to offer maximum efficiency in key areas of the economy".
It also differed with the document's implication that "the private sector is not really acknowledged as the real driver of the economic process".
Parsons said the new growth path's proposed creation of a state mining corporation and a state-owned bank did not show confidence in the private sector.
Busa suggested that the government first fix the existing parastatals.
"Don't create new structures if the existing structures could be made to work better," Parsons said.
Busa CEO Jerry Vilakazi said the state had a major role to play, but it should focus on creating an enabling environment rather than intervening.
Tough choices
The new economic strategy must lead to implementation if it is to have any value, Parsons said.
"If talking could be factored into our GDP (gross domestic product), South Africa would be the fastest-growing economy in the world," he said.
The new growth path was the latest in a series of programmes the government had presented over the past 16 years.
These included the reconstruction and development programme of 1994, the growth and redistribution strategy of 1996, and the "Harvard" economists' study of 2007.
"We've been here before," said Parsons.
Parsons said to create a job-rich economy the top priorities were improving the educational system, skills development and public sector delivery.
All these needed to happen in tandem, taking account of the state’s capacity.
To achieve these priorities, Busa said tough choices needed to be made.
These included sticking to a disciplined macroeconomic approach - rather than giving in to inflationary temporary job boosting - and ensuring the state was delivering.
More skills and support should be put into the education system rather than more money, and business should be more involved in skills development.
It also included re-engineering state-owned enterprises and taking a bold approach to unlock entrepreneurial energy.
Parsons said Busa largely agreed with the frameworks created by the new growth path, such as getting rid of red tape, linking remuneration to productivity and promoting small business.
"The key question is what should the government do? What should the government not do? And what should the government ensure should be done?" said Raymond Parsons, deputy CEO of Busa, at a media briefing on the new growth path document.
The government's new growth path was unveiled by Economic Development Minister Ebrahim Patel last week.
The state does not need to do everything itself, but rather ensure that it was done, Parsons said.
He said one of South Africa's priorities should be "getting the delivery state in place before embarking too far on the developmental state".
One of Busa's concerns about the government's document was that it still believed strongly "in the state's ability to both make an ongoing accurate diagnosis and to offer maximum efficiency in key areas of the economy".
It also differed with the document's implication that "the private sector is not really acknowledged as the real driver of the economic process".
Parsons said the new growth path's proposed creation of a state mining corporation and a state-owned bank did not show confidence in the private sector.
Busa suggested that the government first fix the existing parastatals.
"Don't create new structures if the existing structures could be made to work better," Parsons said.
Busa CEO Jerry Vilakazi said the state had a major role to play, but it should focus on creating an enabling environment rather than intervening.
Tough choices
The new economic strategy must lead to implementation if it is to have any value, Parsons said.
"If talking could be factored into our GDP (gross domestic product), South Africa would be the fastest-growing economy in the world," he said.
The new growth path was the latest in a series of programmes the government had presented over the past 16 years.
These included the reconstruction and development programme of 1994, the growth and redistribution strategy of 1996, and the "Harvard" economists' study of 2007.
"We've been here before," said Parsons.
Parsons said to create a job-rich economy the top priorities were improving the educational system, skills development and public sector delivery.
All these needed to happen in tandem, taking account of the state’s capacity.
To achieve these priorities, Busa said tough choices needed to be made.
These included sticking to a disciplined macroeconomic approach - rather than giving in to inflationary temporary job boosting - and ensuring the state was delivering.
More skills and support should be put into the education system rather than more money, and business should be more involved in skills development.
It also included re-engineering state-owned enterprises and taking a bold approach to unlock entrepreneurial energy.
Parsons said Busa largely agreed with the frameworks created by the new growth path, such as getting rid of red tape, linking remuneration to productivity and promoting small business.
