Related Articles
Top Stories
May 27 2012 11:21
There's a price war raging between South Africa's cellphone networks after Cell C lowered the rates of its prepaid calls by more than 34%.
May 27 2012 13:09
The oversupply of golf estates has claimed another victim.
May 28 2012 07:53
The City of Cape Town has spent R175m running the Myciti bus service since the 2010 Soccer World Cup, compared to an income of R35m, a report says.
Cape Town - President Jacob Zuma?s plan to stave off the effects of the recession may place no short-term burden on the fiscus but other, longer-dated, plans have onerous economic implications.
In his maiden state of the nation address, Zuma stuck to the strategies already agreed to by business, labour and government at the National Economic Development and Labour Council (Nedlac).
For South Africa's poor, strategies include a pledge to create four million jobs over the next five years. This is double government's previous target. "The initial target of one million jobs has been achieved. The second phase of the programme aims to create about four million job opportunities by 2014," said Zuma.
That was the only new target in the speech.
No new budgets or allocations were announced and government will keep to the R787bn already budgeted to build social and economic infrastructure.
Economist Iraj Abedian said resisting the call to extend grants in this climate was "prudent".
Zuma also mentioned government would link existing grants to "economic activity" to eliminate dependency. This is an idea former finance minister Trevor Manuel lobbied for. However, state grants are at present only offered to those unable to participate in economic activity, for instance children and disabled persons.
While Zuma has been under significant pressure to bow to expansionary and protectionist demands from the ANC's trade union alliance partner Cosatu, he was careful to point out that although the recession would not derail government's focus on the poor, every cent had to be spent wisely and without waste.
Abedian said although the speech struck a balance between labour and business-friendly concessions, the medium-term promise of implementing the national health insurance scheme is a concern. Critics have warned that such a system may be expensive and have unintended economic consequences.
Zuma also tried to reset the tone for public discourse, calling for a shift from a culture of entitlement to one of responsibility.
He warned that tough action would be taken against civil servants, especially teachers, who did not pull their weight.
- Fin24.com