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Zuma's jobs plans in doubt

Feb 11 2011 08:24 Sapa

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Johannesburg - There were no surprises in President Jacob Zuma State of the Nation address on Thursday but it would be the future detail and delivery that would count, economists said.

"The tricky bit is delivery... this is the difficult part but it is so crucial," said Dennis Dykes, chief economist at Nedbank.

"There was a lot in there which was fairly well known, such as the referrals to the New Growth Path... that it is the year of job creation has been well publicised."

However, it was how these jobs are going to created that was of concern.

"There was not a lot on true facilitation for business to create these jobs. I would have liked to see a much more predictable environment for business to operate in and create the enabling environment for them."

Investec Group Economist, Kgotso Radira, agreed that the address emphasised the important issue of job creation.

"The disadvantage was it lacked the details."

He gave as an example the R20bn Zuma said would be set aside for tax allowances or tax breaks to promote investments, expansions and upgrades in the manufacturing sector.

"Who's going to administer it? SARS or the Treasury? Last year he announced a R1 billion fund to help people access mortgages, who could not go through the formal market, but there has been little success on that.

"We will have to wait for the details and see whether these will work."

He had similar concerns about the New Growth Path.

"What we wanted to know is how in the agricultural sector they are going to create jobs? What is first step? There is focus on the end product, instead of on the starting spade work."

Dykes also had concerns about the tax breaks.

"The better thing is to have an overall enabling environment where business feels confident without being subsidised."

Zuma announced that close to 15 million South Africans were receiving social grants but said they would "be linked to economic activity and community development, to enable short-term beneficiaries to become self-supporting in the long run"

Dykes said this was a "commendable sentiment" that welfare should be linked to seeing people stand on their own feet, but he would like to see the detail.
state of the nation  |  jobs  |  politics  |  parliament 2011



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