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Mmusi Maimane's 6-point plan to fix SA economy - fast

Dec 04 2017 11:56
Eugenie du Preez

Cape Town - Democratic Alliance leader Mmusi Maimane believes that even in the country's current tightly constrained fiscal environment, there are policies which can be implemented immediately at no great cost to the fiscus which will turn the economy around.

In his regular email message Bokamoso, Maimane on Monday pointed out that while there is a need to address the size and efficiency of the state, the "entirely unsustainable" public sector wage bill and the dysfunctional education system, these measures will take time.

In the meantime, he proposes a six-point plan which covers the following:

1. State-owned entities

State-owned entities must be radically reformed, said Maimane. "They are haemorrhaging public money and delivering dismal services at exorbitant prices." On a case by case basis, the ones that are not strategic need to be sold, or turned around and then sold, or even just closed down "to stem the bleed".

As for the strategic ones, fit-for-purpose leadership needs to be appointed to ensure quality service delivery to the public at the best possible price. "The public just cannot keep funding these inefficient, costly companies which only benefit those who’ve captured them," said Maimane.

He sees Eskom as the highest priority. "The only reason for the high and growing price of electricity from a company that is teetering on the edge of collapse, threatening our whole economy, is rank failure of leadership. Eskom has been a bottomless pit into which we’ve thrown so much money that our social welfare system is now at risk," said Maimane.

2. Remove red tape

Secondly, the labour market must be reformed so that school leavers will be able to find jobs.

Also, small and medium enterprises "need maximum flexibility if they are to grow, employ as many people as possible, and compete with big businesses. They must not be held back by restrictive regulation and red tape," explained Maimane.

"The most important gap to close is not between those who earn high and low wages, but between those who have a job and those who don’t. Until the vast majority of the labour force actually has a job at all, we cannot afford regulation which actively prevents businesses from hiring people," said Maimane.

3. Empowerment

The third measure is to simplify and reform the empowerment system.

"The current system has been used as a mechanism for elite re-enrichment and corruption. It imposes a heavy regulatory burden on businesses and raises the cost and lowers the quantity of service delivery to the poor. We want companies’ greatest contribution to be to society in general, not just to the elite."

Maimane believes a "Jobs and Justice Fund, an investment fund that will incentivise companies to help fund new entrants into key sectors", will be the means of achieving this.

4. Make SA open for business

The fourth intervention on Maimane's list is to reduce corporate taxes, abolish exchange controls, remove trade barriers and establish export processing zones to signal to investors that South Africa is open for business.

"Wealth and estate taxes are much more effective ways to redistribute wealth, because they do not chase away investors," said Maimane.

5. Be tourism friendly

As the fifth reform measure, Maimane wants South Africa to welcome tourists with open arms by issuing visas on arrival.

"Tourism is a massive potential source of growth and jobs, as well as foreign exchange. We must fling our doors and skies open to the world’s tourists," said Maimane.

6. Zero tolerance for corruption

Finally, the best prosecutor must be appointed to head the National Prosecuting Authority, followed by a constitutional amendment removing the president’s exclusive power to appoint him or her.

"Corruption is destroying our nation and we need to signal a zero tolerance attitude henceforth," said Maimane.

The country's recent downgrade to junk status by S&P, brought on by rampant looting of the state, will hurt the poorest most. It is a clarion call to action, he said.

On November 24, global ratings agency S&P downgraded South Africa's long-term local currency rating to 'BB+', or junk, from 'BBB-' with a stable outlook, while Moody's placed the country on review to be downgraded. The day before Fitch kept SA's long-term foreign and local currency debt ratings at ‘BB+’, with a stable outlook.

Maimane said smart changes are needed to reverse the spiralling poverty and debt trap to enable "an open, high growth, high jobs economy".

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da  |  mmusi maimane  |  sa economy

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