Treasury defends its new growth plan after attack from Telkom CEO | Fin24
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Treasury defends its new growth plan after attack from Telkom CEO

Sep 02 2019 19:55
Lameez Omarjee, Fin24

Given the detailed reforms proposed, the new economic growth discussion document would naturally spark debate and reaction as is being seen, acting head of economic policy Duncan Pieterse told Fin24.

He was reacting to sharp criticism from Telkom's CEO Sipho Maseko, who called the plan chaotic and incoherent in a Sunday Times opinion piece.

Last week, Treasury released a surprise economic policy discussion paper which seeks to boost growth to 3% and create over one million jobs.

The 77-page document included proposals to reintroduce a law to cut down on red tape, to simplify onerous visa regulations, and for Eskom to consider selling coal-fired power stations.

Maseko was not impressed with the telecommunications proposals, which included the unbundling of the local loop, which would force Telkom to give competitors access to the last-mile copper lines that connect business and homes to the telephone network, as well as the auction of broadband spectrum.

Maseko criticised Treasury for dealing with what he said were outdated concepts, especially in the ICT sector. "[This] suggests the authors are not at all familiar with the current state of the ICT market or the technologies driving it," he wrote.

While Treasury has endeavoured to update as new policy decisions are taken, it can be quite tricky to do so, Pieterse said.

Maseko also said the paper was not aligned to the department of communications' gazetted policy direction for spectrum and the licencing of the wholesale open access network.

To this Pieterse responded that the discussion paper does not specifically make reference to the policy directive but is consistent with what the policy directive says. Treasury's discussion paper was released about a month after the gazette.

Treasury has been working on the paper since 2018, and has included input from academics and policymakers. Some of its ideas can be seen in the medium term budget policy statement and the national budget, Pieterse said.

"The document has been evolving over time," he explained. "There is a three-fold purpose to the document. It brings together everything we know about the micro-economic reform agenda, it brings a coherent set of reforms in one document and undertakes an exercise to quantify the impact of the reforms," he said.

'A lot of submissions'

Public submissions on the economic policy paper are critical and will be taken into account by Treasury, said Pieterse.

The public have until September 15 to submit comment.

"Public comment is a critical part of the process in the discussion paper. The idea is to take comments into account and process the submissions," Pieterse told Fin24.

He added that there have been a lot of submissions so far and the discussion paper will be updated in light of the submissions. The updated paper will be tested with academics and other policymakers before a final version will be republished, he told Fin24.

Finance Minister Tito Mboweni will then outline the process that follows.

Treasury envisions having the public submission process concluded before the medium-term budget policy statement in late October.

sa economy  |  treasury  |  budget


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