20 February 2019

STATEMENT BY PATRICIA DE LILLE, GOOD LEADER, ON

THE BUDGET SPEECH SLOW GROWTH, FINANCIALLY DEPENDENT SOEs & UNPRODUCTIVE STATE EXPENDITURE IS THE BITTER “ALOE” LEAF SOUTH AFRICAN’S MUST CHEW AS THE FRUITS OF LOOTING AND FINANCIAL RECKLESSNESS TAKES THEIR TOLL.

The Minister of Finance produced a aloe plant at the start of his speech and warned South Africans that its medicinal powers come with a bitter and a sweet taste. Today, South African’s get to chew on a bitter aloe leaf with more promises that the sweet taste will still come.

GOOD welcomes the Minister’s identification of the six priorities a government that plans to fix South Africa will need to act upon. These six priorities: achieving higher economic growth, increasing tax revenue, incurring expenditure we can afford, stabilising national debt, fixing our state owned enterprises and managing the public sector are already identified as part of GOOD’s “Plan to Fix South Africa (#FIXSA)”. Following through with prudent and predictable action steps is what counts.

Less talk and more action is needed. This will go a long way to achieving the financial stability we need in order to improve the quality of life of the millions of South Africans who are trapped in a vicious cycle of poverty and unemployment. Those who are trapped in unemployment and poverty must be our priority.

The face of poverty and unemployment is increasingly black and female. And members of those households are more likely to be trapped by inter-generational poverty – meaning it is increasingly impossible to escape. Increasing state pensions by R80 per month and the child care grant by R20 per month is increasing these social provisions at amounts slightly below average inflation for the past year.

This makes our state pensioners and child-care givers increasingly poorer. Our efforts should be to lift those who are dependent on the state out of poverty not make them increasingly worse off in real terms. After 25 years of democracy we have a divergence between our rapidly changing economy and our skills set. With massive youth unemployment and increasingly fewer prospects of jobs.

This is a massive failure of our government’s incoherent and uncertain economic growth strategy and a massive failure of our education system. The Minister mentioned the so-called “4 th industrial revolution”. The digital economy and increasing automation will reduce job security and job availability.

Under this ANC government it will be increasingly more difficult for a young unemployed South African to find a job. It is about time that South Africa starts to reimagine its social grant suite and to look to introducing a universal income grant.

We could fund a universal income grant, which would alleviate the social and economic trauma of rampant unemployment and inhumane hunger, with savings made from eliminating the looting. A government that is committed to eliminating rampant theft and corruption is capable of implementing a universal, or basic income grant, incrementally. South Africa has the resources to do this.

I welcome the Minister’s acknowledgment of the urbanisation trend in South Africa. Identifying the future of South Africa is urban is one thing. Preparing for that future is our duty and the ANC has failed to grasp that you cannot talk about vertical development and think you have dealt with urbanisation. Cities and towns need the powers and the resources to plan and build for that future.

Allocating 9% of the budget to local government demonstrates that the ANC doesn’t understand the resources pressures faced by the sphere of government where people are living. GOOD has proposed to turn our government on its head and devolve the powers cities and towns need to prepare for urban growth and expansion.

Thankfully the Minister seems to have ignored the DA’s proposal to increase business and corporate taxes in order to fund free higher education. When an economy is growing at less than 1% per annum it is irresponsible to plan to extract more revenue out of the active economy that is already under pressure.

We welcome the Minister’s allusion to breaking ESKOM”s monopoly and allowing competition in the electricity generation sector, especially in the form of renewables.

We also welcome the Minister’s proposal to cut government’s operating costs and the costs of the public service through natural attrition.

ENDS.

Good