Home South Africa News ECONOMY RECOVERY: CUT WAGE BILL, GET WEALTH TAX, SELL SOES

ECONOMY RECOVERY: CUT WAGE BILL, GET WEALTH TAX, SELL SOES

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President Cyril Ramaphosa

Experts warn ‘freebie’ mindset must choose SA to lift its head.

For South Africa to possess a future and for the economy to “see heaven” within the coming years, those curious about rebuilding the country’s economy are best-suited for the work , rather than those thinking “money grows on trees”, analysts say.

South Africa’s economy saw more relief in the week as President Cyril Ramaphosa announced that the country would be moving to lockdown Level 1 in the dark on Monday. This included the opening of borders for leisure and business purposes, permitting venues to host guests at a 50% capacity and an extension of the curfew.

Ramaphosa said rebuilding the economy, creating jobs and restoring growth was vital, with Cabinet building and finalising an economic reconstruction and recovery plan next week.

But, sideline people with “unsustainable expectations” who require money to be spent as this led to corruption, said economics professor Bonke Dumisa.

“The department of finance is surrounded by people that don’t want to simply accept that cash doesn’t grow on trees.”

Another issue, said professor of state at the University of the Western Cape Patrick Bond, was the “conservative mindset” at Treasury and therefore the Federal Reserve Bank which needed to be in line with the remainder of the planet .

“Both the state’s fiscal and monetary stimulus packages are crippled by that. a serious shift in thinking is required to reflect how state spending can boost an economy whose capitalists are on investment strike and where poverty has soared, given 4.5 million job losses thanks to the Covid-19 lockdown.”

How government can revive the economy:

Prioritise scrapping the general public sector wage bill, immediately introduce wealth tax, sell stateowned enterprises (SOEs) which are a “headache” and alter

South Africa’s “freebie” mindset if the country was “going to ascertain heaven” within the next few years, said analysts.

The scrapping or lowering on the highly criticised public sector wage bill was an honest place to start out to revive the economy because it was the country’s “downfall”, said Dumisa.

“Trade unionists are crying, instead of asking how they will help. they’re still talking about salary increases and zip on lowering on the wage bill.”

Introduce a wealth tax, Bond added, with decisive steps to retain SA’s economic sovereignty – like prosecutions of corporate thieves – and thereby halt illicit cash outflows, tax dodging schemes, and tender fraud.

Dumisa wanted to ascertain stateowned enterprises privatised or sold off. “The headaches must go – even SAA. We cannot keep using tens of billions of rands to rescue them.

“If we would like to ascertain heaven within the next two to 3 years, we must change the mindset of South Africans.”

The headaches must go – even SAA