POST-BUDGET BRIEFING PAUL MASHATILE - Treasurer General
Our focus will be on the, efforts by the ANC government – working together with the rest of society – to drive the reconstruction and recovery of our economy.
Our starting point in pursuit of economic reconstruction and recovery is the need to form social compacts across society towards common goals.
The 54th National Conference, in NASREC, called for urgent action to bring together, government, the labour movement, business and communities in a social pact to accelerate economic growth and create jobs.
The President during the State of the Nation Address spoke at length about the need for a new social compact.
The President asserted that in order to address both our immediate economic crisis and to create conditions for long-lasting stability and development, our country needs a new consensus.
Accordingly, we are encouraged that social partners at NEDLAC – government, labour, business and communities – are working together to identify specific actions required to build such a consensus.
The President indicated that the social partners have given themselves 100 days to finalize the social compact.
For the social compact to work, there is a need to agree on the strategic choices that must be made.
We must also agree on the actions that must be prioritized, the trade-off that are required and the contributions that each social partner will make towards rebuilding our economy.
The consensus we need – which will form the basis of all our social compacts – is one that recognizes that the State must create an environment in which the private sector can invest and unleash the dynamism of the economy.
There were a lot of debate after the State of the Nation Address on the democratic government’s posture to private capital – and whether it is the state or the private sector that creates jobs.
We in the ANC have been very clear that we believe in a mixed economy.
This is an economy that will draw on the resources, strengths and capabilities of both the public and the private sectors.
We go on further to say in our Strategy and Tactics document that; our relationship with private capital is both complementary and contradictory.
This means we will work with private capital where possible and necessary, but we will confront private capital when for instance they continue to exploit workers and the poor.
Guided by the Freedom Charter, we are also firm in our belief that an economy must not exist for its own sake, but it must exist to serve the interests of the people as a whole.
The people must share in the country’s wealth.
We are encouraged, as the ANC, that the Budget presented by the Minister of Finance, Comrade Enoch Godongwana, Dr Masondo and the team, has gone a long way in creating an environment in which the private sector can invest and unleash the dynamism of our economy.
This they have done by adjusting corporate income tax.
They have also created scope for the private sector to create more jobs through adjusting the employment incentive scheme.
They have also introduced a bounce back scheme to assist Small and Medium Enterprises affected by the COVID-19 pandemic.
We are raising them to make the point that as the ANC we are serious about creating a conducive environment for the private sector to play an active part in the ongoing effort to re-build our economy.
Creating a conducive environment also includes addressing all the regulatory impediments to the growth and expansion of firms.
We must move with speed in replacing red-tape with smart tape.
We are encouraged that our government is proceeding with structural reforms focusing on network industries – energy generation, logistics, water and sanitation, telecommunications, as well as tourism and skills development.
Ultimately, the goal is to unlock the growth potential of our economy – through introducing and improving efficiencies in our network industries – so that we can create jobs and reduce poverty and inequality.
Aggressive investment in infrastructure must continue to be one of our priorities.
This is because infrastructure development is the bedrock of any thriving economy.
We urge government to act urgently to unlock all the blockages to the faster roll out of infrastructure.
This includes attracting private sector skills and expertise in the delivery of especially social infrastructure.
We welcome the innovative mechanisms currently being explored to crowd-in private capital to fast track and massify the delivery of infrastructure, including social infrastructure.
In the spirit of social compacting, we are confident that the private sector will respond positively to these developments.
At all times we must remember that none of us, acting alone, can respond comprehensively to the enormity of the economic and social challenges we face.
We also expect to work with the private sector in our agenda to boost local production, local content and local procurement.
We are aware that the Preferential Public Procurement Framework Bill is being refined to give appropriate expression to our firm intent to drive localization and strengthen local manufacturing.
We urge government to be more aggressive in implementing and resourcing industrial policy, so that we can support and strengthen strategic economic sector.
These are sector that have the greatest potential to drive inclusive growth and create much needed jobs.
We also call for policy consistency, especially in relation to monetary and fiscal policy.
The two should be complementary and not work against each other.
Our focus must also be on dealing decisively with crime, lawlessness, theft and destruction of public property.
We must be form in dealing with mining and construction mafias that hinder the delivery of strategic investment projects.
We must continue the fight against corruption both in the private and public sector.
A capable, developmental state able to work with a dynamic, agile private sector is also a necessary element in efforts to grow an inclusive economy.
Ladies and Gentlemen the social compact we are building should also ensure the creation of an environment in which South Africans can live a better life and unleash the energy of their capabilities.
In this regard we applaud our government’s commitment to extending income support to those structurally excluded from the economy.
Also encouraging is the expansion of public employment programmes that, in our view, must be linked to a clear exit strategy.
Such a strategy must seek to equip, especially young people, with skills that will help them transition into gainful employment.
All of this is consistent with our understanding no one should be left behind in the new economy we are building.