Chairperson, Minister, we congratulate you on your department's achievements, but we also wish to present a warning. I'm sure that you are aware of the drama currently playing itself out in Europe and the renewed systemic stresses brought to bear on the European Union. France's anti-EU election rhetoric and the fall of the Dutch government are clear indications that the global recession and its fallout still haunt the world. This includes South Africa, as the EU is our dominant trading partner. This also brings to the fore our own fiscal policies and their appropriateness, in light of a possible implosion of the international house of cards due to systemic contagion.
The question that we - and especially government - have to sincerely ask ourselves is if we are ready to weather any further financial storms. If we analyse South Africa's current fiscal status and policies, it is becoming eminently clear that the ANC government has already progressed well in writing a narrative that can be classified as approximating the genre of the Greek tragedy.
Last year, government economic activity accounted for the creation of most jobs, with the private sector lagging far behind. Government debt is escalating at alarming levels. Government is increasingly participating in the free market and competing with private business such as mining. In the meantime, private industry is struggling on and government is bowing to the pressure of the unions to increase the salaries of state employees above the inflation rate.
Die Keynesiese beleid van teensikliese infrastruktuurbesteding deur die regering in tye van ekonomiese nood is duidelik geinspireer deur die advies van ekonome soos Joseph Stiglitz. Daar is weliswaar meriete in teensikliese noodmaatrels soos hierdie. Suid-Afrika het die nuwe infrastruktuur wat gebou gaan word, nodig, maar dan moet die program op 'n gebalanseerde wyse toegepas word.
Hierdie program moet eerder as uiteindelike uitkoms voorsiening maak vir 'n vrye mark wat veral klein besighede bevry van verswarende administrasie en belasting, sodat die ekonomie kan groei en werk geskep kan word. (Translation of Afrikaans paragraphs follows.)
[The Keynesian policy of countercyclical infrastructure spending by the government in times of economic need is clearly inspired by the advice of economists such as Joseph Stiglitz. There is indeed merit in countercyclical emergency measures like these. South Africa does need the new infrastructure that will be built, but the program has to be implemented through a balanced approach.
This program should ultimately rather make provision for a free market that, in particular, frees small businesses, from cumbersome administration and tax, so that the economy can grow and jobs can be created.] Minister, what South Africa needs, together with the medicine of public works stimulus, is a good dose of libertarian logic, especially for small businesses, which should be free of the ties of racial discrimination, high taxes and burdensome red tape.
Your department's aim is to promote economic development through participatory, coherent and co-ordinated economic policy and planning for the benefit of all South Africans. As such it is incumbent upon this department to ensure that all other departments are co-ordinated to achieve this result.
Therefore we implore you to look at the tax base that is being eroded at the moment. If the tax base continues to be eroded, as is happening at the moment, we will be stuck with a Ponzi scheme in South Africa that will eventually fall apart like a house of cards, and we will not see a very bright future for ourselves.
The Financial Times recently had the following to say about a member country of the EU:
The French know that their cherished social model has been built upon an unsustainable mountain of debt.
We are saying that many South Africans think that we are moving in the same direction. Therefore, whatever you do, support small business creation, support entrepreneurs without discrimination, and thus ensure growth and job creation. Thank you.