South Africa is in big trouble. The state coffers have been emptied out, the economy is in a recession, unemployment is a crisis and the need for services and social relief is on the rise. We have fallen over the edge and now find ourselves in a dark tunnel with very little hope of light at the end.
There is no need to ponder or discuss why the country is in this crisis. It is an accomplished fact that the current fiscal and economic crises were not caused by the Covid-19 pandemic. It no doubt made matters worse, but the country was already in serious trouble long before Covid-19 arrived.
What is important now is to focus on what needs to be done to overcome this crisis. A paradigm shift is needed. Social needs are increasing and the tax base is shrinking fast due to the dire economic circumstances.
The solution is lowering taxes. The economy must be stimulated so that the tax base can expand. Instead of imposing even higher taxes on taxpayers, the tax base must be broadened through tax relief and other incentives.
Rising rates and taxes and falling service delivery deter investors and hamper economic growth. Another solution is to properly manage expenses and the growth of the economy so as to increase revenue.
The government must earn taxes and not just collect them. There has to be proper service delivery. There must be value for the tax money that that government spends. The exploitation of the government by contractors and businesses owned by cadres of the ruling party must be brought to an end.
Any unnecessary pressure on the government must be removed. An example is the Road Accident Fund (RAF), which must be abolished. Make third-party insurance compulsory for all motor vehicle owners. In that way, only the relevant owner will have to pay for third-party claims and not all South Africans.
Policy certainty is needed to attract more investments to South Africa. We need clarity, once and for all, about things like prescribed assets and reckless statements that scare off investors must be stopped.
The private sector is not the enemy. The government's clichéd rhetoric of scapegoat politics to cover up its own shortcomings, which reach as far as the private sector, is unacceptable. The private sector is the biggest creator of jobs in the country – a country facing a serious unemployment crisis.
We have a Department of Labour with a mandate that was expanded to include job creation, but it does not seem to have the means nor the will to do so. Knee-haltering the private sector with prescriptive labour legislation and a dismissive attitude will only make the unemployment problem and consequent socio-economic problems even worse.
Free economic zones with limited legislation and significant incentives regarding taxes and levies will attract more investments and create more jobs.
It makes absolutely no sense to take money away from municipal infrastructure allocations, water infrastructure allocations, education, police and health and to give it to a failed airline.
How much more of the much-needed tax money will be thrown down this bottomless pit of failed state-owned entities before the ANC government learns its lesson?
Ideology must not be put before the interests of the people of South Africa. The people of South Africa are starting to realise this and will punish the ANC for it at the polls.
