Finance Minister Enoch Godongwana presented a gloomy mid-term budget on Wednesday. Public debt has gone through the roof. The finance minister said the country’s public debt will reach a frightening R6 trillion next year. For every R1 the government collects, 22 cents goes towards servicing debt. It did not give the people of the country much hope for the future nor did it excite the markets. In fact, the Rand declined on the grim forecast for the country’s economy.
The Gross domestic product (GDP) forecast is expected to be a meagre 1,1% which is not good news for the country’s soaring unemployment problem. Without economic growth the country cannot create jobs to reduce the unemployment rate. Yet Godongwana was optimistic that he would arrest fiscal deterioration in the next few months.
How he is going to do it remains a mystery. How is he going to tell his colleagues in government, ‘Look, comrades, we must pull up our socks. We cannot live like the Americans. They cannot worry about their mountain of debt. They lead such a fast, reckless life that living in debt has become part of their culture. We must stop aping the glitzy, superficial American way of life and live a sensible, modest way of life which is within our means. For a start we must practice fiscal discipline. We must reduce the enormous public service wage bill. It’s become unsustainable.’
‘How about we all show some leadership qualities and say we don’t want a pay increase next year? And what if we say we don’t want those big, luxury limousines and SUV’s that race along the freeway with their blue lights on? Let’s shock the country and ride a bicycle once to parliament! Would we become smaller? Would we depreciate in value? In fact, we would become bigger and better human beings. It would be such a caring and loyal thing to do. It would get rid of so much fat and make us and the country healthier.’
We must also put an end to bailing out the failing SOE. They are devouring our economy and are a big burden to the hard working tax payers. If they were private companies they would have been declared bankrupt and made to close down. We must, likewise, do the same with the unproductive SOE’s. We must take a pragmatic, business-like approach towards the leaking state-owned enterprises (SOE) and let them sink to the bottom.’
If Godongwana can halt the runaway debt train, he will go down in history as a great finance minister who saved South Africa from a disastrous economic crash.
T MARKANDAN | Durban
The views expressed here are not necessarily those of Independent Media or IOL.
Daily News