Government must ensure environment is good for job creation: Treasury DG

24 February 2022 - 16:45
By Ernest Mabuza
Dondo Mogajane, the director-general of the National Treasury. File photo.
Image: Esa Alexander/Sunday Times Dondo Mogajane, the director-general of the National Treasury. File photo.

National Treasury director-general Dondo Mogajane says the government’s task is to ensure a conducive environment for job creation.

Mogajane was speaking on Eusebius McKaiser’s budget 2022 “Is Treasury on the Money?” podcast on Thursday.

McKaiser asked Mogajane how do numbers from Wednesday’s budget translate into job creation and dealing with structural problems in the economy.

Mogajane replied, emphasising what President Cyril Ramaphosa said last month, that government is not about the creation of jobs.

“Government is about creating a conducive environment to create jobs.”

There were public employment opportunities, but there were 15-million South Africans without a job.

“It is those ones we cannot provide. We have to make an environment conducive for that to happen.

“Ease of doing business is one. It is the hallmark of structural reform we have to embark on, including other critical reforms to unlock the potential of the economy.”

The incentives included reducing corporate income tax for businesses to enable them to expand their businesses.

“You then create opportunities for more people to be employed.

“Let us create a good environment for businesses to flourish.”

This would allow the economy to expand.

McKaiser asked Mogajane to comment on Cosatu’s assessment of the budget that a mass employment programme and stimulus plan are missing and simply reducing debt on its own will not grow the economy or create jobs.

Mogajane said the Treasury had a balancing act to strike. The government was paying billions of rand to service debt and this was rising.

“What does a 100% debt to GDP mean, what does it mean for our debt? I should be worried as a public servant in Treasury when I am paying R303bn towards debt service costs and it is rising and the budget for peace and security is R220bn and the budget for health is less than R300bn.”

If the government kept debt at manageable levels it would be able to build more schools and spend more on safety, health and education.

“I cannot do that when spending more on debt service costs.”

Mogajane said he must be comfortable reducing debt costs so that the government would pay less interest on debt.

Economist Thabi Leoka said the budget was a fair balancing act which was conscious of increasing debt and aware of the affect of Covid-19 on South Africans.

She said the National Treasury did enough for this year, but she was worried about the next few years as the economy is not forecast to grow much.