DA's alternative budget: jobs, end load-shedding, debt reduction & protecting social wages

The DA presented its alternative budget that the party says is anchored in four core priorities and focuses on sustainable economic growth, ending load-shedding, achieving fiscal stability and supporting vulnerable South Africans.

The DA’s alternative budget was presented to journalists on Monday, two days before finance minister Enoch Godongwana tables this year’s budget in parliament, which sits at the Cape Town City Hall because of fire-damaged parliamentary buildings. 

The official opposition says the country’s economy is reeling under government-induced crises, and economic growth has been stunted by a burdensome regulatory environment, a deficient skills base and low labour market participation rates, a shrinking tax base, overburdened public and private infrastructure, diminishing capital formation and alarming crime rates.

The party says given the dire state of affairs, immediate, decisive action is imperative.

DA shadow minister for finance Dion George said the party’s alternative proposal presents an adjusted expenditure framework that reconfigures government spending to redirect the fiscal trajectory from the “current cliff” towards a more sustainable future. “The fiscal interventions we propose will enable our economy to grow and generate the jobs South Africans desperately need,” he said.

The four core policy priorities are:

• Establishing the foundations for sustainable economic growth that generates jobs;
• Revitalising the electricity sector to address power outages;
• Achieving fiscal stability through controlled government expenditure and debt reduction; and
• Supporting vulnerable South Africans by protecting social wages.

George said major reforms are required for South Africa to recover, and market-oriented reform starts by removing government-imposed barriers to growth.

“A government that is effective at serving the public, limits regulation and focuses on delivering essential services. This is what will create a dynamic enterprising economy, with market forces and individual freedom at the forefront,” said George.

South Africa’s fiscal environment remains characterised by unsustainable debt, persistent deficit spending, slow economic growth, stubbornly high unemployment, decelerating foreign and domestic private capital formation, declining GDP per capita, escalating living costs, food insecurity and political volatility, he said.

George added these circumstances are compounded by factors that fall under government purview such as uncertain private property rights, onerous labour market legislation, inadequate national and local governance, and a large and inefficient public sector dominated by dysfunctional monopolistic state-owned enterprises.

To establish resilience and stimulate economic growth, the DA’s alternative proposes “innovative solutions” to attract foreign capital, encourage domestic savings, revitalise state-owned entities, fix crumbling infrastructure, enhance labour market participation, bolster corruption busting institutions and facilitate the expansion of small and large business sectors.

On rolling blackouts, the DA reiterates its call for the unbundling of Eskom and the opening of the energy sector to Independent Power Producers (IPPs), and it says Eskom must prioritise the streamlining of its procurement processes in the interim while letting in private capacity to power a growing South Africa.

“By opening the energy sector, innovation and voluntary action will keep the lights on and the wheels of the economy moving towards the growth rate needed to address declining economic participation,” said Ashor Sarupen, George’s deputy.  

Sarupen said the DA’s proposal to ease the country's debt crisis is anchored by a framework of fiscal prudence that prioritises a primary budget surplus. “Our focus concurrently lays the foundation for economic expansion and job creation.”

On supporting vulnerable and poor South Africans, among the DA’s proposals is setting out several affordable proposals for tax relief.

“Given the current cost of living emergency, fuel taxes and levies must be reduced, and an expanded zero-rated VAT food basket must be considered now and not deferred.”

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