HILARY JOFFE: Local is lekker, but showpiece grand plans won't do the trick

Almost R14bn is a lot to spend on very short-term jobs

18 October 2020 - 00:19 By Hilary Joffe

What is the government's strategy to lift the economy out of stagnation and create the jobs SA needs, in a world profoundly changed by the Covid pandemic? The Ramaphosa economic recovery and reconstruction plan hinges on two or three big components that are supposed to drive job creation. But it's not clear that any of these will live up to the high hopes of their promoters. First is the mass public employment programme that aims to provide temporary "work opportunities" for hundreds of thousands of people in the shorter term, while other initiatives supposedly come together to get the economy back on track and get businesses hiring again in the longer term.

Community-based public works projects can and do make a real difference to communities, as well as providing youngsters with at least some experience to equip them for the world of work. Some of the programmes detailed on Thursday do look creative and laudable, and could provide much-needed incomes and services. And if the government really can make the promised 800,000 hires happen between now and the end of the fiscal year, it will be a sign it can indeed implement ambitious plans. But almost R14bn is a lot to spend on very short-term jobs, and even that is far short of the R100bn total that's been promised. We will want to watch that the money is better spent than it would be if, say, it were just added to the existing employment tax scheme that incentivises businesses to hire new workers, or just paid over in equity or grants to small and medium companies that promise to expand and hire. We will want to see too that the government gets it that the private sector is by far the economy's largest employer - and that unless it creates an environment that encourages private sector companies to invest and grow, there can be no durable solution to the job-creation conundrum...

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