Economic growth vital to ease Covid-19 ‘double crisis’

South Africa cannot afford to let the private sector alone continue ‘taking the pain’ of the devastating economic consequences of the Covid-19 pandemic – urgently needed reforms must include reducing state spending and cutting the huge public service wage bill.

So said renowned economist Dawie Roodt in a media briefing hosted this morning by Institute of Race Relations (IRR). Roodt was in discussion with IRR analyst Nicholas Babaya. (Watch the briefing here: https://bit.ly/IRR-Press-Briefing-Dawie-Roodt)

Roodt said: ‘We must reduce state spending and cut the wage bill. We cannot expect the private sector to continue taking pain and the civil service not.’

The crisis presented an ‘opportunity … to restructure fiscal accounts’. This should include ‘getting rid of SAA’ and restructuring Eskom ‘once and for all’.

‘We must have money for important things, and we cannot keep the airline alive while people are starving. We also need to address the size of the civil service. We cannot afford it. Everyone must take pain, and the civil service must take pain, too.’

With the country facing the prospect of losing more than a million jobs and ‘many thousands of businesses’, everything that stood in way of economic growth should be cleared from the path. This included immediately scrapping ‘immoral’ race-based so-called empowerment conditions on government relief measures, and rethinking the scale of the lockdown.

South Africa was in ‘bad way’ and would likely ‘take years to recover’.

This meant the primary focus should be on efforts to enable economic activity and growth. It was not a choice ‘between lives and the economy’, because poverty was the ‘biggest killer on the planet’.

‘We should seriously consider changing our approach. There are some vulnerable people, the old and those with underlying conditions, but we have to open the economy and get it growing as soon as we can. If not, it will lead to poverty, and poverty is a death sentence to many people.’

Roodt rejected as ‘completely and totally immoral’ the imposition of BEE conditions on relief efforts, which counted as just another barrier to stimulating economic growth.

‘If you define things in terms of race, you are missing the plot,’ he said. ‘We are in crisis and it’s immoral to talk about race-based policy. Let’s deal with the crisis.’

Roodt acknowledged that President Cyril Ramaphosa seemed to be ‘finding that he is a powerful person’ and was ‘growing a backbone’, but said there was good reason to be ‘very concerned about the extra powers given to bureaucrats’.

The ban on alcohol was an example.

‘The risk is that if we give them more power, will they give it back? It’s our responsibility to get these powers back,’ Roodt said.

 



Latest


16 Feb 2021
Transition management services partnership announced

Standard Bank has signed a memorandum of understanding (MoU) with Chicago-headquartered financial services company Northern Trust, to partner on the…

Transition management services partnership announced

Standard Bank has signed a memorandum of understanding (MoU) with Chicago-headquartered financial services company Northern Trust, to partner on the delivery of transition management services across Southern Africa. Under the partnership, Standard Bank’s clients will gain access to Northern Trust’s full suite of transition management services. Transition Management is a…

16 Feb 2021
Tax free wealth creation with property funds

By Liliane Barnard, CEO and Portfolio Manager at Metope Investment Managers, and Aimee Glisson, Director: Operations, Performance & Risk at…

Tax free wealth creation with property funds

By Liliane Barnard, CEO and Portfolio Manager at Metope Investment Managers, and Aimee Glisson, Director: Operations, Performance & Risk at Metope Investment Managers The tax year, along with the deadline for an investor’s maximum R36 000 annual tax-free savings account contribution, comes to an end on the 28 February 2021. Investors…

16 Feb 2021
Why multi-manager investing is popular

Multi-management has been around for over two decades. This investment management approach is popular among many investors because it promises…

Why multi-manager investing is popular

Multi-management has been around for over two decades. This investment management approach is popular among many investors because it promises to deliver smoother, more consistent investment returns, despite cyclical turbulence of financial markets. Given last year’s drastic swings in financial markets and continued uncertainty on how the Covid pandemic will…

16 Feb 2021
Momentum Health Solutions unpacks COVID-19 vaccine roll-out plan

Momentum Health Solutions announced its COVID-19 vaccine roll-out strategy and how it intends to support both its members, as well…

Momentum Health Solutions unpacks COVID-19 vaccine roll-out plan

Momentum Health Solutions announced its COVID-19 vaccine roll-out strategy and how it intends to support both its members, as well as the uncovered population, in being vaccinated. As the COVID-19 virus continues to spread, a third wave is imminent, should the vaccination rollout not commence soon. Speaking at a recent…


Top stories


10 Sep 2020
How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key…

How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key that dubbed America “The land of the free”, which stuck, to the unforgettable Mel Gibson monologue where an army of painted Scots were willing to trade their lives for the…

13 Apr 2020
Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19…

Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19 environment and what form a global market recovery will take.

13 Apr 2020
SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The…

SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The draft Bill, together with its explanatory memorandum, provides clarity with regards the tax relief measures President Cyril Ramaphosa announced on 23 March.

10 Apr 2020
When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved…

When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved to be most enterprising in acclimatising to challenges as they arise.


Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za