Budgetary allocations towards social grants and housing are indeed necessary and commendable; they, however, do not contribute to long-term economic growth. Funding allocations should instead be focused on growth supporting activities like education and crime fighting. An educated workforce improves business confidence and encourages investment by business and attracts FDI. Equally, with education and better earnings people can potentially provide housing for themselves, leaving the state to provide only for the truly indigent. A lowering of the crime rate will also have similar growth benefits, while also directly impacting the quality of life of citizens.
As an alternative to child grants and RDP-type housing, consideration could also be given to setting up #Grameen Bank model micro-loan schemes instead. These could provide community-based loans for building new houses or extensions, setting up micro businesses, etc. A Stokvel style community cement buying scheme implemented successfully in Mexico could also be investigated.
As an alternative to child grants and RDP-type housing, consideration could also be given to setting up #Grameen Bank model micro-loan schemes instead. These could provide community-based loans for building new houses or extensions, setting up micro businesses, etc. A Stokvel style community cement buying scheme implemented successfully in Mexico could also be investigated.
Budgetary support to SAA[1] is a complete waste. There is no clear developmental justification for holding onto a 100% stake at SAA and making budgetary allocations to it and/or providing guarantees on its behalf. The minister’s subsequent public justification in an interview, namely that this is to preserve jobs, is at best, ‘throwing good money after bad’. And, at worst, it appears to be very unscientific. Where is the research that informed this view?
Increasing spending on defence is also the wrong option. South Africa is at peace with the world and will continue to be for the foreseeable future. Why, therefore, should defence spending increase, especially to finance expensive and fancy equipment like the Gripen fighter jets? To fight against Swaziland or Lesotho? Our porous borders, evidenced by the millions of undocumented immigrants, also belie the justification of border control. Protection of the maritime economy is seemingly the only justified defence expenditure. On the other hand, drastically increasing expenditure on the police would yield significant benefits and would in the end pay for itself through increased FDI, tourism and other virtuous benefits as mentioned above.
[1] There are other SOE’s that are also an unnecessary drain on the fiscus. A ruthless exercise needs to be undertaken to clean them up, sell them off or shut them down
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