BY
HON H.F MOTALA, MPL (20/09/2018)
It is an undisputed fact that ANC government has failed to address the issue of unemployment and this affects even those living in KwaZulu-Natal. Unemployment in the country has reached alarming proportions proving that targets outlined in South Africa’s long-term Vision 2030 are likely to be missed. Government has been planning in last 24 years, plans that have given our country many downgrades and a massive inflation. Various plans have not worked because of the incompetent government leadership. Food prices have more than doubled in the last 8 years.
Recession
Recently, it emerged that the country has officially entered a technical recession, after Stats SA announced that the country’s real GDP had decreased by 0.7% in the second quarter. This follows a GDP contraction of 2.2% in the first quarter. By the looks of things, the country is highly unlikely to achieve necessary growth in the next two quarters. Our country should be at least growing at 6% per year for a period of at least 20 years as a necessary condition to make meaningful inroads into employment and economic growth. This is SA’s first recession since the 2008 global financial crisis after which the ANC failed to recover to much-needed economic growth and jobs.
Job losses & unemployment
Between the first and second quarter of 2018, we have seen 102 000 more people losing their jobs and more jobs are on the line. Where are the 5 million jobs promised by former president? Instead unemployment rate rose to 27.2% of the labour force in the second quarter with youth unemployment (15–29 age group) at an alarming 52.2%. This translates into more than 9.6 million people who do not have employment in this country. In KwaZulu-Natal alone, unemployment rates are much higher than employment rates. No matter how you slice it, this is not a good story to tell. Those who are employed are getting poorer and living beyond their means.
Solutions
It is time that government realise that the country is desperately in need of positive business sentiment, better business confidence as well as improved investor confidence to trigger new investments for job creation across all industrial sectors. The business sector is suffocated by a tax burden that is far too high in this country. Empirical evidence confirms that there is a negative relationship between higher corporate taxes and economic growth in the world as higher tax burden scare investors away, destroy existing businesses and results in lower wages and retrenchments as we are witnessing in our economy. Therefore, our government must offer tax breaks to businesses to make the country more conducive and make it a more competitive investment destination. It is vital for the country that foreign capital should be forthcoming and that the cost of that funding should be kept as low as possible.
To this end, the IFP strongly believes that it is crucial that policy-makers show an intent and commitment to get the basics right by further introducing tax incentives and tax dispensations that allow significant investments. Fiscal policies must be surprise-free and business friendly to enforce a sustainable economic growth in the country through a positive long-run relationship between trade-openness, capital and gross domestic product.
Furthermore, our country needs to recognise the vital role, and massive potential of small businesses particularly in rural and semi-urban communities. With the right tools, funding, skills and mindsets youth can create value for themselves and their communities. Granting trade tools for start-ups is approaching employment creation with a sense of realism and practicality.
A healthy relationship between government, private sector labour and labour representatives can go some way towards alleviating the unemployment crisis. The IFP believes that the following issues need to be addressed:
- Address the business economic environment challenges that are stifling private sector growth, corruption, and transport connectivity, among others.
- Move away from rhetoric and well written strategies and policy statements, and instead commence implementation. Commence implementation of the economic stimulus package and improve access to finance.
- Make loans available to the youth to cater for entrepreneurship ventures.
More jobs, skills training programmes and internships
The IFP has long cautioned the use of short-term and unsustainable programmes such as EPWP programmes. The IFP calls for more sustainable jobs to be prioritized. The government must stop using these programmes for comrades and family members. It must be noted that these skills programmes are paid for with public money, not to be used as an election campaigning tool. These skills programmes are unsustainable tools meant to provide working experience for the unemployed therefore a solid job creation tool is urgently needed. The IFP strongly believe that there should be no graduate without an internship and a job thereafter.
The “prioritisation” of incompetent, unqualified and unskilled comrades and family members in the expense of graduates and competent youth must be put to stop. This kind of corruption has put our province under risk and threats. Recently we saw different groups attacking local municipalities demanding jobs and tenders. This province should prioritise the creation and maintaining existing jobs in six priority areas where most job losses recently came from: infrastructure development, agriculture, mining and beneficiation, manufacturing and the green economy tourism.
I thank you
