ROGER JARDINE: Fixing the economy to drive growth, create jobs and end poverty

Solving SA’s devastating socioeconomic crises — unemployment, poverty, inequality, hunger and the collapse of basic services — requires dynamic, urgent thinking. 

Our recently published 2024 election manifesto, The Change Charter, outlines bold proposals to fundamentally change SA’s ability to stabilise the economy, fund urgent interventions and direct public spending where it is needed most.   

SA is like a country emerging from a long war. Our national balance sheet is under excessive strain and our economic and social infrastructure is collapsing. Corruption, looting and maladministration have devastated our land and left a people who are hungry and despairing.

We need a change — a turnaround plan that can mobilise resources on a significant scale so that these can be rapidly and safely invested to stabilise our economy and raise living standards for our people. 

The first step in this process is a rebuild of the nation’s collapsing economic infrastructure — our allied industries of energy, logistics and transport — to drive economic growth and job creation.

Our approach is pragmatic. Using our collective skills and experience, we will mobilise all available state resources and secure access to global financial markets to fund public-private partnerships. These partnerships leverage government developmental expertise and private sector experience and ability to execute.

For instance, the National Port Authority could lease land, equipment and infrastructure to private operators (including SA companies) that would take over management and operations. It is critical that these outsourced models prioritise job security, skills and career growth.

Once Eskom and Transnet’s balance sheets have been stabilised through mechanisms such as this — meaning debt has been addressed and business models are more sustainable — these SOEs would be in a far better position to access capital markets given the improved underlying earnings stream. Our modelling suggests we can access additional leverage of more than R1-trillion to build infrastructure and expand their operations. 

Wealth tax

Change Starts Now is also proposing the introduction of a Reconstruction & Growth (ReGrow) Fund, which will be ring-fenced by its own act in parliament, under a new government and overseen by a panel representing the finest example of public-private partnerships and distinguished for its technical and financial skill, headed by an independent chair with integrity and stature. The fund will be capitalised as follows through a temporary tax measure: 

• A wealth tax of 1.5% a year for three years, for individuals with a net-worth exceeding R40m. 
• A corporate tax increase of 4.2%, for three years (that is, the corporate tax rate moves from 28% to 32.2% for three years). 
• An individual tax increase of 4.5% for three years, for those earning more than R1.8m a year. 
• A 1% a year charge on retirement funds for three years. 

We believe up to R1.5-trillion could be raised through these interventions combined — money that would be directed specifically towards funding the reconstruction and growth of SA.

This proposal draws deeply on the idea of the interdependence of all our people. A politics that manifests a changed SA is not one that accentuates division and isolation, but makes us see plainly how much we depend on one another and the extent to which a thriving SA requires the contributions of us all. 

We need to acknowledge that while the deterioration and degradation of SA affects us all, some of us are far better able to withstand the blows. Our proposal of a one-off three-year reconstruction tax is intended to fund infrastructure and immediate social protection interventions to stretch and share that resilience to protect the poor and vulnerable. 

These interventions will catalyse sustained employment-rich economic growth. It is an idea that joins the hands of those who have thrived with those who have been abandoned, and one that ignites the economy. 

Social justice

Our engagements countrywide have affirmed that South Africans, rich and poor alike, want the best for SA. There is no real future for any of us — not a future in which we have any sense of shared humanity, of dignity, in which we are all safe — if we continue to be so unequal.

The change we need is one that defeats this destructive inequality, and champions the cause of social justice.

Deployed strategically and effectively, the funds raised through ReGrow could shift SA’s estimated growth rate for 2024-26 of just 1.4% to the 5.2% envisaged in the National Development Plan 2030. In real terms that would mean an SA 15 years from now with an economy double its current size, and 11-million more people employed, per capita income more than doubled, and a tax base double its current size. In short: a flourishing SA, no longer a forsaken SA. 

Priority areas for investment include: 

• Human infrastructure support: public transport; water and sewage; infrastructure to better integrate our cities, such as housing and suburban roads. As an example, ReGrow would secure the release of underutilised urban land close to business hubs of economic activity for low-income housing development to fast track improved living conditions and easier access to job opportunities and city amenities. 
• The revival of passenger rail between living areas and places of work. 
• Providing microenterprise support for the creation of small businesses, and a huge SME fund for start-up and expansion capital. 
• Supporting the special economic zone plan, involving infrastructure and training support to local authorities and enabling financing for entrepreneurs. Start-up funding for SEZ entrepreneurs would be ensured under ReGrow. 
• Targeted industry development plans in technology, tourism and energy (in particular, electricity generation). With the support of local and global technology firms, ReGrow would underwrite the creation of tech hubs in each of our major cities. 

This fund and plan will be measured not only by the monies collected and directed, in the projects and initiatives supported, in the collaborations it inspires, but by the economic growth it unlocks and the real betterment of South Africans’ lives it allows. 

It will represent an outstanding demonstration of the will to achieve an integrated, inclusive and cohesive SA in which together — united and richer in our diversity — we offer a better, more hopeful future to all of SA’s children.

The Change Charter is based on one fundamental premise: that to fix this country, we must start by investing in our people and giving them hope. We believe solving unemployment and hunger is not something that can be endlessly postponed until elusive economic growth occurs.

Economic growth is not occurring because most citizens exist outside the traditional economy, unable to work or purchase goods. This in turn dampens production of goods and leads to further job losses. Investing in our people must be the catalyst to economic growth — and there is much evidence to show that this is exactly what happens when a country puts its people first. 

We understand that what we are proposing will require sacrifice and social solidarity from those with wealth and opportunity. But the possible returns are extraordinary: increased stability, a growing economy, peace and safety. An SA for all, and for all our children. Who wouldn’t want to live in a country like that? 

• Jardine, a former director-general of the department of arts, culture, science & technology and chairperson of FirstRand, is founder of Change Starts Now.