CAROL PATON: Should government blow deficit because economy is tanking?
Constructed and sold carefully enough, a large infrastructure fund could provide a credible story to investors and ratings agencies
It’s a suggestion implicit in the ANC statement issued last Wednesday by the head of the economic transformation committee, Enoch Godongwana, following the release of the GDP numbers on Tuesday. The statement has a substantive list of measures the party believes could provide a "fiscal stimulus". The quick wins and doable among them include: tax credits for companies that invest in job creation; increasing government investment in social and economic infrastructure such as water and sewer projects, housing, public buildings and public transport; investment in road and bridge maintenance that has a high employment impact; agricultural support programmes and land reform directed at supporting young people to find work opportunities; and scaling up the public works programme. Previously, the ANC and the government said after their mid-year lekgotla that they wanted a "stimulus package" that would cost about R43bn, but would be deficit neutral. What Godongwana suggested last week is dif...