DUMA GQUBULE: The government is doing the time warp again
Policies are more conservative than those of the UK’s Thatcherite prime minister Liz Truss
For the third time over the past 15 years many countries have thrown away the textbooks and turned to unorthodox economic policies to deal with a cost-of-living crisis in the wake of Russia’s invasion of Ukraine. After the global financial crisis of 2007-2009 central banks cut interest rates to zero and started printing money. The response to the pandemic-induced recession of 2020 was on another scale as governments spent $16-trillion, with central banks providing a magic money tree.
In SA it is as if the economic policy revolution of the past 15 years did not happen. The National Treasury’s above-the-line (on budget) response to the pandemic was R27bn or 0.5% of GDP. The off-budget responses from the Unemployment Insurance Fund and the loan guarantee scheme were R77.1bn. At the end of July the ANC gave the government its marching orders — find a way of implementing a basic income grant (BIG) in the 2023 budget...
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