NEVA MAKGETLA: State has better options than harsh spending cuts
The UIF levy could be cut in half and its surplus used for infrastructure, debt or public employment
The medium-term budget policy statement (MTBPS) plans extraordinarily harsh cuts in core public services: 6% in healthcare, 4% in policing and more than 2% in education. SA cannot afford such large cuts. They would slash investment in human capital and social cohesion in a society already riven by deep inequalities, deteriorating bulk infrastructure and slow economic growth.
More innovative solutions are possible if we prioritise national development over pacifying creditors and avoiding disruptive changes in government systems. As an example, consider the huge unused financial investments held by the Unemployment Insurance Fund (UIF) and the Compensation Fund. Each has holdings of about R100bn. These resources could be used far more effectively and sustainably to support communities and producers...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.