LETTER: Fix state’s policies not its size

Cutting the size of government departments (in some cases possibly eliminating departments entirely), recently mooted by the Ramaphosa presidency, would be a necessary but not sufficient reform for putting SA on a better economic path (“Who dares walk the Treasury’s rocky path to a sustainable state?”, September 18).

It is not just the size of the government that matters, but arguably more importantly it’s what its role is (or how those who administer the state view its role in the economy, with business and in society).

That the economy trudges along with below -1% GDP growth a year, and unemployment consistently at record-high levels, is a feature of the government’s ideological and policy choices.

While global events such as the financial crisis in 2008 and the Covid-19 pandemic of the past few years have made matters worse, the government placed SA in a weaker position to contend with those storms. The protection of state-owned entities, rigid labour laws, threats to property rights and investments; should no substantive change to these areas occur, cutting the size of government will do little to stimulate meaningful economic growth.

Growth is not a given. For higher levels of capital formation, business growth and job creation to take place, the necessary conditions and incentives must be chosen and created.

While shrinking the size of an underperforming public sector will be a welcome step, without reforms that change the fundamental posture of the government and its relationship with business and society little in the bigger picture will change.

Chris Hattingh
Centre for Risk Analysis

JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.