Government to blame for SA’s weak economy not global crises, says DA

The DA believes it is wrong to blame global affairs for the state of the SA economy, saying it is government’s fault the country has not recovered from the crises.

Launching the DA’s first economic policy in a decade on Friday, the party said it will continue the payment of social grants in a fiscally responsible manner.

“The grant’s continuation will only remain viable if there is economic growth and sufficient tax revenue to fund it,” according to the DA policy document.

DA shadow finance minister Dion George said the party guarantees existing social grants would remain in place and not be reduced because the economy would grow in terms of the party’s new economic policy.

“There is no doubt our economy will grow if you take the DA’s proposals and put them into place. It can only grow for the simple reason that we have government in the way of growth at the moment. Our economy is artificially suppressed, it’s like there is a big stone placed on it. The moment you lift the stone you are guaranteed a rise.”

DA deputy shadow finance minister Ashor Sarupen said it is a fallacy to presume that if there are global issues that affect SA the grants will stop.

“It’s important to debunk the excuses the ANC has made over 15 years about how crises have affected the South African economy.

“It is true the 2008 financial crisis burdened South Africa and other countries. Employment figures dropped substantially, but by 2016 Organisation for Economic Co-operation and Development (OECD) data showed the global economy recovered and there were more jobs all over the world except South Africa. It was an eight-year recovery but it was a full recovery globally in job numbers.

“When you look at Covid-19, it is true there was a dramatic decline in global employment in 2020, but by 2022, in OECD countries, 70% of the working age population was back in employment.”

So it was untrue global trends were causing economic stagnation in SA, Sarupen said.

“Shocks happen in countries all over, even our African peers have recovered strongly and more people on this continent are employed now than they were before Covid-19, except in South Africa.

“We have now just reached the 2017 levels of job numbers. This shows you there is a fundamental problem with the structure of the economy and the policies pursued, because when there are shocks, domestically, we don’t get the same recovery we do globally, which shows we have a major problem.”

Party leader John Steenhuisen said: “The biggest threat to social grants in South Africa is a collapsing economy. If the economy continues on the trajectory it is [now following], with huge debt servicing costs, crowding out of spend on the social set by debt servicing and wasteful expenditure, we will not progress.

“The biggest threat to the viability of social grants in South Africa is the ANC's continued mismanagement of the economy. Which is why our policy is a call for growth that creates jobs, lifts people out of poverty and ensures fiscal stability and viability but also injects confidence in investment.”

DA head of policy Matthew Cuthbert said his party wants to incentivise people to find employment.

“We want to activate people as we’ve done in the Western Cape with our job seeker’s voucher, where we’ve given people an opportunity to get transport to go out and find work and we believe we can convert the social relief of distress grant into something similar. 

“We would be dishonest if we said we didn’t have the fiscal space and sufficient economic growth to promise something in perpetuity. By implementing our plan, we will be able to generate growth and increase the tax take so we can continue providing these types of services.”

However, the DA had to be realistic and honest with voters and not promise things it can’t deliver.

“Hence we say, any further commitment to policy initiatives must be based on sufficient revenue to be able to cover that. Potential beneficiaries will need to provide a CV and proof of job application or alternatively produce a business plan for submission at the department of labour which will be verified on an online system.”

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