Nedlac’s dull-as-dust economic recovery plan will founder because it ignores the 25-million 18- to 65-year-old taxpayers and the unemployed. Excluding the ANC, it is commonly agreed that one priority is to pay less for electricity. So let André de Ruyter get on with it, but twist the SA Reserve Bank’s arm to take over Eskom’s R500bn debt.
Using its printing presses is strictly in line with section 225 of the constitution, which empowers the Bank to exercise its powers as central banks customarily do. In 2002 Ben Bernanke, later chair of the US Federal Reserve, explained that in an emergency “the US government has the technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many US dollars as it wishes, at essentially no cost”.
The Reserve Bank’s printing press operators will have to work overtime, because the 25-million also want a quick fix to the dangerous life in rusty, corrugated iron suburbs. That is also a constitutional priority, as section 26 states that “Everyone has the right to have access to adequate housing.”
Rentable accommodation for the estimated 3-million who require it is likely to cost about R600bn every five years, as houses depreciate. These assets will be recorded in the state’s balance sheet. The rents will be reflected in state annual budgets.
There is a three-pronged plan for “infrastructure-led growth; initiatives to build productive capacity, especially in manufacturing; and a strategy to put in place enablers of economic growth that would improve the environment for companies, especially small and medium ones, to flourish”.
The quickest solution here is to replace all income taxes and VAT with land taxes. This has already been proposed by finance minister Tito Mboweni in his 2018 medium-term budget policy statement.
Peter Meakin
Claremont
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