Growth plan lacks Cabinet support - DA

2010-11-24 21:16

Cape Town - The New Growth Plan unveiled by Economic Development Minister Ebrahim Patel contains proposals that are unacceptable to several of his Cabinet colleagues and the Reserve Bank, the DA said on Wednesday.

"The document on the table presents several ideas that would be anathema to Finance Minister Pravin Gordhan, Trade and Industry Minister Rob Davies, Planning Minister Trevor Manuel, and Reserve Bank Governor Gill Marcus," DA trade and industry spokesperson Tim Harris said in a statement.

He challenged them to publicly lend their support to the plan.

"If they do not do so, then we can only assume that Minister Patel's lonely seat at the announcement of the plan is indicative of a lack of support from the 'absent' ministers who have actual influence over macro, micro and monetary policy."

Harris said most of the good ideas in the plan, such as reform of BEE, small business policy and competition and trade policy, "cannibalise" the responsibilities of the trade and industry minister.

"The plan also reduces his IPAP2 Industrial Policy to a plan to turn around manufacturing, doing it a serious disservice."

Unrealistic

Further, it "stomps all over the finance minister's constitutional mandate to set economic policy and define a fiscal framework".

"It airbrushes out his youth wage subsidy proposal, commits the state to a fiscal policy stance, as well as significant new infrastructure expenditure, and alludes to firm currency interventions.

"Perhaps most alarmingly, it rides roughshod over the independence of the Reserve Bank by committing the governor to a looser monetary policy, and subverts Planning Minister Manuel's dual responsibilities for long-term planning and African infrastructure development through Nepad."

Harris said the plan also failed to tackle the fundamental reform required in the labour market, preferring a "social pact" to moderate wages.

"While this is a laudable idea that the DA supports, we believe it is unlikely to succeed, and the state's energy should be directed instead at reforming the labour market directly."

While the DA supported the intention of accelerating growth and creating millions of new jobs, "we do not believe Minister Patel's proposal represents a realistic or implementable plan to do this".

The state simply did not have the capacity.

"It appears to us that the senior economic ministers also have their doubts, so we challenge them to lend their support to the plan, or join our call for it to be withdrawn and significantly rewritten," he said.

- SAPA