Sell parastatals, says DA

2012-02-20 22:24
Cape Town - The Democratic Alliance on Monday proposed partially privatising state enterprises to boost infrastructure spending to 10% of the national budget.

Presenting the DA's alternative budget, finance spokesperson Tim Harris said government should follow the example of Brazil, which this month raised some R70bn by privatising operations at its three biggest state-owned airports.

The deal saw the state retain a 49% stake in the operations and a Brazilian-South African partnership secure a contract to run Sao Paulo's Garulhos Airport for the next 30 years.

Harris said South Africa's infrastructure drive could be boosted by R55bn a year by partially listing state-owned enterprises and selling off their existing assets and investing the proceeds into building projects.

This would add more than 2% to the 7.8% of the budget President Jacob Zuma pledged last week to invest in infrastructure, without introducing new taxes or increasing the forecast deficit of 5.2%.

The DA's budget proposals, made two days before Finance Minister Pravin Gordhan tables his annual budget, foresees a slightly lower deficit and is part of policy changes the party is advocating to achieve sustained economic growth of 8%.

Political clout

Harris said the DA's main concern was job-creating growth and the first step towards this was the urgent implementation of Gordhan's plans for a R5bn youth wage subsidy, that ran into opposition from the trade union movement.

"That has to be implemented on the first of April. If the president and the finance minister lack the political clout to push it through, then that is a serious problem for the three plus million unemployed young people in South Africa today."

The DA proposed reimbursing the private sector for job training, cutting the state's wage bill by limiting salary increases to inflation levels and saving more money by doing away with several national departments, including public works.

It said it would create a single ministry of education and a single one for national resources, grouping minerals, energy, the environment, water and tourism.

A raft of such measures to streamline government could save about R3.3bn, freeing up more funding for education and projects that would stimulate growth and job-creation.

Harris conceded that the DA's call for limited privatisation ran directly counter to current government thinking, and that it would take more than a single budget cycle for any profits from such an exercise to reach the state coffers.

"There is a serious divergence between the ANC's programme and ours. The state is following a form of state capitalism and we believe that this isn't going to work in South Africa because frankly we don't have the capacity to deliver even the most basic services at national level."

DA parliamentary leader Lindiwe Mazibuko said the party's economic policies were compatible with the national development plan released in November, but added that with the new growth path the government had regrettably set off in a different direction.

"The new growth path... has a very different premise on how the state should be involved in the economy. We think that the aim of creating five million jobs is very admirable, but it is based on a flawed assumption of the role of the state."
Read more on:    da  |  economy  |  budget 2012

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