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."

  • ronald.stilianou - 2012-02-20 23:40

    this sounds like a very good idea, I see a lot of investment oppertunity

      Mike - 2012-02-21 07:34

      Or perhaps we should nationalise them? If they are privatised, the anc will be bankrupt! If a private company imposes a 25% plus increase per annum, they will be closed within a second!

  • Peter - 2012-02-21 01:02

    The ANC seems blissfully unaware of the fact that the financial policies of the DA are streets ahead of their own plans to help the poor.

      Tony - 2012-02-21 01:37

      It is one story being a Opposition Party - but, it is a different story being National Government. The DA will only embrass itselfs if it EVER became the ruling Party. The only way that the DA can become a successful ruling Party is by imposing draconian rules to manage and control the lives of ordinary citizens and sell state assets to the multi-nationals that will ensure further suffering to the masses.

      Azurite - 2012-02-21 05:27

      Tony, you certainly think everyone is like the self righteous pompous self interest only ANC. Well, wake up, there are better people out there that can do a better job than the useless ANC leadership

      TSR01 - 2012-02-21 09:25

      Tony, how long do you have to wait on the phone to order a DSL line from Telkom? Yesterday, I waited 28 minutes before getting through to an Operator. They told me a technician will come out within "around 30 business days" (which is nearly 2 months). When last did you reflect on how much you pay for electricity? I went to Pick 'n Pay last week to buy R500 prepaid electricity, of which, a large lump is deducted to cover VAT - you end up with ±376 units of electricity, and that isn't even an "actual" R500's worth of direct payment. How long does that prepaid electricity last? Not nearly as long as it should, its the 2nd time this month I've had to top up. So R1,000 electricity this month, and I didn't even get a whole R1,000 worth of electricity, because of VAT and the cost conversion of Rand to Electricity. Telkom and Eskom are parastatal parasites, corrupt and rotten to the core. So, Tony, I must ask, do you recall the last series of "Eskom load shedding", shortly where-after, Eskom hiked electrical tariffs by close on 17%? Do you also then recall, that all of Eskom's executives received "performance bonuses" for "meeting targets" in that same year end? And need I even utter the fact that it was MILLIONS of rands PER bonus? Corrupt, my friend, corruption - THAT is why we cannot allow national critical service providers to fall prey to this ANC government, this "tenderpreneurship", this racial hate-speech and "land re-conquering". Privatize to economize. Vote DA.

  • Nyiko Ngobeni - 2012-02-21 01:58

    We're not in Brazil here. .

      Alfred - 2012-02-21 02:49

      We're not in a 1st world country either by the looks of things, but hey, you keep shouting "Viva!" and "Amaaaandla!" as loud as you can and maybe in the next 18 years you'll get another free Tshirt.

      Azurite - 2012-02-21 05:25

      We don't want to learn from successful nations and become successful ourselves! Typical African mentally. Well, stagnate then, even go backwards...

      Agedah Alex - 2012-02-21 09:02

      With this kind of mentality SA is another Zim,Angola,Mozambique in the making

      stuartcorbishley - 2012-02-21 11:36

      Great observation. I can see you have used a map. Brazil has over come greater adversity in regards economic challenges. They also have been relentlessly trying ways to lift their economy, many failed, many have succeed. Taking advice from a country with a similar economic problem is only a good idea.

  • Senzo Mathebula - 2012-02-21 08:26

    It sounds sounds like an excellent idea unfortunately it wouldn't work in SA bcoz only politically connected ppl would be able to buy those parastatals at a far lower price than their worth. There will be a significant increase on the amount payed for services like railway transport, electricity etc. And the the taxpayer will stil be expected to subsidize that. And the end who wins?

      TSR01 - 2012-02-21 10:17

      There are a number of multinational corporations which would easily be able to leverage the necessary funding to acquire 10% of a parastatal such as Eskom or Telkom - who said the investor/s had to be local? Any share in a nation-wide service supplier is a chance to improve upon a corporation's business portfolio as well as performance history and earnings - turning around a failing Telecommunications monopoly and bringing back service delivery at the same time would have a very positive effect in this country, don't you agree?

  • Chris - 2012-02-21 09:14

    Weeed some advice from Cuba. It seems this goverment believes anything that comes from Cuba. Shame.

  • Agedah Alex - 2012-02-21 09:16

    The DA has to device different means of educating the non literate majority,if not they'll keep voting the ANC like an abuse spouse relationship. This is a good plan but the ANC will never buy it,because either they are out of ideas or just arrogant

  • Agedah Alex - 2012-02-21 09:17

    The DA has to device different means of educating the non literate majority,if not they'll keep voting the ANC like an abuse spouse relationship. This is a good plan but the ANC will never buy it,because either they are out of ideas or just arrogant

  • sicelo - 2012-02-21 13:06

    Of course, if our politicians and related spent more time on issues of the nature for public discussions and ongoing analysis, we'd be well informed for the choices we make in terms of both policy choices as well as those we entrust with implementation.

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