LETTER: Putting money in pockets can begin to fix SA
High unemployment means that many households have nothing to spend
05 May 2024 - 13:42
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Dion also wrote in a complimentary tone that “by 2007 [SA] even achieved a primary fiscal surplus”. Yet wanting people to save and thinking the government must aim for a surplus each year are incompatible.
Your columnist, Brian Kantor, clearly stated in his 2017 book Get SA Growing that “growth has to be led by household spending”. The problem we have is that the majority of households don’t have anything to spend. Demand is low because there is such high unemployment.
It is clear, as another of your columnists, Duma Gqubule, frequently argues, that the government must increase spending for the economy to grow, but what it spends on is crucial. Infrastructure is an obvious one. But the real stimulus for growth will be a job guarantee — a government-funded job for anyone ready, willing and able to work, paid at the minimum wage.
This would put spending money directly into people’s pockets and begin to fix the innumerable things that are broken. It would also be a buffer against inflation.
Gqubule is also correct in noting that SA cannot run out of the currency it issues. This means the government does not need your tax money to spend. Commentaries on the declining tax base and the loss of high net worth individuals to emigration are therefore misleading.
What is crucial to our success is resources: material and human. We have them in abundance, though we are losing valuable human ones and selling the material ones too cheaply. The only risk is inflation, but a longer account is required to explain why that won’t arise.
Howard Pearce Rondebosch
JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
LETTER: Putting money in pockets can begin to fix SA
High unemployment means that many households have nothing to spend
DA shadow finance minister Dion George recently wrote that we need to save to enable growth: “Without sufficient savings [by the public], businesses struggle to access the capital needed” (“We need to reshape fiscal policy to cultivate a savings culture in SA”, April 30).
Dion also wrote in a complimentary tone that “by 2007 [SA] even achieved a primary fiscal surplus”. Yet wanting people to save and thinking the government must aim for a surplus each year are incompatible.
Your columnist, Brian Kantor, clearly stated in his 2017 book Get SA Growing that “growth has to be led by household spending”. The problem we have is that the majority of households don’t have anything to spend. Demand is low because there is such high unemployment.
It is clear, as another of your columnists, Duma Gqubule, frequently argues, that the government must increase spending for the economy to grow, but what it spends on is crucial. Infrastructure is an obvious one. But the real stimulus for growth will be a job guarantee — a government-funded job for anyone ready, willing and able to work, paid at the minimum wage.
This would put spending money directly into people’s pockets and begin to fix the innumerable things that are broken. It would also be a buffer against inflation.
Gqubule is also correct in noting that SA cannot run out of the currency it issues. This means the government does not need your tax money to spend. Commentaries on the declining tax base and the loss of high net worth individuals to emigration are therefore misleading.
What is crucial to our success is resources: material and human. We have them in abundance, though we are losing valuable human ones and selling the material ones too cheaply. The only risk is inflation, but a longer account is required to explain why that won’t arise.
Howard Pearce
Rondebosch
JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
DION GEORGE: We need to reshape fiscal policy to cultivate a savings culture in SA
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