Balancing election promises with realityComment on this story
Cape Town - It’s all eyes on President Jacob Zuma on Tuesday when he delivers his State of the Nation address, anticipated to balance achieving the governing ANC election undertakings of job creation and economic growth with prudent management of a tough financial environment.
While an end of the five-month platinum strike would provide a silver lining – an in-principle agreement was reached last week, but the deal has yet to be signed on the dotted line – a series of negative indicators cast their shadow over already hard-pressed consumers.
In the wake of a 0.6 percent economic contraction in the first quarter of this year reported by Statistics SA – the World Bank earlier revised economic growth downward to 2 percent, down from 2.7 percent – downgrades by rating agencies on Friday are set to increase the cost of borrowing at a time when a government priority is infrastructure, particularly in the high-cost energy sector.
The ANC election manifesto pledged 60 percent of all infrastructure-related jobs would go to youths, while the promised 6 million job opportunities over the next five years would arise predominately from the Expanded Public Works Programme.
But recent Statistics SA figures show youth joblessness has since 2008 increased by 3.4 percent to date, and remained significantly higher than unemployment among those older than 35, thus upping the ante to tackle job creation challenges.
It’s a tough environment in which to present an action plan for the much talked of radical economic transformation backed up by concrete announcements, even if ministers should provide the finer details.
A call for unity in action across all sectors and society is widely expected from the president tomorrow. The National Development Plan (NDP), South Africa’s vision to reduce poverty and inequality by 2030, is set to be central to charting a way forward, insiders say.
That plan would form the basis of strategic discussions to ensure synergy between plans and speedy implementation. The medium-term budget policy statement, dubbed the mini-budget, in October is expected to flesh out the rands and cents.
In the wake of the ratings downgrades, the National Treasury emphasised that the government was alive to the economic growth challenges, and was committed to keeping its debt within manageable levels, while maintaining fiscal sustainability and stability.
“(The government) has therefore prioritised the accelerated implementation of the NDP, with reforms that are aimed at unlocking South Africa’s growth potential,” it said.
Already over the past year national government departments have realigned their plans with the NDP, and it is understood provinces have been told to do likewise.
Government priorities are unlikely to change from those of the previous five years as policy continuity is maintained.
Job creation and economic growth, health, rural development, the fight against crime and corruption and education still top the list.
However, local government is expected to emerge key on Tuesday, not only because of the 2016 municipal elections, but also because of communities’ service grievances, linked to increasing numbers of protests, as dissatisfaction particularly over water supply emerged on this year’s election campaign trail.
Meanwhile, ANC alliance partner, labour federation Cosatu, said it expected Zuma to report on progress into an investigation of the possibility for a national minimum wage as promised in the ANC election manifesto.
“It is totally unacceptable that half of all employed workers earn R3 000 a month or less, meaning most workers can’t afford the basic necessities of life,” said Cosatu national spokesman Patrick Craven.
Cosatu is also pricking its ears for announcements on details of the radical economic transformation.
Issues include industrialisation, the ANC election manifesto promise of 75 percent local procurement by government departments, state-wide planning capacity and increased investment in vital socio-economic infrastructure such as energy, information communication technology, reliable public transport and water supply.
“To achieve these manifesto commitments, the ANC will have to be prepared to challenge vested economic interests, in the state and the private sector, that continue to promote the agenda of powerful elites,” said Cosatu, adding it also wanted an end to labour broking and e-tolls.
According to an Ipsos “Pulse of the Nation” survey, job creation and tackling unemployment was the most important issue for 55 percent of respondents, followed by a distant second of development of infrastructure at 10 percent.
Based on face-to-face interviews with 3 730 randomly selected adults, the survey also showed addressing unemployment was the top priority for black South Africans (60 percent), followed by development and infrastructure (11 percent) and tackling poverty (10 percent).
White South Africans prioritised redressing unemployment (32 percent), followed by tackling corruption (22 percent) and crime (20 percent).
Priorities among coloured South Africans were tackling unemployment (54 percent), followed by addressing crime (18 percent) and corruption).
Addressing unemployment ranked first among Indian South Africans (36 percent), followed by crime (26 percent) and corruption (20 percent).
While a third of respondents believed they would be better off next year – and 48 percent felt it would be about the same – overall 62 percent also felt that even though they paid tax, they do not get their money’s worth in terms of service delivery from the government.