DA leader John Steenhuisen. Picture: Veli Nhlapo
He said the measures included in the plan were broad enough to make a significant impact, and were targeted at the right areas to help achieve the three objectives the DA had also identified for such an economic support package:
“Importantly, the president resisted the pressure from inside his own party and alliance to fund this stimulus package from unsustainable and counterproductive sources like the PIC and tax hikes. His decision to approach global institutions such as the International Monetary Fund (IMF) and the World Bank for loans to make up our shortfall – after budget reprioritisation and accessing UIF reserves – was the right one,” said Steenhuisen.
“We also welcome the direct nature of the poverty relief measures announced. Paying cash directly to poor families and making loans directly available to small businesses is the most rapid, effective way to target such relief efforts.”
He called the R20 billion allocation to healthcare an important announcement, as the country’s ability to effectively treat and control the spread of the virus would determine when and how the economy could return to a semblance of normality again.
“It is crucial that this budget is spent wisely. Apart from capacitating all our hospitals and procuring sufficient PPE and ICU equipment, a significant portion of this budget must go towards a large-scale testing, tracing and tracking programme that can provide us with an accurate picture of the spread of the virus.
“It is also crucial that we enable and enforce the mandatory wearing of cloth facemasks in public, as this has been proven to be one of the most effective ways to halt the virus. This is a public good, and people who need them should be provided with masks free of charge. For around R600m we can provide 40 million poorer South Africans three reusable facemasks, and this would be money very well spent.
“And finally, we welcome the president’s commitment to a phased reopening of our economy and an end to the total lockdown, which is costing us around R13bn a day. This risk-adjusted phased approach to opening society and the economy, based on scientific evidence, is near identical to the Smart Lockdown Plan proposed by the DA, and it needs to be implemented as soon as possible.”
He said the DA was not supporting the plan unconditionally, “as there were several aspects of last night’s announcement that were either ambiguous or very short on detail”.
“For example, the challenging logistics of paying out the temporary unemployment grant. If this fails on implementation, the resultant frustration and backlash could pose a threat. We would also have liked to see a larger social grant increase – R1,000 top-up for all grant types – but for a shorter period of three months, as opposed to a smaller top-up for six months.”
The party also criticised the president’s “failure to make any mention of the massive increase of 73,000 soldiers to be deployed to our streets, as announced just prior to his televised address”.
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“This militarisation of our society and the state is a threat to our democracy, regardless of the circumstance under which it takes place. South Africans are owed an explanation.”
He agreed that the “total economic reset” the president spoke about was something the country “desperately needs” – but it wasn’t clear in which direction this reset would go.
“In a carefully worded speech, a tainted acronym like RET was out of place and thePresident failed to explain what he meant, in the context of the announcement, by Radical Economic Transformation.
“If, by economic reset, he means a reboot of the economy in a way that restores investor confidence and makes South Africa an attractive and easy place to do business, then we are 100% behind him. But we cannot support him if he chooses instead to continue to walk the tightrope of ANC factionalism.
“He spoke of economic reforms that would follow this stimulus, and this is arguably the most critical part of the plan. Because without fixing the underlying structural defects that put us in recession even before the pandemic hit, the effects of this R500bn injection will be short-lived and we will end up worse off than we were before.
“This is an opportunity for the reformists in government to stand up to the enemies of growth within its own ranks. Never has there been a better time to push through reforms to our energy sector, to our SOEs and to our labour legislation. Never has there been a better time to cut the proposed R160bn from the public sector wage bill. Never has there been a better time to sell off SAA and to abandon the economic self-destruction of proposed policies like property expropriation, nationalisation of the Reserve Bank and prescribed assets.
“If we want to make this R500bn injection work for SA, then the economic reforms that follow are far more important than the stimulus itself.”
(Edited by Charles Cilliers)
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