‘ANC has run out of ideas how to stimulate the economy’ – Maimane

‘ANC has run out of ideas how to stimulate the economy’ – Maimane

Against the backdrop of a dramatic decline in economic growth in the first quarter of 2019, and with economic policy as one of the battlegrounds for the ANC’s infighting, the DA announced its spokespersons and focus for the Sixth Parliament on Wednesday.

In determining the DA’s focus for the Sixth Parliament, party leader Mmusi Maimane seemingly took heed of former US president Bill Clinton’s internal campaign slogan: “The economy, stupid.”

He said the party would focus on an agenda for reform.

“The most pressing of these is the need for urgent economic reform,” Maimane said.

Jobs, energy, Reserve Bank

He said the DA would table a Jobs Bill and Cheaper Energy Bill, focus on city-led economic growth, fight for labour legislation reform, and oppose any changes to the Reserve Bank independence and mandate.

The party would also propose alternatives to the current State Owned Entity (SOE) ownership framework, propose alternatives to the current Mining Charter, and oppose what the DA views as threats to the economy and fiscus, such as National Health Insurance (NHI) and expropriation of property and land without compensation, he added.

The DA’s spokespersons for the economic portfolios will be as follows (with the deputies in brackets):

Trade and Industry: Dean Macpherson (Mathew Cuthbert);Finance: Geordin Hill-Lewis (Dion George);Public Enterprises: Natasha Mazzone (Erik Marais);Employment and Labour: Michael Cardo (Michael Bagraim); and Small Business Development: Zakhele Mbhele (Henro Kruger).

The DA’s previous spokesperson on finance, David Maynier, is now MEC for finance in the Western Cape government, while his deputy, Alf Lees, will this term represent the DA on the Standing Committee on Public Accounts (Scopa). Maimane said Hill-Lewis and George have studied economics and George served on the finance portfolio previously.

Shrinking economy

On Tuesday, Statistics South Africa announced that South Africa’s economy shrank by 3.2% in the first three months of the year.

Then, also on Tuesday ANC secretary general Ace Magashule said the ANC NEC resolved at its Lekgotla over the weekend that the Reserve Bank’s mandate should be expanded. He also claimed they had asked government to appoint a task team to explore quantitative easing, or “quantity easing”, as he called it.

However, Finance Minister Tito Mboweni and ANC economic policy head Enoch Godongwana came out late on Tuesday evening to deny any concrete plans or commitments to expanding the Reserve Bank’s mandate.

“There is no quantitative easing thing here,” Mboweni tweeted.

Speaking to reporters after announcing the DA’s spokespersons, Maimane didn’t dwell on the ANC’s internal machinations, but he did say: “It’s very clear the ANC has run out of ideas how to stimulate the economy.”

‘Other mechanisms’

“My thinking is we need not only table an alternative budget, but be able to say, rather than going out to print money, we’re better off creating cost-cutting mechanisms, settling the question on the debt ceiling, and ensuring that our focus is on the correct investment and savings, so that we can stimulate our economic growth,” Maimane said.

“If we fail to do those things, no amount of quantitative easing will be able to achieve economic growth. Instead, it will lead us to high levels of inflation and a weakened currency, and in a world where our exports are deflated at the level that they are, it would effectively mean that we would lead ourselves to a situation where there is increased joblessness.

“So, we have to look at other mechanisms than what the ANC is proposing.”

Published at Wed, 05 Jun 2019 19:42:49 +0000