The Democratic Alliance (DA) on Tuesday presented the party’s Medium Term Budget Policy Statement (MTBPS), which seeks to accelerate economic growth by reforming State-owned enterprises (SOEs) for private investment and relieving the economy of anti-poor policies.

Finance Minister Enoch Godongwana is due to present the MTBPS on Wednesday.

DA Shadow Minister of Finance Dr Dion George explained that South Africa’s post-pandemic recovery had been underperforming on many fronts.

“Our economy finds itself trapped in a manufactured self-reinforcing vicious cycle of high government budget deficits, unstable energy supply, declining foreign and local private capital formation, declining levels of gross domestic product (GDP) per capita, uncertainty on private property rights, poor national and local governance, and a vast poorly run public sector dominated by monopolistic State enterprises. The necessary economic reforms require bold policy choices from the Minister,” he said.

George explained that the structural weaknesses in the South African economy severely constrained its ability to respond to growing international uncertainty.

He added that without deregulating the rigid policy environment, which inhibited economic activity, building economic resilience would not be attainable, inflation would continue to surge, the rate of unemployment would spiral upwards and economic growth, if any, would remain slow.

He said continuous bailouts of SOEs had financed failing entities’ debt services, salaries, and current spending on suppliers, adding that apart from the contribution to employee consumption, there was no perceivable value added to growth and development in the sectors in which these entities operated.

“Minister Godongwana must therefore remain firm on his pledge to not reprioritise budget items to bail out failing SOEs,” said George.

The party’s MTBPS seeks to reverse the upward debt spiral by containing debt and managing expenditure.

It aims to fight the high cost of living to protect vulnerable South Africans by introducing a conditional Basic Income Grant, increasing support for small, medium-sized, and microenterprises, and reducing taxes by cutting the fuel levy and removing VAT from an expanded food basket.

It would also fight corruption by bolstering the capabilities of institutions that combat organized and sophisticated crime.

He highlighted that this MTBPS was presented amidst a government-induced economic crisis of more debt, slow growth, record unemployment, unreliable energy, and the rapidly rising cost of living.

“Our economy is in crisis and households are now facing the devastating consequences of decades of government mismanagement of the public finances. The cost of living is spiralling upward, while government remains fixated on its hopelessly failed economic model,” he said.

George said the country’s economy could be rescued and placed on a path to recovery and growth, saying the DA’s alternative MTBPS set out how this could be achieved.

He noted that there was no silver bullet, and the South African economy was surrounded by endless possibilities.

“If we do not divert from the disastrous path that government has paved, we will never see the growth rates we are so capable of reaching and the people of South Africa will never become everything that we are capable of becoming,” he added.