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The IFP comes today with dissenting views on the MTBPS. In the
finalization of the joint Committees Report, the Chairman of the
Finance Committee censored these views, ruling that they could not be
mentioned in the Report even though under the Rules of the National
Assembly minority views must be reported when dealing with
legislation. The IFP has mainly two concerns.

Firstly, the IFP cannot associate itself with the MTBPS' total
reliance on the economy turning around this fourth quarter and
thereafter maintaining a high rate of sustained economic growth for
the next three years. This way too optimistic scenario is pegged on
selected positive signs; and on the uncorroborated belief of a sudden
raise in consumer spending; and on the assumption that the South
African economy will be raised by the raising of the US economy and at
the same time as it. It is also based on underplaying signs which
suggests that the depression will continue next year, such as the
projected decline in construction and the recessionary effect of the
completion of the world cup infrastructural and commercial
preparation. It is risky boosting consumer confidence with the
untested promise that the hard days are over.

Secondly, realizing, as one should, that even though the global
depression started as a financial crises it has now become an
industrial crisis, the IFP criticizes the MTBPS' failure to make
required structural adjustments to create a new and globally
competitive industrial basis and to cut on chronic government created
industrial problems.

The depression should have given the impetus to abolish the entire
system of exchange controls which has no purpose at this country's
stage of development; and to introduce the flexibility in the labor
market which government has been talking about since 1998; and to
reform the non-performing or under-performing sectors of the
parastatal. This would be the time to merge the many similar
government institutions providing essentially the same services to
SMMEs, to transform the Land Bank into a specialized division of the
IDC; to shut down the non-commercially viable arm manufacturing
division of Denel and to privatize SAA, SALCOF and other SOEs as an
alternative to raising public debt.

This would be the time of taking a hard look at government assisted
economical sectors which are not viable in the global marketplace.
Focused as it had to be on social services, since 1994, South Africa
has not undertaken a structural transformation of its parastatal and
of government's industrial policies; with the end result that the
pre-1994 mould has been kept alive in fear than anything replacing may
be worse. This would be the time to question whether our economy
grows or shrinks under the opportunity cost of subsidies and tariff
and non-tariff trade barriers for the benefit of the textile and auto
industries. This would be the time to reconsider the many monopolies
and cartels which are legally beyond the reach of the Competition
Commission and have expand the pre-1994 anti-competitive mold.

The IDC is providing mini-bail outs to industries across the board on
the basis of the assumption that what was viable before the depression
will return to be viable after it. This may prove not to be the case.

The MTBPS speaks of necessary relief for our economy, such as
devaluation of the Rand and cuts in interest rates, but none have
affected in any relevant manner, as if there is time for it. The MTBPS
should bring tax reliefs and a new package of long-term incentives for
the creation of new viable economic sectors, such as assistance in
R&D, but it contains none.

Government funding of both groundbreaking and basis industrial R&D
should be the incubator of new industries capable of creating South
African global products, even if this means to fund the revamping of
Denel's R&D and establishing a few more dedicated SOEs for this purpose

This would be the time to build a future; instead the MTBPS reflects
the attitude that it shall soon be business as usual. And if in the
next three weeks the economy does not turn around as hoped, we are up
the crick with no paddle and deep into the spiral on higher public
debt, requiring higher interest rates to financing it, creating high
inflation, impairing economic growth causing even greater need for
public debt if one is not to cut social spending.