Western Cape Business News

Send  Share  RSS  Twitter  28 Oct 2014

ECONOMY: Huge Battle Lies Ahead for Finance Minister Nene


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Finance Minister Nhlanhla Nene has a huge battle ahead if he is to succeed in his plans to curb the ballooning cost of the public service, and he needs all the support he can get, says the Cape Chamber of Commerce and Industry.

“He has correctly diagnosed the problem but that was the easy part,” said Ms Janine Myburgh, President of the Chamber. “The real test will be in the implementation, and he may run into some fierce opposition. The public service and municipal unions are already calling for wage increases of around 15 percent, and unless these demands can be resisted, the whole plan to dig South Africa out of financial trouble will flounder.”

Ms Myburgh said the Chamber welcomed Minister Nene’s insistence on better management and less wastage in the State-owned companies. “These companies are consuming the wealth of the country and giving us very little in return. Tough action is long overdue,” Ms Myburgh said.

The Chamber welcomed the realism in the speech, and the clear way in which the Minister set out the challenges facing the country. “He did not shy away from the seriousness of the situation although some of his proposals lacked detail and were open to some different interpretations.”

Acknowledging the danger of more agency downgrades is good and we appreciate Nene's commitment to protecting our image to the international investor community.

Given the challenges facing the economy, it is now more important than ever that our policy makers in other departments understand the difference between policy crafted for a developmental state and guard against implementing policy and legislation which places us closer to a welfare state.

Ms Myburgh said that if we were to get the economy back on the growth path, more business-friendly policies would be needed. “Growth comes from the private sector and not the unions so he will have to listen to some different voices.”

Now is the time to pay serious attention to opening the doors of trade with Africa. This is where the opportunity lies and we sincerely hope that all departments will apply themselves to ways to facilitate simpler, and more streamlined access to African markets.

Given the financial situation of the country, it has become obvious that President Zuma’s grandiose plans for Nuclear power stations are unaffordable. “Minister Nene was silent on the issue but silence will not make the problem go away. He has to find a way to say NO or future generations will be bankrupted,” Ms Myburgh said.

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