COVID-19: "Aid" but what's the endgame?

COVID-19 “AID”

BUT WHAT’s THE ENDGAME?

OPINION PIECE
by Gerhard Papenfus

The President’s R500 billion COVID-19 aid measures remind me of a family who, as a last (albeit somewhat irresponsible) resort, max out their credit card facilities.

Yes, the poor need to be fed, and that has to happen urgently. Nobody can dispute that. However, months and years from now they will still need to be fed. And then what?

As a nation, we will not survive economically while 50% of our citizens, who could make an economic contribution, are either unemployed or on some form of grant. These citizens are not only completely unproductive, but are a burden on the fiscus – the result of poor economic policies and pervasive maladministration.

No form of aid, no matter how generous, can replace a job, even a low paying job. The insistence by some, who already have jobs, that the unemployed need to have ‘decent’ jobs sound somewhat ridiculous while they try to survive on a temporary grant of R350 per month.

Many, who during the COVID-19 crisis will be earning R350 per month (and then nothing thereafter), will not be able to enter the job market unless they can find someone who is prepared to pay them R4 000 per month (or R11 500 p/m ctc if they envisage a career in the Steel Industry). That is the reason why these individuals do not form part of the official unemployment statistics; they’ve given up trying to find work.

We are prepared to spend billions on grants and other special handouts, but we refuse to allow individuals to decide for themselves what they are prepared to work for, all under the guise of ‘decent’ work; as if there’s something decent about being unemployed. There are individuals who will never work throughout their entire lives. And we are ‘OK’ with that? Can anyone imagine a child not seeing his/her parents going to work? Not even once! What kind of a society are we creating? How can this even be remotely sustainable? We know very well it is not.

We need to realise that the state’s ability to raise taxes to cover up for poor economic policies, corruption and patronage, has been exhausted. To further increase taxes will in fact decrease state income.

Our only salvation lies in fundamentally changing economic policy direction. Treasury’s economic transformation, inclusive growth and competitiveness document ‘Towards an Economic Strategy for South Africa’ gives the appropriate guidance. However, within government circles, where anti-market sentiment prevails to a large extent, Treasury’s approach does not appear to receive much traction at all.

The question is whether desperation following the COVID-19 crisis will bring these sceptics to their senses, or will they plunge South Africa into an even deeper economic morass.

For more information:

NEASA Media Department
Marietha Thirion
marietha@neasa.co.za

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