The 2021 SONA and the Covid-19 budget
By Opinion 44m ago
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By Chris Harmse
One would like to hear that the State-of-the Nation Address (SONA) tonight is in sequence with the national budget that will be delivered by the Minister of Finance Tito Mboweni later this month.
Both the President as well as the Minister now have a golden opportunity to turn the economy around, boost foreign and domestic confidence in the government, without playing party politics.
Circumstances on the Covid-19 issues as well as in the economy had turned so to the positive perceptions and realities that Mr President and Minister Mboweni can’t afford to drop the ball.
The President must address the following issues urgently:
- Use the strong downward trend in the new cases and deaths of the Covid-19 pandemic as due to the huge effort by the public, health workers and business in bringing the second wave down. Don not again try to sell it as government involvement alone and boost the ANC. This is a South African effort. Many small businesses had to pay the highest price and many workers suffered income and jobs. The President must thank everyone for their efforts. Many people lost their jobs and livelihood.
- Give the precise roll out of the vaccination program. Explain why the AstraZeneca vaccine offers minimal protection (it was no one fault not the government or the Ministerial advisory committee or anyone). The President will have to clarify what will be done with the 1 million dosages. Also, that the Johnson and Johnson vaccine will be as effective as the Pheizer and Moderna for South Africa and even better. People need to hear it to counter unnecessary panic. The President must elaborate on the role that the private sector and NGO’s will play in the rollout program. That the medical aid funds will pay for their 8.5 million members and will sponsor another 8.5 million non-members. In other words, the President should mention that the “haves” will pay for their shots and will sponsor the same amount of the “not haves”. The President should emphasise that the private sector’s involvement will bring down the expected costs of the roll out for the state from R20 billion to around R12 billion. This is what foreign investors, and the rating agencies would like to hear. Mention as well that the Minister of Finance will find the rest without increasing taxes. Give the time frame for the vaccinations
- The President will have to provide details of the government’s economic plan of investment in infrastructure. We would like to see a time frame, targets, and plans to meet the targets.
- The President will have to tell us what the plan and standpoint on corruption are. What will happen to government officials, Ministers, and other public officials as well as members from the private sector, that were involved in corruption. The President should elaborate on what will be done on the corruption allegations around the PPE’s. The President will have to be clear on the Zondo-commission and its report.
- The President will have to elaborate on the government’s plan against the illegal trade on so many fronts. Must the taxpayers continue to sponsor them? The steal of the government's income increases the national debt to GDP, leads to unnecessary downgrading to junk, higher interest and bond rates that increases the servicing of the debt. The President must show leadership in this regard. It is not the job of the Minister of Finance.
- The President will have to deal with the wide scale mall administration of local governments, given the devastating reports from the Auditor General. Will there be a clean-up process? and will the local elections still take place?
Dr Chris Harmse: Economist of CH Economics (Pty) Ltd
* The views expressed here are not necessarily those of IOL or of title sites.