The National Working Committee of the ANC, at its meeting on Thursday the 7th of March 1996, received a report from the Economic Transformation Sub-Committee of the NEC on the South African Foundation document entitled "Growth for All". The NEC agreed that a statement should be issued expressing the position of the ANC on some of the key aspects of the document. This is done in the spirit of debate and discussion required by the democratic character of our emerging democracy.
The "Growth for All" document runs the risk of pushing our country backwards in a number of respects and the policy proposals contained therein could be a recipe for disaster if they were ever to be adopted by any South African government.
Firstly, the proposals around fiscal policy would lead to major social dislocation and not assist at all the processes of poverty elimination which the document purports to advocate. While there is clearly a need to avoid a move towards a "debt trap", the proposal to "slash the deficit" to 2% or less seems to be based on a blind ideology rather than seriously seeking to contribute meaningfully to dealing with the challenges of development which we face as a country. The suggestion to substantially increase VAT while reducing direct taxes and "slashing the deficit" would not only cause the poor to bear the brunt of fiscal policy, but would cause major political difficulties. The management taxation, the deficit and fiscal policy in general, is something which we have pronounced ourselves on many occasions.
Secondly, the argument put by the South Africa Foundation on the labour market is probably the most ridiculous of all. The suggestion to create a "two-tier" labour market, in which people employed under such conditions will not have basic human rights is to say the least an affront on democracy and a fundamental departure from any principles of justice which the business community has so often advocated. This proposal would mark the return of institutionalising black workers once more in a cheap labour system under the disguise of a "second tier" labour market. This proposal would be rendered unworkable at the first attempt and we cannot associate ourselves with such.
Thirdly, the call by the South African Foundation for a "brisk privatisation programme" seems to fly in the face of processes to restructure state assets which are well known to business. There is a national framework agreement which outlines the processes for the restructuring of state assets. However, what the South African Foundation is proposing is an ideologically driven "privatisation" programme which they know, is unlikely to become policy. We would suggest that the Foundation should familiarise itself with the contents and processes outlined in the National Framework Agreement. We remain convinced as the ANC that there is a role for both private and public sectors in the South African economy. Correctly organised and focused, these could contribute significantly to economic development and growth in our country. Attempts to reduce the role of the state from its fundamental developmental focus should be resisted.
Fourthly, there is a striking silence on the part of the South African Foundation on the role of their membership, which is primarily big business, on such burning issues as antitrust policy which is critical for developing a competitive domestic market without which international competitiveness is rendered the more difficult to attain. Whilst we applaud the need for international competitiveness, we feel strongly that our tarrification policies and others required for this purpose must ground themselves firmly on the South African reality as we restructure to face the global markets. There are no quick-fix solutions.
Finally, the overall thrust of the proposals seem to be aimed at shifting economic policy to the right-wing. The document does not address key developmental issues such as how to empower black people economically as an important component part of transforming South Africa. The Foundation, representing big business, seems to be placing demands on the government and not addressing at all the question: What should business be doing to foster development in our country.
The challenges facing South Africa are immense. The "Growth for all" document does not help much in tackling these.
March 9 1996
Issued by Department of Information and Publicity,
P.O. Box 61884
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