While President Cyril Ramaphosa and his cabinet have attracted a lot of goodwill, both locally and abroad, for their hard work in “flattening the coronavirus curve”, it’s now time to sustainably create jobs by creating an environment where entrepreneurs can prosper as employers.
That was the message released at the weekend by Thys du Toit, chairman of Rootstock Investment Management and co-founder of Coronation Fund Managers.
The business-friendly environment that Du Toit envisions is a tax friendly, secure environment with effective policing. It is also corruption free or at least subject to as little as possible corruption. According to Du Toit this environment will attract investments, generate growth and generate tax income to repay the huge debt bill that is facing South Africa.
Du Toit listed the following focus areas for consideration by President Ramaphosa and his cabinet:
- Stop funding loss-making state-owned enterprises. Either clean them up, dispose of them, liquidate them or close them. Also fast-track Eskom’s unbundling.
- Decrease the government wage bill – with the cabinet’s 30% salary cut a move in the right direction.
- Suspend the minimum wage for a period of five years as it often keeps job seekers out of the market and makes it difficult to get labour-intensive enterprises off the ground.
- For now, forget radical economic transformation. It diverts the attention, hampers progress and enriches a small select group that has already been enriched many times.
- Remove bottlenecks on spectrum allocation and Independent Power Producer projects.
- Grant mining companies the right to produce electricity.
- Lower company tax to 20% and provide incentives to the manufacturing and finance sectors.
- Put the expropriation without compensation narrative to bed:
