A senior South African ruling party official urged the government to accelerate spending on infrastructure to create jobs and warned against raising taxes to fund additional social benefits.
“We have a lot of infrastructure that needs to be repaired, the railway lines, dams, roads and bridges in some provinces,” Paul Mashatile, secretary general of the African National Congress, said in an interview Thursday. “That’s where the jobs will come from.”
Mashatile’s comments come amid an ongoing debate in South Africa about how best to revive the coronavirus-hit economy, reduce a 34.4% unemployment rate, and tackle rampant poverty and inequality. A recovery plan unveiled by President Cyril Ramaphosa in October last year called for the government to allocate 100 billion rand ($ 6.7 billion) for new infrastructure within four years, spending that would boost another trillion rand of investment. private.
Mashatile, 59, a former prime minister of central Gauteng province who has been touted as a possible successor to Ramaphosa, said implementation of the plan should be accelerated, and the newly appointed Finance Minister Enoch Godongwana would make that a maxim. priority.
Attracting investment will not be easy. Restrictions imposed to slow the spread of the coronavirus caused the economy to contract further in 27 years in 2020, revised data released this week by the national statistics agency showed. Spending on infrastructure and fixed assets fell 14.9% last year, and business and consumer confidence is languishing at multi-year lows.
Last week, the Department of Social Development proposed that companies and workers be forced to contribute up to 12% of their profits to a fund that could provide unemployment, retirement and disability benefits, an option rejected by business groups. and labor. Civil rights groups have been campaigning for years for the government to introduce a welfare grant.
“We need social assistance for the poorest of the poor, but we also need a financing mechanism that is sustainable that does not exhaust those who are already contributing,” Mashatile said. “We will be cautious looking at that. It may not be something we do right away. ”
Mashatile also revealed that the ANC may have to scrap its plans to change the constitution to make it easier for the government to seize land without paying for it and address racially skewed ownership patterns.
An amendment would require the backing of two-thirds of lawmakers, meaning the ruling party would need the support of radical Economic Freedom Fighters to pass it, but an agreement on the wording has proven elusive so far.
“We already have an Expropriation Law that gives us space to do some of the things we want to do,” Mashatile said. While it does not explicitly say that the land can be expropriated without compensation, “we believe that there is room for us to do so with that act and we can prove it in court if there are deficiencies. But it seems that it will be the viable way out given the circumstances, “he said.
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