POLITICS

Our alternative budget - DA

Dion George says opposition approach promotes choice and champions excellence

Alternative Budget 2010: Budgeting for Opportunity

The DA's vision for South Africa is one in which every single person, irrespective of where in the country he or she is born, is safe, healthy, and freely able to take up opportunities to better his or her life.

Every year we produce a detailed cost analysis of our policies and proposals, in which we describe in rands and cents exactly how we would bring this vision to life. We show how the ideas and concepts that underpin our policy translate into tangible, practical programmes that could have a real, positive effect on the quality of people's lives.

Our Alternative Budget for 2010 demonstrates plainly the difference between the DA's vision of an Open Opportunity Society for All and the ANC's closed, patronage society, which has at its heart a distorted version of the "Developmental State".

We believe that this budget identifies innovative and affordable ideas that will help to generate opportunity, promote choice, champion excellence and foster growth and development.

The principles that underpin our budget: 

While the primary purpose of this budget is to turn the abstract into the practical, it is important to understand some of the principles that underpin our vision, for they manifest throughout this document and are responsible for the proposals it contains.

The first of these principles is the idea of competition. Competition is the fuel that drives opportunity and choice, on the one hand, and the incentive that ensures excellence, growth and accountability, on the other. If a society does not promote competition, it will stagnate, its institutions will decay and best practice and development will grind to a halt. We believe it is the state's purpose to create, foster and encourage an environment in which competition thrives, because competing interests will always better service the public interest than the slow, dead hand of the state.

The second key principle is choice, which flows naturally from the first. Choice is both a consequence of competition and the motivation behind it. Without choice, opportunity is limited, and when choice is limited, people's prospects are curtailed and their ability to progress arrested. In many ways, choice is a synonym for opportunity.

The third key principle is personal responsibility. The state should be responsible for creating an environment in which competition thrives and choice is abundant, but in which individual citizens accept responsibility for the choices they make and the consequences that flow from them. This principle is woven into our budget.

We offer a great many incentives, we put a premium on education (the foundation of opportunity) and, as often as possible, our default position is to dilute control and authority and place decision-making in the hands of the people. The other side of choice, however, is responsibility, and having created such an environment, we believe it is up to people themselves to best utilise it

The final key principle is that of support for the vulnerable who cannot enter the economy. There will always be individuals who will not be able to enter the economic mainstream, and the DA believes that a safety net should be available to support those who are, by virtue of circumstance, unable to support themselves.

How those principles relate to the big picture:

There are currently two main economic visions before South Africa: the ANC's distorted version of the "Developmental State", and the DA's Open Opportunity Society for All. The approach of the DA stands in direct contrast to that of the ANC. The ANC's model increases the scope and level of government intervention in the economy, with parastatals being the central agent of this process. It aims to centralise control, it promotes profligate public spending, it ensures the state is central to all aspects of a citizen's life and its foundations are built upon a series of deeply problematic policies (cadre deployment, for example). In short, it is built on values that run contrary to the ideas which underpin an Open Opportunity Society for All, and it results in nothing more than an assault on excellence, a limitation on choice, a check on competition and the poor and inefficient management of the state. This inevitably means a decline in service delivery and ultimately a failed state which always disadvantages the poor disproportionately.

Nowhere is that crisis more evident than with regard to the condition of our parastatals, a subject disturbingly overlooked by President Zuma in his State of the Nation Address.

These institutions are ostensibly the frontline of the "Developmental State" but, an examination of the collapsing state that many of them are in suggests they are better described as the biggest possible disincentive for its continued existence.

The "Developmental State" as envisioned and implemented by the ANC, limits choice (in telecommunications, in electricity, in transport), it prevents competition (our labour laws are restrictive, we discourage foreign investment) and it stifles opportunity (our education system is severely compromised, we are increasingly dependent of state grants, our public works programmes do not give people the skills they need).

Our budget is designed to reverse all of these destructive trends, and to transform our country into a place free of fear, want and poverty.

How the DA will promote competition:

  • The DA will initiate a process to attract private investment to parastatals, which would raise R20 billion in revenue for the fiscus each year for the next three years to increase the level of competition in the delivery of services, while putting a stop to the need for further bailouts of these institutions, thus reducing public expenditure.
  • The DA will convert the country's industrial development zones into fully-fledged export processing zones, including the establishment of a National Export Processing Zone Authority in order to create a vibrant export sector.

How the DA will increase choice:

  • The privatisation of major parastatals would empower consumers to choose between producers and service providers. The market process will penalise any institution that is redundant, and will force businesses to give a good service lest they lose all their customers. This is in direct contradiction to central planning by government, since government will continue to fund programs even though no-one is interested or would want to buy from them.

How the DA will create opportunity:

  • The DA will budget for a range of programmes which will allow young South Africans, who would otherwise have few options open to them, to learn marketable skills. We aim to enrol 500 000 young South Africans in these programmes at an estimated cost of R5 billion per annum.
  • The DA will provide an escalating wage subsidy for the first three years for every person employed as a result of a newly-created full-time position. The subsidy will be available as a tax offset to every tax-paying business.
  • The DA will increase the budget for Land Reform and Restitution grants by 58%, from the currently planned R5.1bn to approximately R8.1 billion.
  • The DA will introduce a range of education programmes in order to improve the quality of public education.
  • The DA aims to make an Income Support and Unemployment Grant of R110 per month available to all South Africans earning below R54 200 per annum or who are unemployed.

How the DA will reward and demand excellence:

  • SETAs cost government R6 billion in 2008/09 financial year, but they have been thoroughly compromised by corruption and maladministration. The DA's budget replaces the hugely inefficient and expensive SETA program with the apprentice system which preceded it. Employers themselves will be able to decide for themselves on the skills they need and make their own judgements, based on the evidence of work done rather than bureaucratic requirements, about the quality and value of the people they train. 
  • The SABC, Transnet and Armscor have all had leadership battles that raged on while service delivery declined. The fact that many of the top appointments in parastatals are deployed cadres - something that amplifies this problem; corrupt and inept managers have stuck to their positions by invoking political intervention. The DA will fundamentally restructure these bodies so that these destructive practices are no longer tolerated.

Statement issued by Dr. Dion George MP, Democratic Alliance shadow minister of finance, February 14 2010

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