Howard Barrel
OVER A BARREL
Madam Speaker, Honourable Members – South Africans. New circumstances require new approaches.
Ten years ago this week, in this House of Assembly, at this podium from which I now address you on the ”state of the nation”, our then benighted country was launched into a new era. The man who did so showed great courage. A child of white privilege and apartheid, FW de Klerk had the moral strength to say three things: oppression of the black majority was wrong, changed circumstances no longer made this oppression feasible, and it was time for a new approach, for a turn to democracy.
His initiative required similar courage from the leadership of the liberation movement. It confronted us with new circumstances. We had tried for decades – with little success – to break down the door which blocked off our aspirations. Now that door had been opened. Should we still try to kick down an already open door and, guns blazing, pass through demanding an ambush from the other side? Or could we risk confidence – could we enter the future with our hand extended in friendship to our former oppressors?
New circumstances, we then concluded, required new approaches. We put our guns aside.
It has been a decade of great change in our country since then, of immense progress. We have travelled fast and far. But we have much further to travel if we are to give our children the future they need. That is a future in which each child has a roof over his head, food in her belly, a good school to learn at, sufficient personal security to walk our streets safely, a parent in work, and a chance of getting ahead via his or her talents and efforts.
We face these challenges in a world much changed from the one in which my party developed its core political and economic approaches in the 1950s and 1960s. It is no longer possible seriously to suggest that the state can or should be the major allocator of economic resources or creator of jobs. To pursue that approach is, in prevailing circumstances, to invite upon ourselves economic punishment likely to make it impossible to attain the future we want.
New circumstances require new approaches.
Since 1994, our government has – often hesitantly and even reluctantly, usually with stealth – adopted free market solutions that were anathema to us in the days when we were fighting apartheid. Changing has been difficult – a test of our self-confidence and unity. But the new circumstances required new approaches. And it was our duty to respond as we did.
It is now time for us – all of us, in the government and out of it, wherever we may be – to throw off our caution. If, in the new circumstances in which we find ourselves, we are to achieve our aims, we must – pragmatically and enthusiastically – embrace the market-based approaches that have brought, and are bringing, immense prosperity and progress to other countries, some with fewer human and natural resources than we have. We – and I include my party and the government – can no longer afford to be held back from doing the necessary by the few who advocate solutions to the problems of the mid-20th century to cope with the problems of the 21st century. We cannot allow our pace to be dictated by these agterosse. If these people – and they are actually remarkably lonely – cannot accompany us in the choice we are now making, then the choice is theirs as to whether or not they will try to act against us. We trust they will have the courage to be as forthright about their choice as we have been today.
Let me spell things out plainly – in a way it has been difficult for me to do until now. Further detail will be given by the minister of finance in his budget on the 23rd of this month and by my other Cabinet colleagues during the subsequent debate on the budget.
My government will, over the next 10 years, be privatising – yes, privatising – about R13-billion worth (at current estimated values) of state enterprises and assets each year. We will use most of the proceeds to hold down the budget deficit and reduce debt. This will reduce the state’s borrowing and, so, enable us to maintain interest rates at a lower level. This will make capital and new investment cheaper – particularly for new, small and medium-sized businesses. These are the businesses that will create the millions of new jobs we need over the next 10 years. And, by the end of this month, a number of bold proposals will have been tabled – involving the Development Bank of Southern Africa, Land Bank, Industrial Development Corporation and micro-lenders – to boost the informal, small and medium-sized sectors.
The Job Summit of 15 months ago was, I think we all now know, self-deception. Putting together big business and big labour and expecting them to create new jobs is like mating a locust with a snake in the hope of producing a warthog. An alliance of big business and organised labour is more likely to cut rather than produce new jobs.
By May 31 we will have set up an interdepartmental, one-stop entry point for foreign investors. There, we will guarantee them the full processing of their investment proposals within a month – from approval of capital transfers to work and residence permits for foreign personnel. And the budget will announce details for the full and final lifting of all exchange control regulations.
We will be making far-reaching amendments to existing labour legislation. These will also have been tabled in Parliament by the end of May. Industry-wide bargaining and wage determinations will go, allowing for unrestricted variations in pay levels within and between sectors and geographical areas. Disciplinary and other procedures will be greatly simplified, making it easier for employers to replace unproductive workers or to lay off staff during a downturn.
A model for employer-initiated retrenchments in the civil service and state enterprises – a way to fire surplus staff, to put it bluntly – will be also be in place by May 31. We will do this – in accordance with the Constitution – with or without the co-operation of trade union leaderships. The choice is theirs. We will cut the civil service wage bill as a proportion of government spending (after interest) by 10% in five years.
To ease the plight of those who temporarily lose their jobs during this deep restructuring, we are setting up a relatively generous social assistance grant which will guarantee a minimum income to any South African of working age. Some of the privatisation receipts and savings I have announced today will finance it. The scheme will operate for only 10 years, and any citizen will be eligible to receive the grant for a maximum of two years. Nobody need feel, therefore, that he or she will be a victim of the process I am now outlining. We stand all to be the eventual beneficiaries of a process of creative destruction I am outlining today, as we turn ourselves into an internationally competitive, predominantly export-oriented manufacturing economy. Creative destruction is a paradox within which we must now work.
The task before us all is to unlock the value and energy for too long imprisoned in our society by inappropriate thinking and habits. We must get to grips with the world and our country as it is – not as we might wish it was. New circumstances require new approaches.
Thank you.