Wealth-creators in the private sector should be lauded as ‘economic heroes’, and obstacles in their path removed, if South Africa is to succeed in overcoming the economic crisis it faces.
So says Geoff Jacobs, president of the Cape Chamber of Commerce and Industry.
He said the private sector was the source of the country’s wealth, and to think otherwise was ‘a dangerous fantasy’.
Citing the examples of Zimbabwe and Venezuela, Jacobs said the experience of countries that had attempted to disprove the ‘economic truth’ that ‘every cent that any government spends has its origins in the hard work of ordinary people’ was characterised by ‘rampant corruption, over-borrowing, a relentless slide into a debt trap and ultimately hyperinflation and economic collapse’.
Jacobs said he was encouraged by President Cyril Ramaphosa’s remark last week that ‘stealing money from the State was stealing money from the people who made it’.
‘Our president clearly knows the dangers of widespread economic ignorance. He must also know that the economy was in dire straits before Covid hit, and that actions taken to prevent it spreading have made it worse, wiping out large tranches of taxpaying entities.
‘Exiting the ranks of taxpayers are thousands of newly unemployed individuals, companies now closed, small tourism businesses wiped out in a matter of weeks, restaurants that are no longer viable, office rental companies now without tenants, the wine industry decimated, and the liquor and tobacco sectors shut down for months …the list goes on.’
He added: ‘What faces us in the public and private sector alike is the task of rebuilding the South African economy using all our skills and talents, particularly of those we call entrepreneurs. Instead of [being viewed with] suspicion, these wealth creators should be lauded for the economic heroes they really are. That means clearing away obstacles in their path, speeding up the regulatory processes, simplifying the red tape.’
This was important because of the fundamental importance of the private sector.
‘Every rand of every salary paid to civil servants, policemen, teachers and nurses in state clinics has its origins in the taxes paid by those in the private sector, whether they are called company taxes on profits, personal tax on salaries or value added tax levied on purchases – it is all earned first by the private economy,’ Jacobs said.
[Picture: Bernard Hermant on Unsplash]