Opinionista John Steenhuisen 6 November 2019

South Africa: No country for young people

If we want to give young people a fair shot, we need to stand up to public-sector unions, cut costs, and open up our state monopolies to competition. And we need to lower the barriers that lock young people out of our economy by exempting them and small businesses from the more restrictive labour market regulations.

A generational injustice of epic proportions is playing out on the national stage. In the six-year period from 2015/16 to 2021/22, South Africa will be borrowing a billion rand a day, every single day to pay our bloated public sector wage bill and prop up failed state-owned companies. As Finance Minister Tito Mboweni was revealing this bleak fact last week, StatsSA announced that youth unemployment (including those young people who have given up even looking for work) had now breached the 70% mark.

Young people are paying the heaviest price in South Africa. They’re locked into debt and locked out of the economy. Not only are we shamelessly spending on their credit cards, the system has also been rigged to favour incumbent workers and large firms over job seekers and new businesses. The cold-blooded truth is that young people are the sacrificial lambs on the altar of patronage politics and failed ideology.

Spending on your children’s credit card is one thing when you’re investing heavily in their education or in productive assets that will yield a future income stream for them. Quite another when it’s to pay 29,000 largely unproductive public sector managers over a million rand each per year and to prop up failing companies like SAA that provide subsidised public transport for the rich.

For the sake of the younger generation, we need to stand up to public-sector unions and reduce the public sector wage bill. Eskom, for example, has about 48,000 staff members earning on average more than R780,000 a year while in other countries, energy companies produce similar quantities of power with less than half that many staff.

The number of passenger trips delivered by Prasa, the state-owned company tasked with delivering passenger rail services to South Africans, has dropped by 60% from 650-million in 2008/9 to only 270-million in 2017/18, even though the salary bill has ballooned from R2-billion to R5.4-billion.

The next generation of taxpayers – today’s youth – will be funding that inefficiency. Rather than spending future tax receipts on education and health, they’ll be forced to spend it on paying back debt.

South Africa’s debt is set to balloon from R3-trillion now to R4.5-trillion in three years’ time. There is no plan in place for how to pay it back. On the contrary, we’re committed to a plan that ensures we’ll sink deeper and deeper into the quicksand.

Not only is our debt growing rapidly, but the cost of our debt is growing too, as lenders become more and more disillusioned with us. Moody’s rating agency has given Mboweni three months to cut R150-billion from our budget and to address the problem of state-owned companies. Otherwise, our credit rating will be downgraded to junk status which will significantly raise our cost of borrowing.

To achieve this R150-billion cut, the DA proposes leaving frontline public servants – nurses, doctors, teachers, social workers and so on – unaffected, while reducing the number of highest-paid head office management staff and implementing a three-year wage freeze on all non-frontline wages.

If we want to give young people a fair shot, we need to stand up to public-sector unions, cut costs, and open up our state monopolies to competition. And we need to lower the barriers that lock young people out of our economy by exempting them and small businesses from the more restrictive labour market regulations.

In his first state of the nation address, in January 2018, Cyril Ramaphosa stated unequivocally: “Young South Africans will be moved to the centre of our economic agenda.” It’s now time for him to stop delaying the hard decisions and start acting. And we all need to get behind him on this. Otherwise, we condemn our children to being economic outcast and prisoners of debt.

That would be a travesty, but it doesn’t have to be our fate. We can give our young people everything they need to shine in life if we can find our national backbone and stand up to the unions. We can provide our children with an education that will allow them to step into adulthood with something to offer the world if we can muster the courage to stand up to SADTU. We can build a South Africa where our children inherit the wealth and potential of this nation and not only its debt, but this will require bold and brave leadership.

This fight for a better tomorrow and a brighter future for all young South Africans lies at the heart of the DA’s project. It drives everything we do. If this matters to you too, it’s time to add your voice to ours. DM

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