JOB CREATION

 

A country is judged on whether its economy creates enough jobs for its entire people.  Many South African parents from all communities are concerned that their children will not get a job after they leave school, college, university or university of technology; that their training will be meaningless.

 

To these parents and their children, the NP says:  It’s your country too and you deserve a fair share:  a share in the economy, a share in job satisfaction and a share in this country’s growth.  The NP wants our youth to be able to build a promising future in their own country.

 

South Africa cannot afford to lose our skilled and competent people.  The NP it is not only about who gets the jobs, but that there must be enough jobs for everyone.  In other words, rather than to fight about a fair share, we must ensure that there is a fair share available for all South Africans – coloured, white, Indian and black.  Therefore the NP commits itself to the creation of enough opportunities for all its people.

 

Entrepreneurship is the most important source of job creation and smaller businesses must be encouraged.  However much still needs to be done to create a climate conductive to the development of small, medium and micro enterprises and entrepreneurship.  The tax burden on these types of enterprises as well as on job creating enterprises must be relieved.  The framework of labour legislation within which these enterprises must function, must also enable them to grow.  Therefore the NP believes that South Africa’s rigid labour legislation must be relaxed in order to encourage small and medium enterprises, which in turn stimulate employment and job creation.

 

Stimulating economic measures that are already in place must therefore be further, expanded.  Due to these measure, a large number of lower income level workers, especially in urban areas, have already shifted to the middle class.  This is also happening in rural areas where the middle class consisting of 45% of the population in 1994 has grown to 54% recently.  The worker’s class has shrunk from 42% to 26%.

 

The NP believes that current legislation regarding labour should be revised so that the poor can be saved from an economical disaster. The NP shall declare poverty a national emergency to enable all to halt the further determination of economical conditions among the poor. Investment-friendly tax policies will be introduced that will benefit businesses which contribute to job creation. The NP also believes that businesses, which create jobs, should be awarded certain tax kickbacks. The NP wants to see certain services delivered to businesses free of charge.

 

AFFIRMATIVE ACTION

 

The NP believes that the removal of the inequalities of the past can be best achieved by a pragmatic and flexible approach that creates certainty and stability. The NP also believes that affirmative action has thus far had a negative impact on South Africans from minority communities in the workplace.

 

Affirmative action has achieved many of its objectives, but also has the potential, if applied as an unfair and unbalanced basis, to contribute to a feeling of exclusion, alienation and marginalisation. The NP is opposed to affirmative action that is about the filling of quotas rather than the empowerment of communities and the promotion of productivity.

 

Affirmative action must take place in such a way that will prevent service delivery and basic administrative standards from being negatively affected. Currently the ANC reserves jobs mainly for black South Africans while the DA, in cities like Cape Town, reserves most of the jobs for English-speaking whites. The NP believes whoever is best qualified to do the job must get appointed, no matter the race or culture.

 

The NP is also in favour of a sunset clause regarding affirmative action. The NP will apply merit without discrimination should be the only factor in appointments and employment. Service standards on local level is collapsing due to the fact that people get appointed based on race rather skill requirements. This the NP will not tolerate as we aim to make South Africa right!

 

What makes the brain drain trend very alarming is that South Africa is losing highly qualified and economically active people of all colours to other countries while we attract fewer and less qualified immigrants to South Africa. Only the NP can turn this trend around, as we will subsidise skilled South Africans to return to our country.

 

According to Statistics SA, for example in 2002 alone 9908 professionally trained South Africa to take job opportunities overseas. These are people who indicated on their departure forms that they are emigrating. However, in the same year only 6545 people obtained permanent residence in South Africa, of which only 16,1% is economically active, thus 83,9% are economically inactive. This indicates a net loss in expertise, a very serious trend seen against the background of education backlogs among South Africans and the lack of job opportunities for our own people.

 

If we take in account that Statistics SA figures only reflect some 50% of the real numbers of emigrants, and we calculate what the country has spent on teaching and training of South Africans who emigrate, we must realise that the extent, financial loss and effect on job creation of this issue must be urgently looked at. The causes of this alarming trend should also receive urgent attention under NP Government.

 

The NP wants to urgently discuss the effect of the loss in expertise with Government and wants to clearly state that a developing country cannot continuo making a capital investment in people who are lured overseas by better offers. Our investment in human resources should become our capital asset, which can assist the NP locally in building our country and creating jobs.

 

It is in no South African’s interest to continue ignoring the importance of this issue. By supporting the NP, you empower the NP to make South Africa right. You the voter will enjoy the benefits of an environment created by the NP where we will make it attractive enough for skilled people not to accept any offer abroad.

 

THE MACRO-ECONOMIC ENVIRONMENT

 

The development of our young democracy over the past decade was a significant event.  If this is however not accompanied by the improvement of the quality of life of all South Africans, it will have no true meaning.  After ten years of democracy it is necessary to, according to the economy, critically judge where successes have been achieved and where the challenges of the next five to ten years lie.  Simply put:  Does the new dispensation enable every South African to get a job and to improve his/her own situation?  However, seen in isolation, this would be an over-simplification because the economy had to change drastically after decades of being beleaguered and sanction driven.

 

LABOUR

 

Because the buying power in South Africa is and will remain limited, South Africa will have to seize every opportunity that arises in the international financial and trade markets if we want to increase the real growth rate to 3% or more.  To this end we need a well-trained labour force, which can deliver competitive products and services to the rest of the world.  Training will therefore have to get preference in order to ensure that in the future we will deserve our part of the world’s prosperity.  The provision of education and training facilities must therefore never be about political point scoring.  It is in everyone’s best interest that institutions that provide quality education and training are further expanded and supported.  In the meantime we must also prevent highly skilled people from leaving the country after undergoing training.  South Africa needs every single trained person for future job creation.  In the same way we can also not afford to lose professionals due to diseases such as HIV/AIDS.

 

We will also have to push for an overhaul of the whole labour dispensation to stop us from going down the same road as some developed countries.  The labour markets in some of these countries are so overregulated that enterprises cannot employ additional staff, but rather choose to mechanise.  In the past decade we have unfortunately also started to see the trend in South Africa that those lucky enough to have a job are being so overprotected that thousands of unemployed people cannot get jobs because new job opportunities are not created.  This trend will guarantee failure in the struggle against unemployment.

 

STATE FINANCES

 

Despite successes in this field, we will have to place much more emphasis on how and to which ends money is spent.  Are we creating an environment in which people become dependent on welfare services, which are maintained by the taxpayer?  Or are we using state expenditure to create an environment in which people can create their own future?  If we should continue the almost unchecked expansion of welfare services, our economy will before long have to scale down on longstanding privileges, as was the case in many developed countries, because the economy can no longer afford them.

 

In the past decade the authorities have been very successful in getting most taxpayers to fulfil their duties.  Have we however also created a business friendly environment in the process in which it is profitable to do business and employ people specifically in South Africa?  In the future we will have to ensure that funds raised are utilised in a way that leads to greater prosperity for all our people by using them productively.

 

We also realise that South Africa is not saving enough for its future capital needs.  We will have to find ways of encouraging our people to save.  Of course the saving levels will for some time still not be sufficient, and we will be dependent on the inflow of overseas capital.  If we are serious about achieving a growth rate of 3% or more, we will have to make South Africa’s opportunities attractive to foreign investors in order to create job opportunities and prosperity.  To this end we must create a profitable environment for these investors.  The fiscal policy can play an important role in this regard.

 

This fiscal policy does not only have reference to the central authority, but also to provincial and especially local authorities.  Cause for concern is that most local governments have serious financial trouble, and will try and solve their problems by increasing tax on a wide range of services.  This will lead to the further impoverishment of local communities and even fewer job opportunities.  One hopes that local governments will be able to equal the central government’s success with tax collection.  South Africans must realise their responsibility to pay for services rendered.  In this way an unequal distribution of the tax burden will be prevented, whether in the central or local government sphere.

 

The responsible privatisation of state assets must once again receive the necessary attention.  In the longer term this will mean that a more competitive economy will compensate for any short-term job loss, because services will be delivered more efficiently and cost-effectively.

 

STIMULATING THE DEVELOPMENT OF SMALL, MEDIUM, AND MICRO ENTERPRISES (SMME’S)

 

Job creation through public works programmes must be supported because it can, in the short term, deal a blow to unemployment and poverty.  We must however point out that this is not the long-term solution for South Africa.  Public works programmes often create jobs in the short term, which are not sustainable in the long term.

 

When we look to the mid and long term, we need to ensure that the economic structure of the country is such that it delivers permanent jobs.  To this end, the NP is supportive of greater Government initiatives to stimulate the Small, Medium and Micro Enterprises sector (SMME’s).  Internationally it has been proved that the SMME sector forms the growth driver of the world’s largest economies and is driving much of today’s global job creation.  In the US, Japan and Germany for instance, small business contributes substantially to the gross domestic product (GDP) in each of their economies.  For every investment in an entrepreneurial business, an average of 15 jobs are created.

 

Much needs to be done to stimulate this sector in South Africa.  Obtaining funding is probably the biggest challenge to any SMME.  Interventions that are likely to have a positive effect on access to finance for SMME’s would include a long-term solution by initiating a comprehensive review of existing legislation (e.g. of the Usury Act and Credit Agreement Act).  In addition, regulations should be introduced to improve disclosure of the cost of financial services.  The format should make provision for a comparison between different financial service providers.  Other factors that urgently need to be addressed include the following:

 

  -  Changing the current enormous administrative burden (with resulting cash flow

     burden) on registered businesses.  Regulations such as PAYE, VAT, UIF, and

     skills development levy and the systems and processes relating to these are

     complex, the cost of compliance is high and service levels are not always good,

     which discourages compliance.

  -  South African labour legislation currently serves as a strong disincentive to

     employing staff.  Probable evidence of the overly complex regulatory system

     can be found in the thriving labour-brokering industry in South Africa.

  -  Red tape, cumbersome application processes, limited office hours (only weekdays)

     and a protracted decision-making process, prevent or limit businesses’ access to

     available incentives (e.g. for exports).

 

The South African economy should contain a healthy mix of big, medium, and small business with the driving force being privatisation and profit.

 

AN EMPLOYMENT GRANT AIMED AT ACCELERATED ECONOMIC GROWTH AND FULL EMPLOYMENT

 

The underperformance of SMME’s toward economic growth and job creation in South Africa, compared to other developing countries, has to be blamed on the red tape of an overregulated labour environment, forced upon the informal sector by big business and organised labour.

 

The determination of Government and private sector in partnership to stimulate the role of small business in the economy is demonstrated by the decisions taken during the Growth and Development Summit, the resolutions incorporated in the Financial Sector Charter and the goals set for the Extended Public Works Programme.  A major portion of this medium term budget is dedicated towards accelerating growth in the small business sector.

 

The NP supports the drive to strengthen small business and wishes to propose a plan to accelerate it.  The concept is to strive towards full employment.  We suggest that Government consider and Employment Grant that would enable emerging entrepreneurs to employ more and more people from the ranks of the unemployed.  Everybody must work!

 

The production factors in business are management, capital and labour.  Only the employed are recognised as part of the economic structure.  The unemployed, looking for work, are perceived as outcasts.  We need to accept the unemployed as the potential work force of the future and part of the economic picture, and start treating them with the dignity and respect they deserve.

 

The mechanics of the “Jobs-for-All” programme is to establish and run an employment fund in partnership, as agreed upon, between Government and the private sector.  The Business Trust that was established at the 1999 Job Summit as a five year partnership between business and Government should be extended as a source of funding for grants, as proposed by the NP, to new SMME’s.  In addition to its contributions to learnerships, the private sector should also develop a Mentorship Programme for new SMME’s.  This has to be supported by attractive tax incentives by Government.  New SMME businesses should be exempted from rigid labour legislation for e.g. the first year of operation, while the company is establishing itself.  It is important that the focus shifts away from a mentality of social grants to one of empowerment grants.

 

The grant will assist the emerging employer to pay the salaries of his or her employees for the first few moths until the embryo business can afford the total remuneration package of the workers.

 

Financial institutions must help to administer the programme at grass-roots level.  Emerging entrepreneurs have to be assisted with business plans and financial management.  Experienced local business people, through a mentorship programme, should be involved to guide emerging entrepreneurs towards success.

 

The key to the success of the employment grant programme lies in the deregulation of the labour market for the informal, small business sector.

 

The Employment Grant programme will spawn many benefits:

 

  -  It will expand the economic base for accelerated growth in GDP to reduce

     unemployment.

  -  It will serve as incubator for entrepreneurship and private initiative.

  -  It will restore dignity to the breadwinner by empowering him to care for his own

     family.

  -  It will reverse the growing culture of dependence on social grants in our society

     and restore the principles of self-help and responsibility in the individual.

  -  It will serve as a safety net to prevent many new entrepreneurs and skilled

     labourers emerging from the Extended Public Works Programme, from being

     lost because of a lack of job-opportunities.

 

The only question that remains is to determine if we can muster the courage to bite the bullet and do what we have to do.

 

BLACK ECONOMIC EMPOWERMENT

 

The NP supports Economic Empowerment based on poverty, but that does not mean support for the enrichment of a handful of people with the right political ties.  It is in national interest that black South Africans (including coloured people) are empowered so that the racially based prosperity gap can be narrowed.  The current application of Black Economic Empowerment (BEE) is not narrowing that gap between ordinary South Africans, but only creates new gaps.

 

Black Economic empowerment is about more than money.  There must be more opportunities so that the majority’s access to them does not take place at the expense of minorities. South Africa cannot afford to create new disadvantaged groups.  Black Economic Empowerment must not take place at the expense of other South Africans.

 

The National Party will replace BEE with EEP (economic empowerment based on poverty). By replacing BEE with EEP the benefits of empowerment will be spread among poor masses of all racial groups. It is already clear that BEE only benefited a handful of black entrepreneurs with close ties with ANC leadership. Under a NP administration real and visible empowerment will take place among the masses as where BEE gets implemented from the top to the bottom, EEP will benefit our people from the bottom to the top.

 

The implementation of BEE created poverty among other racial groups, while poor blacks became even poorer. The intention of any empowerment policy should be to wipe out poverty, not create poverty as seen with BEE. The National Party is asking South Africans for a mandate that will place the NP in a commanding position to implement EEP, as it is the only policy that will empower the poor directly.

 

SUMMARY

 

It is vital that we create an employment and investor friendly environment in the months and years to come so that more job and business opportunities are created.  Simultaneously all South Africans must be willing to accept their responsibility to expand our economy, because we cannot get more out of the economy than what we were initially willing to put in.

 

  -  We will maintain fiscal discipline and also expand it especially to local authority

     level.

  -  The handling of government expenditure at central, provincial and local level must

     be such that corruption is prevented at all times and that an environment is created

     for big, medium and small business to do business, make profit and employ people.

  -  Through our financial policy and combating of crime, we will attract overseas savings

     to South Africa to create more local job opportunities by setting up new enterprises

     or expanding existing ones.

  -  In this way we will also create an environment in which our people can exercise their

     democratic rights and fulfill their duties.

  -  We will maintain a competitive environment so that monopolies, whether in the private

     or public sector, cannot exploit the consumer, and the country will be competitive in

     local and international markets.

  -  We will follow a policy in which expertise is created and retained to the benefit of all

     South Africans.

 

   

 

 

 
 

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