Johan you have a lense that you obviously subscribe to but nowhere in your musings are you talking about the obvious issue here. Deliberate dis-investment by the state. Government has been on a spending freeze (more popularly known as fiscal consolidation)since 2012 which is at the centre of why the state can’t make good on any of its promises. This is not me saying this is Michael Sachs (former ddg of budget at national treasury). The rating agencies have gone as far as confirming this view; there is no local demand in otherword there is no local investment. Which is obviously driven by public spending. When was the last time you saw a large infrastructure spend in the country ? Look at the size of the construction companies now shadows of their former selves. You are shocking me quoting Peter Bruce as if he is some authority in economics. You are skirting past important issues by rehashing popular narratives that actually don’t fit at all. You speak of cronyism etc what is happening in the US ? Is that going to impede job creation, economic growth etc. No why ? Because corruption is a rounding error in the grand scheme of a countries development.
You touch on many issues. Let me respond to the first point you make: that the government is on a spending freeze. One of the main issues with the government is not that it doesn't have money to spend on infrastructure; it is that it doesn't have the capacity to spend on infrastructure. Budgets are often underspent, for example. The only city that is investing (national) infrastructure funding is Cape Town, because they can actually do the work.
Our debt-to-GDP ratio has increased substantially over the last decade, and that is a consequence of both continued spending and zero growth. Where spending has been curtailed it is to ensure that this number doesn't skyrocket. What is clear is that there is no room for further stimulating demand. We've now run up against the structural constraints, things that would require much more political will to fix. Treasury - and people like Michael Sachs - knows this, even if it is hard to admit it in public.
Johan you have a lense that you obviously subscribe to but nowhere in your musings are you talking about the obvious issue here. Deliberate dis-investment by the state. Government has been on a spending freeze (more popularly known as fiscal consolidation)since 2012 which is at the centre of why the state can’t make good on any of its promises. This is not me saying this is Michael Sachs (former ddg of budget at national treasury). The rating agencies have gone as far as confirming this view; there is no local demand in otherword there is no local investment. Which is obviously driven by public spending. When was the last time you saw a large infrastructure spend in the country ? Look at the size of the construction companies now shadows of their former selves. You are shocking me quoting Peter Bruce as if he is some authority in economics. You are skirting past important issues by rehashing popular narratives that actually don’t fit at all. You speak of cronyism etc what is happening in the US ? Is that going to impede job creation, economic growth etc. No why ? Because corruption is a rounding error in the grand scheme of a countries development.
You touch on many issues. Let me respond to the first point you make: that the government is on a spending freeze. One of the main issues with the government is not that it doesn't have money to spend on infrastructure; it is that it doesn't have the capacity to spend on infrastructure. Budgets are often underspent, for example. The only city that is investing (national) infrastructure funding is Cape Town, because they can actually do the work.
Our debt-to-GDP ratio has increased substantially over the last decade, and that is a consequence of both continued spending and zero growth. Where spending has been curtailed it is to ensure that this number doesn't skyrocket. What is clear is that there is no room for further stimulating demand. We've now run up against the structural constraints, things that would require much more political will to fix. Treasury - and people like Michael Sachs - knows this, even if it is hard to admit it in public.