Advertise Here
Icon

Directory

IconActuaries
IconAdministration Outsourcing
IconAsset Managers
IconAssociations & Institutes
IconAuditors
IconBanking
IconBBBEE Consulting and Verification Agencies
IconBusiness Chambers
IconBusiness Process Management
IconCompliance
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconCurrencies
IconDebit Order Collection Facilities
IconEducation and Training
IconFAIS
IconInformation Technology and Software Partners
IconInvestment Consulting
IconInvestment Fund Managers
IconLegal
IconLISPs
IconListed Equities
IconOmbud
IconParticipation Bond Managers
IconPolicy Trading
IconProperty Unit Trusts (PUTS)
IconPublications
IconRegulatory Authorities
IconStock Exchange
IconSurveys and Research
IconTraining Courses & Workshops
IconUnit Trust Fund Managers
IconWellness Programs
Image
  Subscribe To »

Dependency on social grants threatens government’s infrastructural spending plan

Published

2012

Thu

23

Feb

While yesterday’s budget by Finance Minister gave the overriding sense that government is now starting to show a real commitment to infrastructural spending, after more than two years of policy paralysis, increasing spending on social grants threatens this ambition.   

 

This is according to independent economist Sandra Gordon, who was the guest speaker at a budget briefing this morning held by global audit, tax and advisory firm Mazars in Cape Town.

 

“The country’s transition in 1994 was political rather than economic with the result that the subsequent robust growth rates have not generated enough employment. The current youth unemployment rate, which stands at about 50%, means that most young people - who should be contributing to our economy - are lying outside of the economic system.”

 

As last year was called ‘the year of job creation’, Gordon contended that the announcement during the State of the Nation Address of a drop in the country’s unemployment rate from 25% to 23.9% overstated the progress made as it did not include job-seekers who had stopped looking for a job, as those are no longer regarded as job hunters. “The rate may easily rise up to 35% if discouraged workers - those who are no longer employed and had stopped looking - were included,” she said.

 

With the economy generating few employment opportunities, many South African citizens are increasingly reliant on government social spending – which is budgeted to rise to 58% of government spending.

 

“With almost a third of the country’s population receiving social grants and with the public sector wage bill rising rapidly, government has limited scope to increase spending on infrastructure.

 

However, it is estimated that infrastructure development funds of R4.5 trillion are available over the next three years within government, state-owned enterprises and development finance institutions. Gordon said this will achieve two main objectives – to lower the costs of doing business in the country and help create employment opportunities, especially for semi-skilled and unskilled labour.

 

With growth in the world economy likely to remain subdued for the foreseeable future, it is hoped that government’s planned infrastructure drive will provide the necessary impetus to lift the local economy onto a higher growth path.

 
Source: Claire Densham Communications
 
« Back to previous page Print this page » |
 

Breaking News »

Actuarial Society to investigate unsecured lending practices

The recent curatorship of African Bank has shown that a one-size-fits-all approach to managing risk in the banking and lending industries is fundamentally flawed. Michael Tichareva, chairperson of the Banking and ...
Read More »

  

ITC announces launch of the SME Trade Academy

(Kigali/Geneva) The International Trade Centre (ITC) is establishing a trade academy for small and medium-sized enterprises (SMEs) to offer practical, vocational training online for SMEs and trade advisors in the ...
Read More »

  

Base Erosion and Profit Shifting Project high on SA Government Agenda

BEPS: the OECD releases the first round of recommendations that are intended to bring about the most significant reform of the international tax system since the 1950s The Base Erosion and Profit Shifting (BEPS) ...
Read More »

  

President Kagame opens the World Export Development Forum in Kigali

(Kigali, Rwanda) - President Paul Kagame today opened the World Export Development Forum (WEDF), which is taking place in Kigali, Rwanda. More than 800 delegates from 73 countries are attending the event. President ...
Read More »

 

More News »

Image

Healthcare »

Image

Life »

Image

Retirement »

Image

Short-term »

Image

Quick Survey »

  Sponsored by
Image
Can there be fair discrimination in the workplace?



|Results »
Image
Image
Image
Image
Advertise Here

From The Glossary »

Icon

Accommodation:

Insurance that, by itself, would not be acceptable to an insurer, but is written due to the possibility of securing other desirable business.
More Definitions »

 
 
By using this website you agree to the Terms of Use.
Copyright © Stoker Risk & ICT (Pty) Ltd 2004 - 2014.
All Rights Reserved.
Icon

Advertise

  Icon

eZine

  Icon

Contact IG

Icon

Media Pack

  Icon

RSS Feeds