Executive Summary

At a time of almost unprecedented international financial uncertainty, the Democratic Alliance (DA) today outlines our vision for the future of South Africa's economy, in the form our new economic policy "Creating Economic Opportunities for All". Our policy will give all South Africans the opportunity to take charge of their own lives and make the most of their potential.

We see a future in which the government and the private sector work together in partnership to grow an economy ripe with opportunities for all South Africans, most especially for the millions of unemployed South Africans who have been denied access to jobs and life changing opportunities. In our vision, every South African has an opportunity to move forward to a more prosperous future and in so doing not only improve their own lives and the lives of their families, but to reinvigorate our nation as a whole.

The failure of the sub-prime mortgage industry and the resulting collapse of bank and insurance companies in Europe and the USA has strangled credit lines and has led to an international economic crisis on a scale unseen since the Great Depression of the 1930s. Demand has dried up and South Africa's major trading partners in the US, the EU and Japan are in recession. India and China whose appetite for our commodities is vital to our own economic prosperity are also facing slowing growth.

Around the world stock markets have collapsed; large financial institutions have gone under or been bought out; and in the United States and Europe, governments had to come up with rescue packages to bail out their financial systems.

Clearly South Africa is not immune from the challenges facing the international economy. We are already experiencing large-scale job losses, the international prices for our commodities have fallen and key high employment industries in the mining, manufacturing and retail sectors are experiencing dramatic slowdowns.

South African policy makers have two responsibilities; not only do they need to respond to the immediate problems caused by the credit crisis but also have to improve the productivity of our workforce and facilitate further investment in the productive capacity of our economy. This is the only way that our economy can provide more opportunities for jobs to the millions of people who are sidelined by poverty and unemployment and ensure South Africa's future prosperity.

The DA's economic policy allows for a virtuous cycle of skills development, infrastructure and technology investment, improved productivity and increased employment. Wage subsidies, the simplification of our labour and tax regulations and the elimination of the skills development levy will cut the cost of doing business and encourage employers to hire first time workers and improve their productivity through on-the-job training.

In partnership with private sector contractors, the expanded public works programme will be used as a mechanism for skills development and will be focused specifically towards those on the sidelines of our economy whilst our opportunity vouchers will allow our young matriculants to pursue self employment opportunities or further study.

A DA government would facilitate, not direct economic activity and would see that our fiscal and monetary policy acts not so as to control economic activity but to attract labour creating investment through price stability, a competitive tax regime and appropriate government expenditure.

Not only would we draw more people into our economy through comprehensive broad based economic empowerment, we would facilitate our integration into the international trading economy through more integrated trade and industrial policies. Increased tax revenues through the broadening of the tax base and higher domestic savings rates which would provide the government with the resources to invest in infrastructure, technology and innovation and in so doing improve our productive capacity.

A DA government would be clean and efficient. We recognise that stability encourages jobs and investment, and therefore we have put policies, rules and institutions in place that foster stability. We will increase the capacity of the competition commission and the consumer protector to ensure that there is fair competition and that the rights of the individual are protected.

We would put in place specific measures that will improve the capacity and delivery of our public services and will ensure a more transparent public tendering process. We would also give more resources and responsibility to key oversight bodies such as parliament and the auditor general to ensure that public money is spent wisely, efficiently and economically.

In stark contrast, the governing party is increasingly propagating a shift towards a more state-centric interventionist model in which the government has a strong controlling hand in many, if not most, areas of our economy. The immediate effect of such a move is to raise our international risk profile and dramatically increase the costs that we need to pay for the capital of extremely risk averse investors. The long term effects of a state led model can be seen in the failed economies of Africa and Eastern Europe in which cronyism, corruption and inefficiency have been comprehensive in their failure to uplift their populations.

Already, the failures of Eskom, SAA and other public enterprises are suppressing service delivery and provide clear evidence that South Africa's government does not have the capacity for further involvement in the economy.

Empowering more people to get involved in our economy will lead to higher incomes, higher investments, higher savings and higher tax revenues. This in turn will provide us with more resources to make sure that those left remaining on the sidelines of our community are assisted with every possible opportunity to take charge of their own lives, and provide for South Africa's future economic prosperity.