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Future SA won't have to pay tax bill for today if Manuel has a say
October 5, 2009
By Ethel Hazelhurst
It's clear what Planning Minister Trevor Manuel's critics have against him. The minister has no time for empty promises. Manuel has made it clear that, while motherhood and apple pie are admiral concepts, simply admiring them gets us no further.
In the green paper on national strategic planning Manuel has tried to drive this message home.
In the preface he points out the benefits of having "independent experts and strategic thinkers" on the proposed national planning commission.
"Its purpose is to prevent government from being trapped in its own institutional preconceptions," he says. "Commissioners will be expected to ask challenging questions about our plans, and not to rest until we have provided satisfactory responses."
Among the questions, of course, will be: how will the country foot the bill? And who will pay it?
That's exactly why Cosatu is so bitterly opposed to Manuel's central role in the economy. A cost-benefit analysis early in the process is not what they want.
The union federation is very happy to leave the bill for ill-conceived economic policies to future generations.
The reason politicians favour this approach is that future generations won't vote in the next election.
That's why it's so important for current voters to understand what it is possible for governments to achieve and what is beyond human intervention - or at least to understand the time frames involved. Good policies do pay off, but not necessarily before the next election.
Both politicians and voters are responsible for sustaining the myth that there is a quick fix - the former for selling the idea and the latter for buying it.
One example of how attempts to create growth where there is little possibility of growth is how governments treat sunset industries. And it has now become clear that in many countries - including the US - this includes the motor industry.
Globally the industry may not be on its last legs, but it requires greater efficiencies, which are only achieved by companies largely outside the US.
When cash for clunkers - a support programme introduced in the US to shore up the crippled motor industry - expired in August, the rebound ran out of steam.
Kevin Lings, an economist at Stanlib, says: "In September 2009, US vehicle sales plunged to a mere 9.2 million (annualised) - the lowest since December 1981."
This demonstrates that not all rescue measures have a permanent effect - a warning to our own government that there are limits to governments' powers to direct the course of events.
A similar point was made in the New York Times in an article about the rise of China and its threat to Japan's position as a global economic power.
The article says: "Many economists expect Japan to cede its rank as the world's second-largest economy some time next year, as much as five years earlier than previously forecast."
While China has grown "about 10 percent a year for most of the last two decades, Japan stagnated as huge public works projects aimed at reviving the economy went towards protecting moribund industries instead of fostering new ones, failing to lift Japan out of its doldrums, while creating a huge debt burden".
If voters accept politicians' promises at face value they will leave a legacy of debt to their children.
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