Cap40 Event: Conference with Tim Harris 24th April 2013
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Transcript of Cap40 Event: Conference with Tim Harris 24th April 2013
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Event Organized by:
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The South African Opportunity: analysis of SA political situation, economy and 2013 budget
24 April 2013Tim Harris MP
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2012: A bad year for South Africa…
• Widespread strikes in mining & transport
• Sovereign Credit Ratings downgrades from Moody’s,
Standard & Poor’s & Fitch
• Foreign direct investment down 44% year-on-year
• R200m state spending on President Zuma’s personal
uncovered
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2013 Budget Analysis
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2013 Budget Highlights
GOOD
Youth Wage Subsidy
Special Economic Zones
Small Business Tax Review
Incentives for Charitable Giving
NDP Alignment
NOT SO GOOD
A drag on African Growth
Infrastructure spending
Mining Tax review
Stealth taxes
NDP Accountability
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Three underlying problems
with the South African economy…
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High structural unemployment…
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5
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Inability to achieve high growth rates when times are good…
Average Growth (2002-
2010)
Highest Growth (2002-2010)
Peru 6,3 % 9,8 %
Ghana 6,0 % 8,4 %
Vietnam 7,3 % 8,5 %
Singapore 6,5 % 14,5 %
Panama 6,6 % 12,1 %
Upper Middle Income Countries
6,4 % 8,9 %
South Africa 3,6 % 5,6 %
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• Education remains broken
• Ideological deadlock within ANC’s ruling alliance
• The Cosatu trade union’s dominance
• A National Treasury that controls finances but not
policy
• General hostility to Foreign Direct Investment
• Spend our time looking backwards, not forwards
Political blockages…
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8
South Africa’s Ranking2012/2013
Strength of Auditing and Reporting Standards
1/144
Co-operation in Labour-Employee Relations
144/144
Efficacy of Corporate Boards
1/144
Quality of Maths and Science Education
143/144
Regulation of Securities Exchanges
1/144 Hiring and Firing Practices 143/144
World Economic Forum’s Global Competitiveness Report
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The DA’s Plan for Growth & Jobs
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Breaking down the insider/outsider economy
• Apartheid built an economy of insider and outsiders dominated by large state and private companies
• Today we still have division: Big Government, Big Unions and anti-competitive Big Businesses on the one side, and the majority of South Africans on the other
• Our solution is to make markets work for the many, not just the few
• The state has a responsibility to intervene when markets fail, but also when powerful public and private sector players abuse their market power at the expense of others
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29
Western Cape: The Province of Opportunity
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Five reasons why I’m optimistic…
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1. The African Opportunity
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2. We have proven we can deliver in the 2010 World Cup…
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3. We have companies that have taken on the world, and won…
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4. We have the world’s biggest reserves of mineral resources at $2,5 trillion
(estimated by Citibank, 2010)
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5. The prospects for democratic transition• The DA is the only party to have grown every election (1994 = 1,7%)• Control 27 municipalities and Western Cape• 2014 Target: 30% of the vote and another province• 9m under the age of 34 eligible to vote (but 4,7m unemployed)