For twenty years the IFP has promoted policies which place economic growth at the forefront of efforts to raise living standards and to stabilise the socio-political environment of all South Africans. The IFP has always believed that economic growth will be maximised through the initiative of the private enterprise sector.
The IFP acknowledges that economic growth, even if largely driven through industrial expansion, is unlikely by itself to reduce unemployment levels to satisfactory levels. The IFP therefore supports development of a special job creation programme to offer answers to this serious problem.
Growth, employment and redistribution programme
As the IFP’s socially responsible free market policies are substantially represented in the government’s Growth, Employment and Redistribution (GEAR) programme. The IFP has thus lent its support to the employment of GEAR.
Due to inept management however, GEAR has thus far experienced a tentative and piecemeal introduction, during which time much of its initial potential to promote economic growth has been lost. In the interests of recapturing this potential, the IFP strongly promotes a more committed approach towards the basic requirements of economic growth policy.
Revitalising the economy
Essentially, the IFP advocates a four part re-prioritisation of official economic policy. This approach, as derived from the IFP’s comprehensive economic policy document, is summarised as follows:
Attracting increased levels of direct fixed investment
The IFP proposes actions which would produce an improved international investor environment, and thus significantly expand the country’s industrial base. The IFP advocates policies, which in general terms, will promote:
- greater macro-economic stability through strategic fiscal and responsive monetary policy initiatives,
- less government and less regulatory involvement in the economy – including extensive privatisation,
- purposeful fixed investment by government itself, and
- more effective incentives to potential investors.
Facilitating the competitive development of business in South Africa
The IFP would provide more sensitive and stimulatory support to business so as to significantly increase the country’s share of domestic and international goods and services markets. This is vital, if South Africa’s economy is to perform at the level necessary to succeed in the advancing era of economic globalisation. IFP policy aims to capitalise on local comparative advantages, to reduce debilitating competitive weaknesses and to be generally facilitative and supportive of export businesses. The IFP therefore promotes:
- further strategic liberalisation of domestic trade and of financial markets (including further regulatory rationalisation and less state involvement in the economy);
- the availability of capital for small and medium sized enterprises;
- an education system which provides human capital that can add value to the main stream economy;
- greater labour market flexibility;
- supply side measures which expand and accelerate productive economic activity;
- lower income taxes;
- effective competitions policy;
- government capital expenditure on infrastructure; and
- government sponsored support functions i.e. general information, new market research,
- product and manufacturing process research.
Managing the high expectations and demand for social delivery
IFP policy addresses the counter productive and destabilising potential of the current expectation levels amongst large parts of the population. The IFP believes that a greater social return will be attained in the medium and long term if, in the short term, the national budget focused more on the promotion of economic growth. Therefore, in the interests of ultimately meeting the deserved needs of the disadvantaged majority, it is imperative that government becomes more responsible and courageous when actively motivating for greater patience and self-reliance. The government must create a greater public awareness of both the country’s predicament and the medium and long term initiatives which are aimed at alleviating this predicament. None of the world’s successful economies were able to establish their high growth paths without this public awareness and commitment.
Introducing more cost effective fiscal management in government
The IFP has identified a number of very serious weaknesses in government expenditure practices, resulting in the loss of billions of rands each year through waste, inefficiency and dishonesty. In order to avoid such losses, the IFP proposes the use of more appropriate state accounting and management practices. These would lead to large cost saving opportunities and better use of under utilised state assets. This in turn, would allow for:
- A reduction in taxation rates;
- Improved redistributive trends;
- Added resources through which to stimulate productive economic growth; and
- A faster reduction of state debt.
The above IFP policy outline offers a more comprehensive, systematic and purposeful approach than that presently employed.