The shocking growth rate of -3,2% in the first quarter of 2019 compared to the last quarter of 2018
as announced this morning by Stats SA calls for urgent policy changes.
We simply can’t stand by while the government continues on its destructive economic course. The utterly dismal economic growth figures that came to light this morning are testament that current policies are not working.
The announcement was to be expected given the highest ever measured official and expanded unemployment rates of respectively 28% and 38% in Q1 2019. Measured from the expenditure side, the contraction was even steeper at a rate of -3.4%.
Government’s inappropriate fiscal and monetary policies must carry part of the blame. High income tax rates, which increased further due to bracket creep, as well as an increase in the repo rate in Q4 2018, contributed to weaker demand and the astonishingly weak economic growth numbers.
The Carbon Tax which came into effect beginning of June adding 9 cents to the cost of petrol and 10 cents to diesel, coupled with the volatile oil prices and unpredictable Rand/US Dollar exchange means consumers are going to be hit hard at the pump yet again. There are signs of a looming fuel price increase for the month of June with diesel set to increase by almost 24 cents.
UASA wants to see some of the commitments and plans that were made as part of the jobs summit held in 2018 put into action. We also want to see the government act now to save the economy by overhauling current economic policies.
Government needs to make it as easy as possible to start producing instead of importing goods. The current situation is the opposite – it is easier to import than to produce locally. Regulations and legislation are stifling job creation and economic growth. In addition, bad service delivery and legislation are keeping administered consumer price inflation high and need to change to reduce consumer price inflation sustainably, which in turn will make lower interest rates possible. Lower interest rates are necessary to boost investments.
For further enquiries or to set up a personal interview,contact Stanford Mazhindu at 074 978 3415.