Ladies and Gentlemen of the Treasury.
As previously stated, I head up a political party: Direct Democracy Forum Reg Number 936.
I previously submitted on 24/03/20, a proposal based on adopting some of DDF cornerstone policies but note that they were intended to uplift and support the demand side of the economy and only have an indirect effect on the supply side. Their effectiveness depends on the existence of a functioning supply side economy with which the demand side can interact and indirectly stimulate.
The Lock-Down from 27th March to 16th April effectively closes down much of the supply side and therefore the proposed interventions will not work as envisioned.
We are therefore proposing additional measures directed at the supply side in order to maintain a functioning supply side so that the economy does not implode during and can resume after the lock-down. The point being, that after the lock-down, which currently is intended for 21 days but may be longer, an economy supported by interventions of this nature should be able to pick-up where it was before the lock-down. In effect, business will be able to resume pretty much as usual.
In the absence of such intervention, we anticipate that the economy and many of it’s component businesses and industries could become dysfunctional, insolvent or even bankrupt, and may well be unable to resume business as usual, in some cases, if at all. The impact of this on our already dysfunctional economy could be catastrophic. The recent downgrade to junk status does not help.
Our suggestions are that:
1) All historic debt which cannot be paid for by effected businesses should be paid for by funds provided by the state, on a loan basis, to be repaid after the lock-down but without the burden of interest.
2) Funds should be provided by the state to pay for on-going operational expenses, as a grant, for all those business with fixed operational expenses (including salaries and wages) and without existing operational income, for the duration of the lock-down.
3) These interventions can be funded by the creation by the state of the necessary funds. The state could borrow but the funds would then first be created and then advanced by the lenders at interest. Better for the state to create the money themselves without the burden of interest. Perhaps there should be a disaster recovery insurance to give effect to future interventions.
The rationale behind these interventions and behind the state needing to step up and support the economy in this manner, is that the circumstances surrounding the lock-down are not a consequence of economic malfeasance on the part of the businesses making up our economy, but rather of the extraordinary circumstances and responses of the economy and government to the Covid19 pandemic, irrespective of how rational those responses may or may not be, so it makes no sense to burden the players in the economy and jeopardise the businesses and the economy itself any further than they already are. These extraordinary circumstances need an extraordinary response.
While I do not know what the costs of these interventions would be, I believe that the economy should be supported at whatever cost is necessary, while avoiding the unnecessary burden of interest bearing debt, so as to survive until, and regenerate itself after, the threat of Covid19 subsides.
Further details are available at our web site, http://ddforum.co.za. If you wish to discuss any of this you may contact me on +27 76 060 1973 and or at
Thank you for your attention.