A fiscus for better economic and social development in South Africa by Francois Stofberg

After showing that the bulk of government expenditure is unproductive, we consider the impact of an alternative fiscal policy mix in South Africa. The alternative suggests freezing the real government wage bill for five years and using the savings generated by this decision to increase spending on a specific, productive, and wealth-creative expenditure item, aggregate investments. By indirectly contributing to greater levels of investments we show how government can generate better levels of economic performance and social development. To analyse the economic consequences of the suggested fiscal policy mix we use TERM-SA a dynamic, regional computable general equilibrium model of South Africa. We also add additional features to provide more accurate and detailed results. Our results show that a wage freeze can increase both real GDP (5.9%) and employment (456,00 jobs) in the long-term. Francois Stofberg joined the Efficient Group (EFG) in 2014 as an Economist where he was groomed by Chief Economist Dawie Roodt. Together they have produced research on many macro-economic, political-economic, and market-related topics. Francois also played a critical role in the “Economist of the Year” award which Dawie received in 2015. Francois fulfils a dual role at EFG and acts as Head of Sales of Efficient Private Clients (EFPC), a boutique investment subsidiary of EFG. In this role he sets and drives the sales and marketing initiatives. He is also an active participant on the investment committees of EFG.