The Effects of Public Investment in the Green and Care Economies and Public Infrastructure in South Africa

Abstract

This paper argues that a comprehensive mix of policy tools is essential to catalyse the urgent public investment required to address South Africa's growth, inequality, care, and climate change crises. According to the National Treasury, from 2010 to 2019, South Africa's growth averaged only 1.75% annually, a figure further reduced when factoring in the COVID-19-impacted years of 2020 and 2021. Fiscal policy involves decisions regarding government spending levels, tax revenue generation, and borrowing. Since 2013, a fiscal consolidation strategy has been in place to curb public spending growth, resulting in decreased expenditures on public services due to rising debt service costs. This paper argues that increasing public spending on the care economy, green economy, and public infrastructure would boost GDP and employment, thereby altering public debt/GDP ratios. It advocates expansionary fiscal policies, clear development targets, and coordinated fiscal, monetary, industrial, labour, and social policies.