Riaan van Heerden’s Breakfast Show, Punt Geselsradio, 18 May 1999
Time : 08:00
Rian : South Africa, although being part of the world economy is caught up in the old system, with a sluggish civil service that is costing the state millions every year. South Africa needs to get in pace with the rest of the world and to move over to a decentralised information economy that will stimulate the individual’s role in the economy and thus enhance his loyalty. Wolfgang grulke, a director of Citadel and CEO of FutureWorld, has a ten point plan to solve South Africa’s problems and that Thabo Mbeki must implement the plan within two years.
Rian : In short, this ten point plan, what are the main features of your ten point plan?
Wolfgang : well, at a basic level it is to encourage Thabo to share the issues that face South Africa, with all South Africans. In other words, to own up to the problems that South Africa faces in this global economy and to communicate to all - to really say to South Africans: "Hey! This is a problem that faces all of us, not something that i can fix on my own. In order to fix this, we need to do some radical things".
Rian. : If Thabo is listening, what would you tell him?
Wolfgang : I think at a fundamental level there are three things which an individual needs to be able to do to compete and participate in this new economy. Firstly one has to be literate. Secondly, one has to focus on English as a business language. I heard recently that UNISA will allow all its students to both study or write exams in any of the official languages. We are saying that English is one of our competitive advantages and we have to capitalise on it, focus on it, and not make our educational institutions uncompetitive in the world markets. Thirdly, we must get wired, that means especially to telecommunications and the internet. Those three things are what individuals have to achieve and the ten point plan is really to say here is ten essential things that goverment has to focus on.
Rian : If we think how late we woke up to the Y2K problem, for instance specifically from the government’s side.
Wolfgang : Well I don’t think we woke up too late with the Y2K problem, it was an issue that had a lower priority than other things that was going on in south africa. My own view is that the Y2K problem is probably going to be a damp squid. There will be patchy problems, but on the whole we will survive it quite well.
Rian : So we’ve got to get more Internet, more technology-orientated in this country, see that most people are more literate and speak English, what else?
Wolfgang : If you look at the ten points we came up with, there are two things which are really radical. Lets take the government out of education, lets take the money that is currently being spent on education and instead of giving it to schools, lets give it to parents in the form of education vouchers.
Rian : What’s that?
Wolfgang : Basically we divide up the money that is available for education and then if you have two children, you get two education vouchers to put it simply. You can then choose to spend the vouchers in the school of your choice. This will put enormous market pressure on every school in South Africa. In other words they will only attract the students (and the vouchers) if they offer relevant education that will generate economic activity and jobs.
Rian : In other words those schools will have to buy their own books, etc.
Wolfgang : Absolutely, we are not talking of spending more money. All we are saying is- give it to parents so that they will decide which are good schools. One of the things we believe is that good private schools will emerge within a year. For example we would like to see schools that guarantee employment at standard eight or matric. Commercial schools are doing that already and there is no reason why any school in South Africa should not do that. They should also start to pay teachers decent salaries. So they will attract better people from business and from other walks of life to become the best teachers and I think the school with the best teachers and a relevant curriculum will attract most students.
Rian : having spoken to the Minister Sibusiso Bengu, students are still being taught the wrong things from the guidance councillor side, he would still say we have several options, you can become a doctor or a lawyer or a auditor, but the technology side is not being looked at.
Wolfgang : Most schools, not only in South Africa educate the children to deal effectively with the past - not the future. We believe by putting in more of a commercial and market focus on it, we will turn around the focus of the schools to teach relevant things to generate economic activity. Our recommendation is to do this from the first of January next year!
Rian : So is this part of an Information Economy?
Wolfgang : Absolutely, that is an economy that is driven by information, knowledge, skills and ideas. It is an economy that anybody can participate in provided that they are literate, speak english and are wired to the world wide Internet.
Rian : Another radical thing is that Thabo Mbeki lower company tax, scrap personal income tax and replace it with super VAT. What do you mean by that?
Wolfgang : The first step in lowering company tax has already been taken. That was welcomed by everybody. Secondly, in the information economy it is becoming very difficult to tax income. So, people who work in the information economy and work globally do not produce an output, so you may have programmers doing work in Johannesburg for an American company and being paid in the Cayman Islands. It is becomes impossible for the government to detect income - thus the taxbase will shrink. In principle we say one should move from an income-based to a consumption-based tax system. One could have a 35 percent VAT which would make up for the loss of the income tax and would encompass everyone - and we could still exclude basic foodstuff. In other words if we take the lid off income tax, there will be tremendous incentive to produce and earn more, meaning people would have more money to spend on consumable goods, which is where the tax will be raised.
Rian : Thabo Mbeki, what do you think of him as a leader?
Wolfgang : I think that Thabo Mbeki is a great politician. He is quite conservative though, and what we really need is a person with the characteristics of a Margaret Thatcher. In the late seventies, Britain faced similar problems to SA today, and Margaret Thatcher restructured the economy brilliantly, her political popularity was destroyed and she lost her job in the end. Thabo Mbeki faces the same problems. He has a lot of politically incorrect things to do, but the SA economy will be transformed as a result - benefitting all!
Rian : Did you receive any answer from the Deputy President?
Wolfgang : I received acknowledgement of receipt of my letter - but nothing else.
Rian : Well, thanks, it was great talking to you!
Duration : 11 minutes and thirty seven seconds
Copyright FutureWorld 1999 All Rights Reserved