Javier Milei’s radical reforms in Argentina showcase the power of bold governance. By slashing government spending and halving ministries, he curbed inflation, achieved budget surpluses, and revitalized the economy. South Africa could draw lessons, trading red tape for economic freedom. Bureaucratic bloating stifles growth, from spaza shop regulations to the looming National Health Insurance Act. It’s time for decisive cuts to foster entrepreneurship, reduce corruption, and create space for real progress. “Cut! Cut! Cut!”
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By Vivienne Vermaak*
Javier Milei, the chainsaw-wielding economist turned president has taken a chainsaw to government spending in Argentina, literally and figuratively. It seems to be working. His radical austerity measures have turned the Argentinian economy around, with just enough social support to prevent full-scale rioting. Inflation has decreased and he has achieved budget surpluses for the first time in years. His libertarian agenda is clear: smaller government, less red tape and fewer restrictions on trade. Milei got rid of 9 government departments. ‘Out’, ‘out’ ‘out!’ he promised in his campaign videos and delivered, cutting the number of ministries by half. The ministries of Transport, Public Works, Science, Territorial Development and Habitat, Culture, Environment, Tourism, Livestock and Agriculture, and Women’s Affairs are no more, together with approximately 7,000 jobs. This could be a lesson for South Africa, which would do well to apply a firmer hand regarding budget.
The GNU (Government of National Unity) has resulted in a more hopeful and stable outlook for South Africa but has brought about more ministers. Chainsaw politics might be a double-edged sword for us at this stage. Yet, approaching the tangle of red tape strangling our businesses with a panga and some purpose will free up our economy. We can start by cutting off at the knees the new government order that all spaza shops must be registered. Not only is this proposed registration process administratively burdensome, but it will stoke xenophobic sentiments and make it more difficult for people to take care of their families. It’s another outrageous example of government overreach that reeks of sinister authoritarian motives posing as support. Our spaza shop network is the lifeblood of the small business network in the country. They supply affordable and convenient food options to our township areas and glue our communities together, often acting as credit facilities and caretakers. The lower their running cost, the cheaper they will sell their goods in acts of competition with other spazas who do the same. It works against the people of this country if you add expense and threat to running costs. Governments should be making it easier for people to take care of themselves, not harder. Hurting spaza entrepreneurship in any form will interfere with generational wealth and learning happening spontaneously and free of charge to the state. Stop the red tape! “Out! Out! Out!” The individuals checking and issuing licenses for spaza shops would be put to better use better working for the spaza instead. Maybe someone can come up with a pedestrian Checkers Sixty60 type of plan? Call it ‘Spaza2Urdoor’ or something clever. More money, productivity, and positive growth will be generated this way than by adding more punishing paperwork and people who police it. “Snip! Snip! Snip!”
Milei’s performance has been nothing short of miraculous, especially considering that he has managed to keep an already poverty-stricken population from overthrowing him and taking to the streets. Perhaps his most remarkable achievement as a politician is his honesty. He outrightly told the Argentinians: “There is no money.” South African politicians adopt the opposite tactic. Milei explained that the government is not your parent. He said that families should take care of themselves. (He then propped up certain social support initiatives just in case.) Inflation is down, growth is up and the international community is looking at Argentina with their investment fingers showing a bit of an itch. In South Africa, we seem to be going the other way. The ANC is telling people: “You cannot do anything by and for yourselves. We must control your every move. We are robbing Pieter to pay Paul Mashatile – for your own good.” Our government is not only suggesting that they increase social grant payments, but that all citizens will receive a type of medical aid package soon using the National Health Insurance Act. Whatever good the GNU might have done will be slashed and dismembered by this course of action. Fire up that chainsaw; get rid of the NHI. “Chop! Chop! Chop!”
Then, continue hacking away at bureaucratic bloating. Start with victimless crimes. Much of traffic laws and the self-replicating loops of admin, corruption, and costs they cause will disappear if we don’t put so much emphasis on renewing car licenses, as one small example. The bribery, and unnecessary clogging up of our court system will make way for those officers to do more important work in law enforcement. Afriforum argues that fining drivers for not renewing licenses might be unconstitutional in the first place, so lancing that boil will set a good example of healthier government spending.
In Argentina they are starting to see the first investment announcements in the energy and raw materials sector and an expansion of rental supply due to the relaxation of tenancy law. South Africa needs wins like these. It requires the courage to sever ties with the concept of the nanny state. Budget cuts should be quick, clean and firm, if not by chainsaw then a pocket knife or scalpel, but the instruction seems clear: “Cut! Cut! Cut!”
Read also:
- A year of Milei’s radical reforms: A test of Argentina’s resilience – Katzenellenbogen
- Argentina’s $10m severance battle: Milei’s labour law overhaul vs union resistance in senate
- Javier Milei’s fiscal tightening: Miracle or mirage?
*Vivienne Vermaak is an award-winning investigative journalist, writer, and public speaker. Vivienne is a Senior Associate of The Free Market Foundation.
