Wits economics students Nadia Kruger and Michael Levin were among the winners of the Budget Speech Competition where they show cased some arguments for electricity problems and unemployment.
Kruger, a Masters in Economic Science student came second in the postgraduate category and received a cash prize of R60 000. Levin, a third year B.Com Economics and Finance student was placed third in the undergraduate category and received a cash prize of R10 000.
The competition is organised and sponsored by Nedbank and Old Mutual. Economics students were invited to submit an essay, with proposed strategies for economic growth. The competition is aimed to inspire potential, young economists to apply the theory they learn in class to the South African economy. At Wits it is compulsory for third year and honours economics students to participate.
Solutions for electricity
Postgraduates had to find solutions to South Africa’s electricity crisis while considering environmental issues and the effect on small businesses and the economy. Kruger argued that to achieve the goals of the National Development Plan to promote economic growth, an increased supply of reliable and quality electricity was necessary.
Kruger suggested that in the long run more electricity should be provided efficiently, at lower prices by independent power producers of renewable energy. A short term solution should be to keep electricity price increases gradual, to have a minimum effect on the economy. Preferential tariffs for the poor and small businesses should also be introduced, Kruger said.
Levin argued that vocational skills development were in short supply in South Africa and it had to be addressed as a short term solution.
Preferential tariffs mean that even though electricity prices for the majority of society increases, she stated, the government would subsidize prices for the poor and electricity-intensive businesses. This was important not to decrease living standards of the poor and to ensure businesses remain competitive.
Solutions for unemployment
Undergraduates had to write about the causes of youth unemployment which was particularly high in South Africa, and propose solutions. Levin, a second year at the time, competed with third years.
Levin argued that vocational skills development were in short supply in South Africa and it had to be addressed as a short term solution. Levin explained that the youth wage subsidy is useful to reduce unemployment. It provides a tax break to companies who employ people under a certain age. According to Levin, it made the cost of employing someone lower for a company because the government paid part of the wage, lowering the risk tied to employing a youth.
Levin suggested educational reform, a long term goal, involved addressing the quality of academic education. To do this infrastructure and the teaching level should be improved, internet resources should be used in schools like online textbooks and interactive websites, he said.
The competition process
In the first round, the top 20 essays were selected and whittled down to 10. The top 10 students were flown down to Cape Town in January for interviews, and the top three winners were selected in the postgraduate and undergraduate categories.
Winners were announced at the Budget Speech Competition banquet in February, held after the budget speech was presented at Parliament.
Some of the highlights for both winners were meeting former and current Minister of Finance, Trevor Manuel and Pravin Gordhan. It was also a good opportunity for finalists to network. “It was such a great opportunity to meet my fellow, young economists and to make connections with them. It was really enjoyable,” said Kruger.
Kruger described the competition as theory-inspiring and that meeting ministers, CEO’s and people who have a large impact on society inspires students to become the best economists they can be.
The winning essays can be read online at on the budget speech competition website.
The article is featured in the Wits Vuvuzela