DA Federal Congress: Some Key Policy Takeaways

Just a mere five kilometres away from the Union Buildings in the western part of the City of Tshwane gathered a multitude of people with blue shirts from all over the country. The enthusiasm plunged incessantly as Democrats sang, cheered and put on appurtenances adorned...

422 0
422 0

Just a mere five kilometres away from the Union Buildings in the western part of the City of Tshwane gathered a multitude of people with blue shirts from all over the country. The enthusiasm plunged incessantly as Democrats sang, cheered and put on appurtenances adorned by catchy slogans of candidates they would prefer to lead them in the coming years.

However, if South African democracy is to mature, analysts and the electorate would need to assess the Democratic Alliance’s policy offers. The resolutions adopted at the congress present a crossing of the Rubicon for the party; it is an evolution of a party that has redefined and positioned itself to winning the power of persuasive elections.

Some of the resolutions include:

Job Seekers Exemption Certificate (JSEC) to tackle long term employment

The JSEC, which will be valid for two years after an applicant has secured it, will see the unemployed given the right to enter into employment agreements with conditions they see suitable. This means they will be exempted from the National Minimum Wage.

The National Minimum Wage Bill was passed by cabinet on 11 November 2017. It amounts to legislated unemployment.

The law prohibits employees from accepting jobs below the level government has stipulated for an hour’s work. This means that a number of free and voluntary wage contracts are now illegal. A minimum wage leads to a decrease in the demand for labour in the market, especially for low-skilled workers. It does away with the competition, thereby shutting many workers out of the labour market. According to the 2017 4th quarter Labour Force Survey, published by StatsSA, over two-thirds of the unemployed in South Africa have been unemployed for longer than a year.

The minimum wage, however, also brings with it negative effects that go beyond unemployment. Minimum wages encourage employers to resist up-skilling their workers in training, thus depriving low-earning workers of a long-term advancement.

Minimum wages create monopolies. Larger businesses may be receptive of them in the same reason they may prefer tariffs – to keep out lower-priced businesses from the dictum of free market competition. A minimum wage can become a tool by large businesses with high labour costs, to force higher labour costs on their small businesses competition rivals. These larger corporations can then bring their competition to its knees.

Enhance small business development opportunities

According to reports, about 80% of South African small businesses fail within the first three years of activity. The DA resolves to introduce an overtly pro-small business policy approach which removes blockages and red-tape in the political/economic system, particularly targeting those sectors which our country has either a comparative or competitive advantage in. And, crucially, those sectors which are labour absorptive. It aims to “exempt small businesses from certain labour and BEE laws to help them compete and create jobs.”

Resolution to include more South Africans in meaningful land reform

On land reform the party unequivocally made it clear to commit to protecting section 25 of the Constitution and support private ownership of property. The party aims to not make the state a proxy for land ownership – but ensure that those entitled to land receive it in the form of direct ownership, with adequate support to be economically successful.

Secure property rights are an important requirement of thriving economies. Full ownership of property allows people to be able to run businesses, and sell or rent out to generate income so they and sustain themselves. Commitment to property rights sends a clear signal that the DA as a government-in-waiting is serious about attracting the fixed investment needed to drive growth and jobs. Keeping to the tune, the party committed to;

Remove ‘pre-emptive clauses’ on RDP title deeds that prohibit owners from selling their homes for a specified duration.

Over 4 million RDP houses have been provided since the democratic dispensation. However, RDP title deeds still contain ‘pre-emptive clauses’ that determine when the beneficiaries (who are supposed to be the owners) can sell their houses and what modifications can be done to their property. These clauses undermine the notion that the beneficiaries are truly owners of the property – that is, the choice to decide what to do with your own house, to rent it out or run a business, or sell it, should you want to. Removal of these clauses will allow the poor generate and create wealth for themselves; it would also lessen the black market sale of these houses and speed the inclusion of the poor into the economy.

On state-owned enterprises

The party emboldened its fight against money-hemorrhaging state-owned enterprises. SOEs continue to operate at a loss. Government has committed R29.1 billion in guarantees (since 1999) to South African Airways while it continues to make staggering annual losses, the latest of which is predicted to hit a high of R4 billion in March 2018. According to the party’s Shadow Minister of Public Enterprises, Natasha Mazzone:

“Many SOEs are duplicative in terms of function and objectives, adding little value to enhancing competition as they behave as monopolies.”

The party has resolved to ensure that certain sectors of the economy dominated by state-owned enterprises or state monopolies should be subject to competition from multiple private sector entrants; and to introduce of market competition in key sectors of the economy which will be a key pillar of programmes to create jobs and strengthen the economy. The party wants commission an independent feasibility study that will examine the economic impacts of privatising particular SOEs.

If the DA hopes to recapture the imaginations of South Africans who are clamouring for a better and stronger alternative, it probably needs to continue on this trajectory. It should offer this vision. There has never been a better opportunity than this for liberals to communicate and resonate their gospel. And there is no reason why the South African future should not be a liberal one. Elections are about persuasion and not expression. It is time for the party to direct its efforts in seizing institutional power by winning elections and look beyond the good governance narrative.

In this article

Leave a Reply

Rational Standard