Reviewing Maimane’s 6-Point Plan to Fix SA’s Economy

Mmusi Maimane has presented a 6-point plan of what he thinks will help fix South Africa’s economy. Maimane is typically schizophrenic on policy, jumping between support for a liberal free market on some occasions while positing a racial socialistic order on others.

What follows is a point by point appraisal of his 6-point plan and an overall evaluation of the policies themselves and their ramifications.

1. State-owned entities

Maimane has rightfully condemned state-owned entities, stating:

“They are haemorrhaging public money and delivering dismal services at exorbitant prices.”

He argues that non-strategic state assets need to be sold, with the strategic enterprises being reformed to cut down on corruption and incompetence.

As a whole, this is a good point. State enterprises are a drain on the fiscus and cannot surpass the private sector as sustainable and high performing producers. Privatisation will go a long way in reducing negative government spending, corruption and the capacity for state capture.

I would, however, like to know what “strategic” means. If it means that the Army shouldn’t be privatised, then that is fine – but if it means that the state should still have a monopoly on Lenin’s ‘Commanding Heights’, then Mmusi still has a long way to go.

2. Remove red tape

Maimane wants to cut red tape that prevents job seekers, especially young job seekers, from finding jobs. Labour regulations and union interference makes finding a job almost impossible.

While non-specific about how far he is willing to go here, I am very much in favour of this point. We need to make employment viable in this country, and deregulation is the only way to do that.

3. Empowerment

On current government empowerment schemes, Maimane says the following:

“The current system has been used as a mechanism for elite re-enrichment and corruption. It imposes a heavy regulatory burden on businesses and raises the cost and lowers the quantity of service delivery to the poor. We want companies’ greatest contribution to be to society in general, not just to the elite.”

Empowerment is racist and is used merely as a tool to hide corruption behind ‘restitution’. But I fear that Maimane still thinks that some form of race-based appointment is necessary and virtuous. This is definitely not the case in reality.

On the face of it, his condemnation of empowerment projects is good, however.

4. Make SA open for business

This section starts great, with Maimane arguing that we do the following:

• Reduce corporate taxes
• Abolish exchange controls
• Remove trade barriers

This is all in an effort to attract investors to provide much-needed capital for the economy.

Where this heading falls short is Maimane’s argument that a wealth tax and estate tax are more preferable to redistribute wealth, and don’t scare investors.

No, wealth tax will scare off investors. Investors don’t like having their money stolen just because they have it. If Maimane was serious about attracting foreign investors, he would support South Africa becoming a full tax haven, with a minimal flat-rate tax.

Redistribution itself is fruitless and unjust exercise based on the false principle of equality before desert. Any tax aimed at achieving it is an illegitimate tax.

5. Be tourism-friendly

Yes, we do need to make travel to SA easier. But we must also make it safer. I’m sure Maimane will agree that we need to solve our crime so to not scare away even more tourists. Making it easier to arrive will not help matters if nobody wants to arrive.

6. Zero tolerance for corruption

“Corruption is destroying our nation and we need to signal a zero tolerance attitude henceforth,” says Maimane.

Well, yeah. Not much to argue about here. Except that zero tolerance is sufficient to minimise corruption. Corruption follows any organisation that involves a lot of power and a lot of wealth. The key to minimising state corruption is minimising the state.

You can’t loot the treasury if there is no treasury, after all.

The government is too entrenched in our day-to-day lives. And as corruption is an inevitability of government involvement, this means that our society corrupts. Thus, minimise the state and you minimise corruption.

Conclusion

Overall, this plan isn’t bad. It presents quite a few common sense free market solutions to South Africa’s woes – the right solutions. Its only pit-falls are that it may not go far enough and that I don’t think Maimane is truly behind it. Maimane’s policies tend to flip-flop, and he has stated his distaste for liberalism in the past. If the DA truly supports this plan, it will be an improvement, but I’m not holding my breath.

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