STRAIGHT TALK: SONA and Ramaphosa: the night and knight of delusion

Long and well-spun as it was, Ramaphosa’s state of the nation address can be distilled down to a single naked fact: it didn’t deliver the reforms we need to reverse South Africa’s slide into bankruptcy. It didn’t even come close.

“Gradually and then suddenly” was Hemingway’s description of how you go bankrupt. We’re entering the “suddenly” phase, with our credit set to be junked soon after Mboweni delivers his budget speech later this month.

Yet Ramaphosa missed his Rubicon moment to fix the fundamentals.

He failed to administer even the basic CPR required to stabilise the patient. If the DA were in government, this is the shock treatment we would have delivered last night.

  • Solve our energy crisis by committing to 1) break Eskom’s monopoly entirely by opening the energy market to full competition, allowing companies and households to generate and sell electricity unhindered by the state, 2) sell off Eskom’s power stations to pay off its R450 billion debt, 3) free Eskom’s leadership to drive operational efficiencies.
  • Rapidly revive investor confidence by decisively walking away from expropriation without compensation, national health insurance, nationalising the Reserve Bank, and forcing pension funds to invest in state-owned companies.

And Ramaphosa denied our economy the treatment – long prescribed by the DA – that would nurse it to long-term health:

  • Make bold changes to our labour legislation to unleash entrepreneurship and job creation.
  • Stand up to SADTU to end their stranglehold on our basic education system, so that teachers can be properly trained, monitored and incentivised.
  • Do away with cadre deployment and BEE so that the appointments and tenders are on merit and in the best interests of the poor. This would do far more to fix our health system than will NHI.
  • Devolve SAPS powers to the provinces and metros as per international best practice.
  • Commit to reining in the public sector wage bill, by freezing wages for all managers and administrators for three years and reducing the number of such managers earning over a million rand a year by a third.

Though not nearly enough to arrest South Africa’s slide, we welcome the commitment to add additional energy to the grid and to back the DA’s long-fought proposal to allow municipalities to procure their own power from independent producers.

But mostly, we were dished up delusion: a state bank when the post bank is already unable to do its job; a sovereign wealth fund when the government already spends R1000 million more per day than it gets in taxes; a smart city when most municipalities are bankrupt or dysfunctional or both; coding and robotics for kids who can’t read; a capable state with cadre deployment.

It would be funny if it weren’t ruining millions of lives and destroying our future.

Ramaphosa’s problem is that for every major policy decision confronting him, he must choose between his party and his country. Either he goes the route that provides patronage and populist support to his party (NHI, EWC, SADTU etc) or he goes the route that generates inclusive growth for South Africa.

He chooses the ANC over South Africa every time.

It’s time for South Africans to wake up. Cyril is not the knight in shining armour that came to save us. We need to build a new majority for reform in South Africa. The DA will be at the forefront of this charge.

STRAIGHT TALK: 30 years on, South Africa needs another reset

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When FW De Klerk announced the unbanning of the ANC, SACP and other organisations on 2 February 1990 – thirty years ago this week – South Africa’s “reset” button was pressed and a new era of political freedom ushered in. It required immense personal courage from De Klerk and Mandela, both of whom placed country over party.

But economic freedom did not follow. Instead, the number of unemployed has risen from 3.7 million then to 10.3 million now. This is a major national crisis and far worse is yet to come as Eskom follows SAA into a death spiral, battered by a corrupt, incapable state. Our economy teeters on the brink of collapse.

Looting, bailouts and mismanagement have spun national debt out of control, yet our government continues to spend almost R1000 million more per day than it earns. That is why it is targeting people’s property, pensions and incomes, causing ever more capital and skills to flee our shores. We’re caught in a low-growth, high-debt trap and the situation has become highly combustible.

South Africa urgently needs another “reset”. We need sweeping structural reforms – a radical change to the “rules of the game”. The DA is not alone in calling for this change. Finance Minister Tito Mboweni warned last month: “If you cannot effect deep structural economic reforms, then game over!”

It’s five minutes to midnight. Moody’s is set to downgrade our credit to junk status soon after Mboweni delivers his budget statement later this month. This will raise the cost of future borrowing and accelerate our decline, just as a loss of confidence in SAA has accelerated its descent. As it fell to De Klerk and Mandela in 1990, so it falls to Ramaphosa now. On Thursday 13 February, he will deliver his third State of the Nation Address. This is his Rubicon moment. He can continue to choose dithering over decisiveness and keep playing by the current rules of the game – in which government plays an ever-greater role in the economy and “transformation” is achieved by BEE, EE, EWC and political patronage – or he can change the rules of the game to unleash private enterprise and entrepreneurship.

The current rules are failing South Africa unequivocally and dangerously: inequality and poverty are both growing.

This week, the Democratic Alliance released a draft document titled “Values and Principles” ahead of our policy conference on 4-5 April. It is intended to be the social contract between the DA and the people of South Africa, and the solid foundation on which all in the DA can work towards a common purpose.

It is also the basis for a new set of rules for South Africa, one that would lead to an open, opportunity society for all. It envisages a social market economy in which participants (businesses and consumers) rather than government decide on what to purchase, where to invest, and how much to produce.

Mining Minister Gwede Mantashe’s announcement at the Mining Indaba this week that the government is now preparing to allow mining companies to generate their own electricity speaks volumes. It is simply crazy that we need permission from government to be self-reliant.

Mantashe also proposed a new state-owned power generation company. This is mad, bad idea. South Africa needs an energy market that is open and competitive, in which everyone capable of producing energy can do so and sell it to anyone who wants to buy it, at whatever price they agree upon.

There are plenty of Independent Power Producers in South Africa who are ready and willing to generate electricity, thereby diversifying our energy mix, and making it more reliable and cheaper. Open, competitive markets should be the norm in our society and the DA’s draft document provides the basis for establishing this. I invite you to read it and give us feedback. We have set up an online portal for public submissions, which will go live on Friday.

The path Ramaphosa chooses for South Africa in his address to the nation next week will define his legacy. Whether or not we “reset” South Africa will define our future. I believe the values and principles set out in our draft document hold the key to greater equality and real transformation in South Africa. Poverty and unemployment have been coded into our system and we can code them out with a new set of rules. It’s time to join the DA in building these.

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STRAIGHT TALK: February is the month to fight EWC

The ANC is trying to sneak expropriation without compensation (EWC) through as a benign tool of transformation. Make no mistake, it’s a potent weapon in a kleptocracy’s arsenal to subjugate and steal from the people of South Africa.

Yesterday in parliament the opposition successfully compelled the government to extend the closing date for objections to its Section 25 Amendment Bill (to enable EWC) from 31 Jan 2020 to 29 Feb 2020. This means we can unite and fight EWC for a month or suffer its consequences for decades.

The only way a successful society can operate is on the basis of secure private property rights and the rule of law. Anyone who cannot see that these core values are now at stake is frankly naïve. The EWC bill proposes cutting out the courts by transferring decision-making control around which property can be expropriated, and at what price, from the judiciary to the state. At the stroke of a minister’s pen, our title deeds could become worthless.

Amending the Constitution and legislation to give the state unchecked power to grab land and other property is a very, very bad idea. We all need to grasp the depth and scale of the risk and act swiftly. Zimbabwe’s story could be South Africa’s too if we don’t act en masse during the month of February. Hindsight is the best source of insight: we either learn from Zimbabwe’s path, or we follow it.

The state can be legally compelled to act in the national interest if society expresses its interest loudly enough in a public participation process. So, there are four actions I urge you to take during the month of February: 1) write an objection and email it to section25@parliament.gov.za; 2) sign the DA’s petition against EWC; 3) put pressure on your bank or home loan provider to object to EWC; and 4) get others in your community to do the same.

The ANC claims the purpose of EWC is to enable and accelerate land reform. But the real objective is to bring all land under state custodianship and control, to be used as a patronage tool to shore up its power and secure its access to public resources. Only the very naïve could believe otherwise.

Consider the case of David Rakgase, a poor, 78-year old, black Limpopo farmer who has had to take the state to court to compel it to sell him the land he has leased and farmed for over two decades. He won, and the state abandoned its appeal in favour of contravening the court’s judgement by offering to sell it to him at 9 times the price instructed by the court.

EWC will undermine confidence in title deeds and investment. Far from being pro-poor, EWC will be profoundly anti-poor as agricultural investment dwindles, land becomes unproductive, food shortages set in, and unemployment soars yet higher. EWC will not help the poor any more than BEE, employment equity or rigid labour legislation have. Inequality and unemployment have never been higher.

And that’s just the start of it. There’s plenty of scope for creep. After all, land is just one form of property and further changes will only need to be legislative rather than Constitutional, meaning that only a parliamentary majority of 51% will be required.

It’s already clear that scope-creep is the ANC’s modus operandi. By their own admission, the original proposed amendment (published for public comment on 6 December 2019) giving the courts control to decide on compensation was just a ruse. They’d always intended to bypass the courts.

In driving EWC, the ANC has sought to scapegoat first the Constitution and now the courts for its own abject failure to execute an effective land reform programme over the past quarter century. As no less that former president Kgalema Motlanthe pointed out in his High-Level Panel Report to Parliament, Section 25 in its current formulation in no way impedes meaningful land reform. Rather, corruption, mismanagement, lack of funding and lack of political will are the real impediments.

In other words, the ANC government itself is the obstacle, and this latest amendment proposes to vest even more power in it.

The DA-run Western Cape has a 72% success rate in agricultural land reform projects compared to an estimated 10% success rate nationally. Our urban land reform record is consistently strong, with DA governments having given out well over 100 000 title deeds in urban areas.

The DA is unequivocally opposed to amending the Constitution and we will use every mechanism at our disposal to fight it, just as we are fighting prescribed assets and the nationalisation of the Reserve Bank and healthcare.

Indeed, it would be a grave mistake to view EWC in isolation. This move is exactly in line with the ANC’s overall strategy of achieving state control over every aspect of our lives so that their feeding frenzy can continue.

Nationalising the Reserve Bank and healthcare and hanging onto failing state-owned enterprises whatever the cost to the nation, including forcing pension funds to “invest” in them, are all part of the same broad agenda of theft.

These lead not to transformation but to economic ruin. The fastest, indeed only, way to transform our society is to throw open the doors to individual ownership, enterprise and entrepreneurship by embracing the values on which these depend: the rule of law including respect for the Constitution and private property rights; a market-driven economy; and a capable state that delivers to all. These are the DA’s values and vision and our offer to South Africa.

STRAIGHT TALK: My vision for SA and the DA

This is my first weekly newsletter as leader of the Democratic Alliance. I have assumed this position at a perilous time, when our country is slipping backwards and faces the real prospect of becoming a failed state.

So I’d like to use this opportunity to set out my agenda for the DA, essentially to answer the question: What are the most effective things the DA can do to help fix South Africa and get the country back onto a path to prosperity? As I see it, there are two overriding imperatives.

First, where we already govern, we must do so to the very best of our ability, prioritizing delivery to the poorest communities. Doing so will have consequences that extend far beyond the lives of those we serve and the borders of our municipalities and the Western Cape. If DA-run areas are fixing, building, working, growing, innovating and thriving, it will reignite trust in the DA and hope in SA. This is essential, because I believe the party has a central role to play in fixing South Africa.

The DA has long been associated with good governance. The Western Cape is a well-run province by any standard and I am confident of further improvements, such as from Premier Alan Winde’s safety plan. Yet we have seen a decline in the quality of services delivered by some DA governments over the past few years. While I am DA leader, good governance will be a non-negotiable top priority.

To this end, we are working to ensure that every single DA-run government has the most capable and committed leadership available to us. Good governance starts with good, values-driven leadership at all levels of the party, by individuals who place service to others over self-promotion. I’ve taken action to replace the dysfunctional Mayor of George and will take similarly swift action against any other DA mayors or public representatives who act against the interests of the people they were elected to serve or who fail to perform to the high level expected of them.

The DA is in talks with all signatories to coalition agreements with the party, including UDM leader Bantu Holomisa, because together we have enough seats in council to take back Nelson Mandela Bay Metro from the ANC and reinstate good governance there. The UDM enabled the ANC to get into government there in the first place, so it is not an easy conversation to have. But, to my mind, the need to return NMB metro to good governance for the sake of those who live there should be uppermost.

The second overriding imperative for the DA is to build a new majority in South Africa. Ours is an incredibly diverse nation, yet I firmly believe most of us share the same core values of a non-racial society that upholds the Constitution and the rule of law; an economy that is market-driven; and a state that delivers to all rather than to a connected few. It is these values that will put South Africa on a path to prosperity.

At first glance these values may seem obvious to you, but in fact they imply some sweeping reforms that will cause short-term pain before they produce long-term gain.

True non-racialism, for example, requires that we reject race-based policies in favour of policies that treat people first and foremost as individuals, rather than primarily as members of a group. A market-driven economy requires a far lower degree of state intervention in our economy than we currently see in South Africa today. And a state that delivers to all requires government to stand up to those vested interests (unions etc) that currently benefit from the status quo, a system which favours incumbent employees and large firms while placing high barriers to new entrants to the economy.

The challenge is to get all those who share these values to work together, since we are all located in different parties, including in the ANC. We’re also located in different mindsets and many of us differ strongly on other issues despite our shared core values. Yet South Africa’s current catastrophic situation requires us to muster the same sense of urgency and the same sense of “common cause” as in 2016 when the country united, albeit temporarily, against state capture. The DA has a central role to play in this.

Our nation stands at a fork in the road. One way is the path of populism and short-cuts and appealing-sounding socialist solutions. It seems attractive to many at first glance. But ultimately it will collapse our economy and immiserate our society, locking people into dependence on a corrupt, incapable state. The process is already underway, with policies such as property expropriation without compensation, national health insurance, asset prescription and nationalising of the Reserve Bank already on the table.

The other path puts power back in the hands of people and communities. It leads to a free society, in which individuals have the freedom and opportunities to make their own living and their own choices. This path leads to enterprise and innovation and growth. It has tremendous power to transform our society, to reverse apartheid patterns of deprivation and inequality. Not through the intervention of the state into every aspect of our lives, but through the aggregated efforts of millions of free people operating in an enabling environment. It is the path to prosperity and the DA under my leadership will strive to build a new majority who will choose this path.