The following statement was delivered today by DA Leader, Mmusi Maimane MP, at a press conference at Parliament, Cape Town. Maimane was joined by the DA’s Head of Policy, Gwen Ngwenya MP, and DA Shadow Minister of Labour, Michael Bagraim MP. The accompanying document can be accessed here.
South Africa currently finds itself in very peculiar and trying times. While we have recently seen a change in leadership – and the euphoria and hope that has brought with it – the reality is that the living conditions of ordinary South Africans remain the same. We live in a nation of two halves – those who are included in the economy and those who are not. It is those left behind, and left out, who are our number one focus. Everything we do as a party must be geared towards creating opportunity for these South Africans to improve their lives, and the lives of their families and loved ones.
The reality is that for many South Africans, life is still too difficult. Millions of our people are excluded from the economy, from owning property, from access to quality health care, from education, from living without the fear of crime, from fair access to government services and private sector opportunities. Too many South Africans live on or below the poverty line, homeless and excluded from society itself with little or no chance of an avenue of relief through meaningful social development initiatives.
It is with this reality in mind that the Democratic Alliance (DA) went into our biggest and most diverse Federal Congress – which was held on the 7 & 8 April 2018 in the City of Tshwane, the nation’s Capital. As a party of government – governing for over 16 million South Africans in more than 30 cities and towns across the country – the adoption of resolutions took centre stage at the Congress.
As a party, we have set some key objectives heading into next year’s election. We remain focused on the future, and on ensuring we grow our economy to include those who are left out and left behind. For this to happen we must position South Africa as the number one destination for investment, we must focus on cities as the primary drivers of economic growth, and the state must not be the first employer, but the last.
The resolutions before Federal Congress build on, and extend, the DA’s policy offer for creating an inclusive society – one in which opportunity is created for those left behind, particularly the almost 10 million unemployed South Africans.
More than 50 resolutions were considered by Federal Congress, each seeking to address the many issues confronting the people of this country. The resolutions provided practical and feasible solutions to address job creation, access to jobs, and the economy; basic and higher education; land; housing; and health.
In the end, Federal Congress adopted 18 strategic resolutions that will form the basis of our manifesto offer ahead of the 2019 General Elections. The adoption of these resolutions clearly places those left behind – particularly the jobless – as the DA’s number one priority. The resolutions are as follows.
Jobs and the economy
On access to jobs, a DA National Government would assist young disadvantaged South Africans in finding work by:
- Introducing a Jobseekers’ Allowance with a timeframe for all unemployed young people aged 18-34 who do not have a job;
- Rolling out a national Job Centres project – known as the Khuphuka Centres – where unemployed people can access job opportunities (including learnerships and apprenticeships) on a local database, get assistance in preparing job applications or receive employment counselling;
- Introducing a National Civilian Service year to provide work experience for the approximately 78 443 unemployed matriculants – from the class of 2016 alone – to enter into work-based training in the community healthcare, basic education or SAPS fields; and
- Expanding the Expanded Public Works Programme and giving more people access to these opportunities by making the system fairer and more transparent.
- Develop a basket of incentives, across multiple sectors, to encourage industries to take up more labour-intensive production practices. Such incentives could include, among others, rewarding those businesses who increase their staff components with BBB-EE points or corporate tax cuts/rebates per worker.
On the positioning of cities as the primary drivers of economic growth, the DA resolved that:
- South Africa’s national economic growth agenda must be aimed at strengthening the competency and capabilities of local governments to drive growth and job creation;
- South Africa should simultaneously decentralise public finances and stimulate regional competition by giving local councils a share of revenues generated through corporate taxes of local businesses;
- Skills development must be aligned to the needs of local economies; and
- Tax Increment Financing (TIF) is to be utilised as a tool to encourage investment to secondary cities.
In order to foster job-creation, we resolved to unleash South Africa’s entrepreneurial potential by:
- Introducing 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 which are also labour absorptive;
- Exempting small businesses from certain labour and BEE laws to help them compete and create jobs;
- Implementing a Tax Amnesty for small businesses and working with all arms of government to decrease the time it takes to pay its debts, with a goal of bringing this period down to 30 days;
- Providing funding assistance for small businesses totalling over R1.5 billion; and
- Expanding support and incentives for youth, informal sector businesses and cooperatives to grow and hire more employees.
Land
In terms of land restitution and redistribution, we resolved to:
- Commit to protecting not only clause 25 of the Constitution but the inclusive and continuous extension of private property rights to those excluded in the past – as is inherent in clause 25 of the Constitution;
- Commit to promoting the pursuit of justice and redress in land reform – not by making the state a proxy for land ownership – but ensuring that those entitled to land receive it in the form of direct ownership with adequate support to be economically successful;
- Refuse to allow the continued notion that land reform should not also include urban land by ensuring that beneficiaries of state-subsidised housing projects receive their title deeds quickly and efficiently;
- Commit to not allowing land reform to be used as a divisive and racially charged lightening conductor to pull public attention away from the failures of government by actively correcting untruths meant to achieve this end; and
- Commit to the development and implementation of land reform and land tenure policies that extend property ownership, attract investment, create jobs in the form of win-win partnerships and helps our nation to heal to divisions of the past.
- Provide those who live on communal land with tenure, and where possible, title deed. It is vital that tenure for communal land is regularised to avoid confusion and/or double dipping on a National housing list.
Moreover, we resolved to support:
- The removal of pre-emptive clauses from RDP titles;
- The conversion of all previously-disadvantaged occupied council urban plots to full ownership;
- The transfer of superfluous state land to the homeless – free of charge. Land can be transferred into full and immediate ownership under secure and unambiguous title that can be easily sold, mortgaged or let; and
- Amend the Subdivision of Agricultural Land Act of 70 of 1970 to allow for financial support of smaller and affordable plots of land – so as to allow farmers to give freehold title to farm workers residents on their farms.
Housing
On access to adequate housing, the DA resolved to:
- Give people ownership of the land they live on by giving them title deeds;
- Create a single, national housing list, which every local government’s housing list must reconcile with, to cut down on corruption and the possibility of benefitting twice; and
- Launch a national housing audit to verify that only the real owners live in RDPs.
Furthermore, we resolved to enhance access to affordable housing opportunities, through increasing the number of options people have as follows:
- Either, stay on the list for either an RDP home or GAP housing, as appropriate;
- Sign up for the Home Voucher Scheme which will give you a R150 000 home voucher (this amount should be market related to account for inflation amongst other factors), which you can use to build your own home on a government-provided site which will be connected to water and electricity– or to use as a deposit towards buying an already-existing house; or
- Choose to live in one of the new mixed income high-rise apartment buildings which will be built by the government in major urban centres, designed to enable residents to work, live, play and pray close to the cities, to bring people closer to work opportunities.
Basic Education
Noting that while there are many excellent and dedicated teachers in South Africa, there are currently over 8 million children attending dysfunctional schools where the quality of teaching, in general, is not up to standard. To radically improve the quality of teaching in our poorest schools, we resolved to:
- Roll out online and digital learning platforms to every school;
- Ensure that curricula prepares students to be productive members of society and teaches the skills which will be required when they become adults (such as a focus on practical ICT skills);
- Introduce specialist Teacher Training Colleges in every province;
- Establish a National Education Inspectorate to ensure that teaching standards are met;
- Convert struggling schools to collaboration schools, where appropriate, to improve management and teaching at these schools;
- Declare principals, cleaners and food providers as providing ‘essential services’ at all schools where they are full-time employees.
- Ensure the appointment of senior positions at a provincial and national level require the relevant experience; and
- Ensure the appointment of senior positions at a provincial and national level require the relevant experience.
Higher Education and Training
We resolved to:
- Expand access to tertiary institutions with the rollout of a range of online courses and programmes in a variety of fields in collaboration with existing universities and colleges;
- Ensure the Ministry of Higher Education and Training provides learning opportunities for all through two streams of higher education:
- The first would focus on more academic and research-based training at public universities focusing on important research and innovation outputs such as in medicine and tech; and
- The second would be providing quality technical and vocational learning and skills development through well-managed TVET (Technical and Vocational Education and Training) colleges, work-based apprenticeships, community colleges, private training providers, skills institutes and online learning to include curricula which meet the requirements of our economy through the provision of practical courses in ICT, for example, such as coding.
- Introduce a new funding model to guarantee that no deserving student is unable to study because they cannot afford it;
- Introduce College Vouchers to allow deserving students to choose their preferred TVET college and qualification based on scarce and critical skills; and
- Reintroduce agricultural colleges in areas where the need exists.
Moreover, we resolved to create more up-skilling opportunities leading to more jobs for South Africans by implementing a new vision for the Technical and Vocational Learning and Skills Development (TVLSD) sector as well as creating a new National Skills Development strategy which will:
- Fix and revamp TVET Colleges and SETAs;
- Make use of in-house or privatised skills training for companies where possible and appropriate;
- Roll out Khuphuka Opportunity Centres to provide access to career guidance, job profiling and assistance in finding education, work and apprenticeship opportunities;
- Create new apprenticeship programmes;
- Increase the involvement of the private sector and labour organisations in training and skills development decision-making; and
- Enable a more diverse and competitive training provider market in the country
Health
In order to rectify the current challenges facing the citizens of South Africa, with regard to access to quality primary medical healthcare and availability of medication, we resolved to:
- Introduce an Expanded Clinic Building Programme in under-served areas nationwide, with an additional R2 billion allocated as a cross-subsidy for building and staffing to assist in reaching the DA-adjusted national goal of building 50 new facilities;
- Make available a further R2 billion, part of which would be used to grow medical school placements for multiple skills, including, doctors, specialist nurses, occupational and physical therapists, public health specialists and miscellaneous other professions, such as clinical associates;
- Conduct feasibility studies for underserved areas in order to assess the impact of extended clinic operating hours, and where applicable, primary healthcare facility operating hours will be extended to provide better healthcare services to the people of South Africa.
- Ensure support from all government stakeholders (such as transport, infrastructure and police) for the extension of hours at public health care clinics: and
- Provide mobile clinics for existing settlements which are not yet formalised and exist beyond a 5km radius from existing public health facilities.
National Minimum Wage
The single biggest threat to our country and its future is our rampant unemployment crisis. Today, almost 10 million South Africans currently cannot find work or have given up looking for work, and our expanded unemployment rate sits at a staggering 36.3%. The result is that our country is split into economic insiders and economic outsiders – those who have a job and those who do not. This divide is sustained by a rigid labour environment and a low-growth economy that is failing to compete on the regional and global stage. Due to this, our economy simply cannot absorb new jobseekers, while at the same time keeping the long-term unemployed locked out.
By operation, the longer an individual is unemployed and outside of the economy, the less chance they have of finding work and entering the economy. This leaves millions of South Africans without hope of ever finding a job and improving their lives and the lives of their families and loved ones.
The DA’s fight will always be for those who are left out of the economy – the jobless and the marginalized. The creation of opportunity for the millions of unemployed South Africans is our primary goal, and every policy, law or regulation must be assessed through this prism: whether it aids job creation or stifles it.
It is within this context we must consider the proposed National Minimum Wage (NMW).
As far back as 2014, NEDLAC and Cyril Ramaphosa announced their intention to introduce a National Minimum Wage. Following years of negotiations, three pieces of legislation were brought before Parliament at the end of 2017 – paving the road for the introduction of National Minimum Wage. These bills are:
- Basic Conditions of Employment Amendment Bill [B30, 2017];
- National Minimum Wage Bill [B31, 2017]; and
- Labour Relations Amendment Bill [B32, 2017].
In November 2017, the Department of Labour released the National Minimum Wage Bill that seeks to institute a national minimum wage of R20 per hour, or approximately R3,900 a month for a 45-hour workweek.
While below the working poverty line of approximately R4,750 per month, the national minimum wage is set to raise wages for about one third of the formal sector workforce. Arguably this makes the National Minimum Wage Bill the most important piece of labour market legislation since the current labour relations regime was put in place in the 1990s.
Federal Congress discussed and considered the introduction of a blanket National Minimum Wage, particularity as to how we can include the voice of the almost 10 million unemployed South Africans in this matter – as it will have far-reaching implications for those without a job.
Our first concern with a blanket National Minimum Wage – and by extension these three bills – is a procedural one. At present, the stakeholders party to National Minimum Wages discussions are Government, Business and Labour. These stakeholders have enormous collective power, and naturally, each represent their own interests in the matter. However, the voice of the jobless in completely absent from the process. It cannot be that almost 10 million directly affected South Africans were afforded little opportunity to have their say on what is a massively important policy for the economy and the labour market.
Our second concern is a consequential one. The imposition of a blanket National Minimum Wage will have the undesired effect of creating great uncertainty and volatility when it comes to the most vulnerable workers in the economy. It is widely accepted that a blanket NMW will lead to job losses, as the hand of employers will be forced to adjust to a government intervention which was not market-driven. Government openly concedes this, as National Treasury estimated that 715 000 jobs are at risk following the introduction of a National Minimum Wage. Despite this, Government is adamant to proceed.
With the most vulnerable workers in the firing line, and the unemployed standing even less of a chance of breaking into the economy, we are of the view that a blanket National Minimum Wage is unfeasible, no matter how politically convenient it is for the ANC.
The DA’s position
It must be stated up front that the DA supports the intentions of a National Minimum Qage seeking to protect the most vulnerable workers from abuse. Our shameful history has been one of long-standing abuse of workers’ rights for the benefit of a small group of individuals. We must not allow this trend to continue 24 years into democracy. However, we reject politicians who try to use minimum wages to buy votes.
The debate is thus about how best we protect workers from abuse, while also advancing the interests of the almost 10 million unemployed South Africans – many of whom will suffer if a blanket National Minimum Wage is imposed. We maintain that minimum wages must be sector specific to curb job losses in marginal industries such as textiles and steel, as well as those where rapid increases will lead to job losses such as agriculture, security services and domestic work.
We therefore reject a blanket National Minimum Wage in its current form. A one-size fits all approach, no matter how well intentioned, will result in job-losses. Sectoral Minimum Wages are important to ensure the rights of working South Africans are protected and to guard against the abuse of the most vulnerable members of our society.
As a developing economy on the African continent, we operate in a highly complex economic space. Within our own economy, we have a diversity of sectors and industries – each with their own unique conditions and demands. Our task is to balance the needs of workers with keeping all sectors of our economy competitive, vibrant, and growing.
Therefore, sectoral minimum wages is the most feasible option. The great benefit of setting sectoral minimum wages is that the peculiarities and challenges of different sectors of our economy can be taken into account.
The DA has proposed the establishment of an independent panel – that cannot be unduly influenced by politicians, big business or big labour unions – mandated to set minimum wages for each sector, taking into consideration all relevant factors, including the need to create jobs. This approach would allow, in some sectors, the setting of a minimum wage higher than that proposed, while protecting the vulnerable in our economy.
Lastly, we believe that we need to exempt students, the youth and interns from minimum wages as well as workers applying for jobs in small, micro and medium-sized enterprises (SMMEs) in order to help people with no experience get their first job. Our challenge is to break down the barriers to entry into the economy. Millions of South Africans are blocked from finding work as there often exists a huge discrepancy between what they can offer and what an employer is legally forced to provide.
To mitigate the effects of a minimum wage on the unemployed, we have put forward the idea of a Job Seekers’ Exemption Certificate (JSEC), which is a document giving a person the right to take a job at a wage they find acceptable. This document would be available to any person who has been unemployed for an uninterrupted period of 12 months or more, and would be valid for two years.
A National Minimum Wage is likely to pose a further barrier to entry into the labour market particularly for those who struggled to find a job in the first place: youth and the long term unemployed. Therefore an option must be given to the unemployed, to exempt themselves from a National Minimum Wage, allowing them a foot into the economy. This idea was considered at Federal Congress, however no decision was taken. The DA’s Federal Council will therefore be considering it in due course. South Africa needs a solution which empowers workers without silencing the unemployed. The JSEC provides such a solution, which allow those left behind a chance to gain entry into the economy and find work.
What the Basic Conditions of Employment Amendment Bill, the National Minimum Wage Bill, and the Labour Relations Amendment Bill seek to do is replace the current Sectoral Minimum Wage approach with a blanket National Minimum Wage. While intending to raise the living standards of poor South Africans, these laws will only lead to jobs losses, and uncertainly and volatility for the most vulnerable workers. We therefore cannot support such legislation. We will be making written submissions on this matter, to ensure that the voice of the unemployed is heard.
In summary, a National Minimum Wage has significant downsides. The problems surround the inflexibility of the labour environment in South Africa and the fact that less flexible labour markets tend to have higher potential job losses than more flexible labour markets. In South Africa there is a higher cost of living and more work opportunities than in rural areas. There are also different circumstances in different industries such as travelling costs that vary. Some employers provide housing, such as in Agriculture and Domestic work, where others do not. In this environment of greater regional variations and variations across industries, and against the background of a highly inflexible labour relations environment, the DA believes that a sectoral minimum wage is preferable with regional variations, to a one size fits all national minimum wage, which is likely to lead to job losses. It would be catastrophic to see even greater numbers of unemployed pushed onto the street with an already exceedingly high unemployment rate of 36.3%.
The DA’s fight will always be for those who are left behind – the economic outsiders in society. We will continue to propose workable solutions to create an inclusive South Africa, and we will reject any measures that will unduly discriminate against those who are left behind.
The DA is serious about governing South Africa for all those who call it their home, guided by our values of Freedom, Fairness and Opportunity.