Well, it seemed a good idea at the time
18 September 2014 07:29 (South Africa)
South Africa

Changing our political discourse: The DA's plan for growth and jobs

  • Sipho Hlongwane
  • South Africa
C:\fakepath\sipho DA plan REAL by Jordi Matas

On Saturday, the Democratic Alliance launched its economic policy document. It’s a doorstopper that says it can deliver 8% growth for South Africa. The policy proposals will be taken to the country over the next six weeks. This is a bold move designed to shift the ground away from race politics and on to the economy. Will it work? By SIPHO HLONGWANE.

Let’s be clear about one thing: the party’s new economic policy document – called the DA’s Plan For Growth and Jobs – is as much about the contestation of political ground as it is about the economy. This is why the party is sending it all over the country via a Jobs Campaign. The document’s central arguments are also a direct challenge to the African National Congress in a way that cannot go unanswered. If the campaign works, it will have convinced many South Africans that the ANC’s current policies are the reason why apartheid’s stench lingers, 18 years after it formally ended.

The preamble of the document says: “There are many constraints to growth in our country, but underpinning them all is the fact that too many South Africans are left out of the economy and are unable to make a contribution to driving growth because they can’t find work; they can’t attain skills; they can’t start businesses; and they lack access to capital assets. In short, too few people in South Africa actively participate in the country’s economy.”

The document accuses the ANC of not breaking down the basic tenet of Apartheid, the system of insiders and outsiders.

“The Apartheid government denied millions of South Africans access to economic opportunities and built an economy of insiders and outsiders, principally dominated by large state and private companies.  Eighteen years after the end of Apartheid, this basic structure has not changed, and South Africa remains a country of insiders and outsiders with Big Government, Big Unions and some anti-competitive Big Businesses on one side, and millions of ordinary of South Africans on the other,” the document says.

South Africa’s 27% unemployment (using the narrow definition) as well as the sluggish 3.6% gross domestic product growth over the last few years is blamed on this. According to the document, only 9.1% of the eligible population is engaged in entrepreneurship. “This is less than half the proportion in comparable middle-income developing countries such as Argentina, Thailand or Chile”.

The document’s proposals are typically centrist and liberal economics we have come to expect from the DA.

The document says: “Building this society requires that we break down the barriers that prevent many people, particularly young, poor and low-skilled South Africans, from finding employment. It seeks to build an inclusive society where everyone has a stake; where having a home or starting a business is not the preserve of the few, but rather a reality that everyone can look forward to.  

“It will require that we challenge established interests. The monopolies and oligopolies in both the private and public sectors that keep the cost of living high need to be tackled head-on.  

“Vested interests that seek to monopolise access to opportunity for the privileged few at the  expense of the majority – whether in the form of closed business networks, patronage politics, or protected employment for members of labour union Cosatu and its affiliates – need to be met with bold and decisive action,” the policy says.

The DA drew on lessons from countries like Brazil, India, China and Indonesia to craft this document.

The fiscal proposals include tax breaks, tax decentralisation, shifting from consumptive to productive investment. The party would also break down labour market barriers by incentivising business to hire more people through schemes such as the youth wage subsidy, a “fairer” relationship between work and pay (which also includes interventions at the executive level) and changing the laws governing the labour market to introduce more flexibility. 

The party also puts emphasis on delivering quality education, since South Africa already spends about 20% of its national budget on national education, with more than poor results.

Diversity in the economy would be encouraged by increasing budget allocations to the competition authorities and the National Consumer Commission, and increasing their powers; slashing red tape so that it is easier for new entrants to start new businesses and grow an environment that is conducive to innovation and entrepreneurship; developing a much simplified, incentives-driven industrial policy and delivering on government mandate in the economic sphere without corruption.

The DA proposes increasing the penalties for corruption across the legislative board in acts such as the Public Finance Management Act. The 87-page document contains short-term, mid-term and long-term policy proposals in monetary and fiscal policy, trade and investment, diversifying the market and generally breaking down barriers to entry.

The plan will be taken to the rest of the country over the next six weeks. Posters, pamphlets, billboards, an SMS campaign, social media and a grassroots campaign will be used to spread the message. Various party leaders will host events where they will showcase their leadership decisions if they were given the opportunity to govern nationally.

The aspects of the document which can require action at a provincial and local level will be implemented in the DA’s 26 municipalities, the city of Cape Town and the Western Cape province. However, there are severe limitations because monetary and fiscal policy, taxation and infrastructure spending are largely controlled by national government. The party also doesn’t set policy for most state companies. Some policies, like the youth wage subsidy, have been implemented in the Western Cape already.

The DA’s campaign will put poverty and unemployment at the centre of political discourse in the coming weeks. However, party spokesman Mmusi Maimane said they had struggled before to talk to people about the economy, since most of them could not make the connection between macroeconomic decisions and their lives. The complexity of the plan, as well as its ambitious scope and language, is probably the campaign’s greatest weakness – it may prove to be too difficult a subject for a lot of people to grasp.

However, the document will square the DA up against the ANC very well – a focus on growth and freeing up the market versus state capitalism and protectionist policy. If this becomes a major debate over the coming months and years, it will decrease the opportunity for anyone to racialise our politics. 

The plan was drafted by the party’s federal chairman, Wilmot James, in consultation with various experts, and you can tell that the people who know what they are talking about were given the space to come up with an economic plan. It is a big answer to the question of solving our poverty, unemployment and inequality. How far the party has come since the days when “Stop Zuma” was a central election campaign strategy, but how far they will go with this plan remains to be seen.

Read more:

  • The DA’s Plan For Growth and Jobs in the DA website

Photo: Helen Zille and Patricia De Lille (Jordi Matas)

  • Sipho Hlongwane
  • South Africa


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