John Steenhuisen, leader of the Democratic Alliance (DA), during a march to Parliament on 26 July 2023 in Cape Town, South Africa. (Photo: Gallo Images / Brenton Geach) The theory is that when you are young, you have what is called “a bad attitude”. When you are middle-aged, you are having a “crisis”. And when you get old, you are just grumpy.
I think I must have reached that point. By nature, I think I have a positive outlook. I’m definitely an optimist about the economic future of the world, unlike the global majority who think, despite great quantities of evidence to the contrary, that we are all going to hell in a handbasket. But when it comes to politicians, I’m sorry, I just get grumpy.
I’ve spent a lot of time over the years criticising the ANC. I mean, you know, if you face facts, it's hard not to. But this morning, the focus of my grumpiness was the DA. The incident was sparked by an email from the DA in the name of its leader, John Steenhuisen. The email is really just an attempt to boost registration, but it does so in the name of the food-cost crisis.
What irritates me about this is that the ANC might be responsible for an awful lot of things, but the one thing it's not responsible for is the sudden, global increase in the price of food, except of course tangentially through its mismanagement of Eskom.
Global food prices moved from a base of about 90 in early 2020, with 100 being the long-term aggregate, and they then just exploded, reaching a peak of 160 towards the end of last year. Prices have been coming down since, a bit slower in SA as it happens, than elsewhere.
The reasons are well known; the Covid crisis wreaked havoc with global food production and distribution, which was then exacerbated by Russia's war on Ukraine and the global climate crisis. All this was made worse by government-backed direct financial support in some rich countries, which boosted expenditure particularly in the US, which put pressure on food supply. This is not a food production problem; it's a supply and demand problem. But this 160 level has never been seen before, so it really has been a very unusual global phenomenon.
In some senses, you could argue that the SA government has been really seized by the issue, and has tried a whole range of measures to get prices down. The global figure is down to about 120, which is still very high by recent historical standards. In SA, there is currently an investigation about food prices by the Competition Commission. There is a lobby group trying to get supermarkets to sell some products below cost, or at least no higher than breakeven.
One concrete action the government has taken is to reduce the import tariffs of chicken. You can tell this has been effective because one of SA’s big chicken producers, Astral, has just announced its first interim loss. Government is generally supportive of the SA chicken industry, but in these circumstances, the plight of the consumer took precedence, and I think rightly so.
The DA’s solution to the food crisis is to demand that the government expand zero-VAT rating to the food basket by including bone-in chicken, tinned beans, peanut butter and baby food. Fine, but actually this demand has been around for years now, and the economics behind it is questionable. Treasury has actually looked at the issue, while economists have long ago come to the conclusion that zero-rating chicken would not make a significant difference. Chicken is only about 4.4% of the expenditure of poor households, so VAT would be around R154 a year. The social security grant is double that per month, so it's definitely a more effective food-cost mitigator.
What the DA is doing is this slightly ungainly mixture of latching on to a genuine issue, but also playing bandwagon politics. I mean, fine, you know, it's an opposition political party, what do you expect? But at least find solutions that are actually genuine.
I get the same sense from the DA’s response to the mini budget. Dion George, the DA’s Shadow Minister of Finance, does make one very important point, which is that the mini budget presented no effective plan to accelerate economic growth. But then he fails to articulate what the DA’s plan is.
So many of the other points about the budget strike me as miss-cued. The press release says the government has demonstrated a “clear disinterest in having South Africa removed from the FATF greylist as fast as possible”. I just don’t think that is true - and neither would it make sense for the government to be “disinterested” because being on the FATF greylist increases borrowing costs, and those are just going skyward in a rocket-like fashion.
It's not all terrible, but it just strikes me as kinda lightweight, particularly if you consider the DA is technically supposed to be representing the grand traditions of liberalism. For example, there is no criticism of the proposed tax increase. I just have this tiny inkling that DA voters, and South Africans in general, would probably prefer to not pay even more tax, but, you know, I might be wrong.
I think what has happened is that a lot of the DA has slid into a very oppositional space, where few members really engage and think about the issues of the day because broad, generic criticism does suffice.
There is no chance the DA will have to implement its policies on a national level, so why not just be the party of maximal critique? The party’s political weakness encourages an off-handedness.
Maybe I’m naive to expect more, but if you consider that populist leadership is a failure, then wouldn’t that mean populist opposition is lacking too? I certainly think so. DM