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The DA: The ill-Winde of populism amounts to tax revolt...

Defend Truth

Opinionista

The DA: The ill-Winde of populism amounts to tax revolts, secession, false promises and irrational economics

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Ebrahim Rasool is former ANC WC Chairperson & Premier. He has served as South Africas Ambassador to the USA. He has been President of the World for All Foundation and Senior Fellow at Georgetown University. He is Head of Elections, Western Cape ANC.

The Democratic Alliance is reeling. A party that has proven to be a one-trick pony is desperately grasping at every straw that could salvage its electoral hopes, nationally and provincially. Even its own think tank shows its national electoral progress being reversed and its Western Cape fortunes on the border of 50%.

The central cause of the DA’s implosion is directly linked to the implosion of Jacob Zuma and the ascension of Cyril Ramaphosa. The DA-pony has no more tricks. The quickest reach for new tricks is to borrow from the populist toolbox of its coalition partner, the EFF. Populism may well turn out to be a metaphorical sexually transmitted disease.

Let’s look at the DA cards being played in the desperate attempt to be electorally competitive: At Nasrec they prayed that Cyril Ramaphosa would not win; then they hoped for a political crisis when it appeared that Parliament would have to vote Zuma out after he initially refused to resign; then they hoped the African National Congress (ANC) would irrevocably disintegrate after Zuma’s ousting; and as they realised that Ramaphosa was here to stay, they tried unsuccessfully to connect him to Zuma without missing the irony that most DA people are successfully connected to apartheid; and as they saw no breakthrough on this front, they shifted belatedly to a new set of populist tools.

While trying to couch it in civil language, the populism is discernible. The calls include scare-mongering around the future of the SA Reserve Bank. Only seven countries in the world (and only three in Europe) have completely independent reserve or central banks.

Policy comes from government and decisions belong to the banks in all the rest. Then there was the attempted incitement by Helen Zille for a “Tax Revolt”, ignored by all except the lunatic fringe. Most people want schools, hospitals and infrastructure while deploring corruption. They want to jail the corrupt, not sink the country.

But as their fortunes plunge in the Western Cape, where they governed for 10 years with a sizeable majority, the populism knows no bounds.

Their strong-sounding call for the army to solve crime in the province was proven to be a sophisticated abdication of responsibility because the call that did work was the one for a dedicated anti-gang unit. Remember also, amid a real drought and water crisis, the DA invented the hoax of Day Zero. Behind this hoax, they hiked water tariffs up to 600% and left people devastated by arrears and blacklisting.

Now the DA suggests a version of secession as the solution to all problems in the Western Cape. The DA misleads the citizens of the Western Cape that they will, if re-elected, bring about a provincial rail service, a provincial police service, a provincial electricity grid, a provincial… This is misguided and opportunistic.

As constitutionally mandated, national government has the primary role of revenue-raising. The Western Cape has limited revenue-raising capacity and the resources required to deliver provincial functions do not lend themselves to self-funding or cost-recovery mechanisms.

First, in order to devolve national competencies to the province, the DA would require a national constitutional amendment. This would mean working with the ANC to amend the constitutional provisions, amendments the ANC will not allow because it will harm the people of the province, although it may serve a few narrow interests, especially developers who want to develop heritage and other sites crucial for the spatial reconfiguration of our city and province.

More worrying is that the DA does not seem to have a grasp of the centrality of economics to the grandstanding assertions that they are making. Statistics SA calculates that the Western Cape, while accounting for a substantial portion of SA’s agricultural products, financial services, manufacturing and trade, only contributes a mere 14% to the national economy. Gauteng contributes 35% and KwaZulu-Natal makes a larger 16% contribution. 

Even if the DA could decentralise national competencies to the provinces, the Western Cape would still have to continue relying heavily on the national economy to supplement its policy ideas — which are just a copycatting of existing ANC policy. This should put Zille’s call for a tax revolt even more into perspective.

The DA should be even more aware that the tax base in South Africa is heavily dependent on the income generated by our sisters and brothers working in Gauteng, who together amount to 40.1% of the registered taxpayers. The registered taxpayers of the Western Cape constitute only 15.4% of the national taxpayer base.

The DA’s populist electioneering around secession or a tax revolt will lead to great suffering for the Western Cape and its people, except for those who have a pre-existing privilege and rely on the private sector for their well-being. Imagine exacerbated inequality, poverty, crime and social instability in the Western Cape.

But without intending to, the DA MEC for Finance, Ivan Meyer, delivered the sharpest rebuke to his premier candidate, Alan Winde, and his populism around secession and provincialising every service.

Meyer delivered a budget with projected expenditure for 2019/20 of R67-billion. This figure does not even factor in national transfers to municipalities, social grants and certainly doesn’t budget for keeping national infrastructure going.

This figure of R67-billion is derived mostly from National Transfers (about 97%). The DA will argue that they can manage secession of the province or services if they kept provincial income tax. Well, the Western Cape’s 15.4% of the taxpayer base contributes 14% of the national income which is worth about R40-billion. This is nowhere close to the current expenditure of R67-billion, let alone the other expenditures mentioned. Gauteng’s contribution to the tax revenue effectively subsidises the Western Cape.

The drafters of our Constitution, which included President Cyril Ramaphosa, were aware of our need to redress our past. Our Constitution is designed to ensure our development trajectory is inclusive and just. That’s why Gauteng doesn’t get to keep all its income.

In our Constitution, one of the pillars that is incorporated to address legacy issues associated with colonialism and apartheid is the redistributive nature of the division of revenue. Specifically, section 214(1) of our democratic Constitution requires that every year a Division of Revenue Act determine the equitable division of nationally raised revenue between national government, the nine provinces and 257 municipalities.

This component is intended to ensure that rural and urban areas are to be given the same professional services without discrimination. Furthermore, a redistributive framework is intended to ensure that equality of services becomes a reality and that every South African is able to benefit from professional services, such as health care, housing, education and sanitation — regardless of where they lived and who they are.

If the DA-led government wants to irresponsibly secede competencies from the national government, where are they to get their budget allocation from? Should poor African and coloured citizens in the Western Cape bear the brunt of populist, irrational and incoherent policy formation?

The ANC’s National Development Plan (NDP) sets out our country’s long-term vision and for our development. This is an inclusive and well thought-out framework. Furthermore, President Ramaphosa’s Infrastructure Co-ordinating Council (ICC) and the 14 priority outcomes, as adopted by Cabinet, will be reviewed and renewed following the 2019 general elections.

This will inform budget allocations in the future years and lay our foundation for rapidly advancing our aspirations. Our country and our movement are entering an exciting period of renewal and revival.

Opposition parties are aware of the insignificant role they play and will grasp at any straw to steer votes towards them. The ANC is a dynamic and self-reflecting organisation — we will stem the tide that aims to move us away from our objectives, as embodied in the Freedom Charter. DM

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