The EE Amendment Bill is Verwoerdian - Helen Zille

DA leader says her party is the party of broad-based economic redress

The DA is the party of broad-based economic redress

Note to editors: This is a speech delivered by DA Leader Helen Zille at the Cape Town Press Club today.

Ladies and Gentlemen, 

In 2014 South Africa will celebrate the 20th anniversary of our first democratic election. It deserves to be a great celebration, because South Africa is a much better place today than it was under apartheid. But we should prepare for an even bigger celebration on 8th May 2016, the 20th anniversary of the adoption of our Constitution. Democracy is, too often, conflated with elections.

While free and fair elections that reflect the popular will are essential in any democracy, they are only one component. The foundation of any democracy is a rights-based constitution that regulates how power is used, held to account, and changed by peaceful means. Our Constitution is regarded as one of the most progressive in the world. It is our nation's compact with each other. It defines how each one of us can be protected from power abuse, even as the majority has the right to govern while it enjoys a popular mandate.

The Constitution is not perfect, and many people will have components that they would like to change. We do change the Constitution; but we have bought into it as a package deal and we can't excise the bits that we feel like excising. Once everyone starts doing that, our compact will unravel.

Without reservation the DA supports the equality clause in the Constitution.

There are those people who attack us for doing so. They say it is not liberal. They accuse us of wandering away from our liberal roots by doing so. I say - in the language they often like to use - poppycock. Nonsense. 

No-one owns liberalism. As Tim Cohen argues in the Financial Mail today, and I agree, "affirmative action lies in a grey zone at the intersection of two great pillars of liberal thought: individualism and equity." It puts the rights of each individual first: to define who they are, to have their rights and freedoms protected and their opportunities broadened, so that they can become the best they can in life.

As for the DA, we unashamedly believe that the state has a role to play in redressing the past policies that have had such a profound effect, over centuries, in preventing people from fulfilling their potential and becoming the best they can be.

The question is what is this role exactly and how can it be implemented effectively without entrenching race classification permanently in our society. The crisp question then is: how do we use redress as a bridge to a non-racial, much more equal society? 

This is a very difficult question to answer but anyone who is committed to non-racialism, as we are in the DA, needs to grapple with it. And that is what we are doing. 

I was very interested to read in the newspaper yesterday that Trevor Manuel is also grappling with it and over exactly the same issue that has dominated headlines over the past few weeks.

In a formal lecture he addressed a profound question to his own organisation, the ANC. He asked: "Can we claim to be non-racist and look beyond the norms of the Employment Equity Act that ascribes "designated groupings" to definitions that appear to approximate the pencil test?"

That is exactly the question with which the DA has been grappling. And it is a very difficult one for all South Africans who are honestly seeking ways to redress our racist past, in a way that will provide a bridge towards a non-racial future.

We do not believe that "formalistic" liberalism does so, and certainly not within the time frame in which we have to achieve economic inclusion before the ranks of disaffected and marginalised youth reach such proportions that the checks and balances of our constitution cannot contain the groundswell of anger. We do not have another 5 or 6 decades to wait. 

Which brings me to the next document, that many formalistic liberals also reject, but that the DA supports: the National Development Plan. It is certainly not perfect, and there are bits we would like to change, and no doubt every other party would too. But amazingly at this stage of our democracy, it is a document that every party in parliament has accepted and supported.

It gives us a framework in which to implement strategies to address our challenges in a reasonable time frame - 2030. If we haven't done so by then, it will be too late.

What does the NDP say about affirmative action, employment equity, BBBEE, corrective action, or whatever name you wish to give it?

P.138 (under Economic Transformation)

The fundamental acceptance that opportunity was distorted by apartheid and that rectifying this is a logical, moral and constitutional imperative.

For at least the next decade, employment equity should focus mainly on providing opportunities for younger people from historically disadvantaged communities who remain largely marginalised. More specifically, race and gender should continue to be the main determinants of selection. This will ensure that society is able to utilise the totality of the country's human resources, and also help improve social cohesion. It will be critical in this regard to put in place a more robust and efficient monitoring and enforcement system.

The Employment Equity Act (1998) states that if two candidates have the same qualifications, similar competencies and experience, then the black person or woman should be selected. The act does not encourage the appointment of people without the requisite qualifications, experience or competence. If these provisions were implemented consistently and fairly, the act would enjoy broader support and appeal among citizens.

The intention of the act is to encourage firms to develop their own human potential. This requires spending time and resources mentoring and developing staff. Staff training, career-pathing and mobility in the workplace will grow both the person and the company. South African employers spend too little on training their staff and investing in their long-term potential. If more staff were trained, the economy would do better and the incentive to job hop would be reduced. The government may need to review the present incentive structure embodied in the Skills Development Act to ensure higher spending on staff development.

We agree with this view.

So you could say that we have a broad national consensus on the Constitution and the plan for implementing its vision.

That is a good place for any country to be in.

The problem is that the government isn't implementing it. It is too divided.

The real scandal of the past two weeks is not the DA's dilemma about the two Bills before Parliament. The real scandal is that one of the Bills (the EEA) and the Codes of Good Practice produced under the other (the BBBEE Act) contradict the plan South Africa has just accepted. I also think a strong case can be made for it being unlawful and even possibly unconstitutional. It certainly undermines the spirit of the constitution and the letter of the law.

Although the EEAB says clearly in section 15 that the equality clause in the Constitution does not involve setting rigid racial quotas, the amendments to this Act, in parliament (that the DA inexcusably supported), take us firmly into the realm of quotas.

All the reasons for not being able to reach a target (such as the absence of certain skills) are now subject to the discretion of an official, who can impose national racial demographics on any enterprise. And believe me the clause on women is next. The new Women Empowerment and Gender Equality Bill that has just been tabled in parliament is more social engineering that is unconstitutional and will have the opposite effect to that intended.

But under this kind of thinking, any form of racial preferencing is justified. This is not progressive. It is Verwoerdian. It takes us back to the era of race classification, segregation, imposed quotas, draconian enforcement, and inspectors. It cannot lead us to a non-racial society, not even as a transition mechanism. It would be hard to justify it even within the equality clause of the Constitution.

The Broad Based Black Economic Empowerment Amendment Bill offered, for a brief period, the hope of a different approach. For a moment it looked as if it could serve as the bridge of redress that can lead to non-racialism.

Fundamentally, the Bill seemed to rest on the acknowledgement that the past approach has failed dismally - after all, we have spent R500-billion over the last decade on empowerment transfers, with pitiful real empowerment results.

The idea of an incentive based system of codes that offer real broad based empowerment is, in our view, a perfectly appropriate role for the state to play. 

However, it must be said that we were very worried about the core of the Bill which still relied on definitions of race that, as Trevor Manuel said: "appear to approximate the pencil test."

That is why we presented our own model of the codes that could almost entirely be implemented non-racially, and that would be truly broad-based.

Our public representatives went to see Minister Rob Davies in March of this year to set out our objections to the draft codes and to make proposals for how they could be radically improved to achieve truly broad based empowerment. We argued that the codes should be in line with the National Development Plan, and we received assurances that the final codes would be. 

That is why we supported the Bill at that stage and we make no apology for that.

But when the codes came out (after we had given in principle support to the Bill in Parliament) they were a disaster - in fact, they actively reversed the cause of broad based empowerment and strengthened the hand of those who abuse BEE for narrow elite enrichment. As one journalist described them, they were a total victory for the tenderpreneurship lobby. 

So we responded appropriately by withdrawing our support when the Bill came to the NCOP. This is contradiction at all.

Now we sit with a Verwoerdian EEA Bill, and Codes that will drive away investment. In other words, the very opposite of what the NDP envisaged.

We will make this point again and again: The government does not take this plan seriously.

If it did, it would not even propose laws and regulations like this.

Now, from this, it must be absolutely obvious that we are not the "ANC-lite". Such descriptions are trite, superficial and ignorant. The ANC should more appropriately be compared to Verwoerdian racial nationalism.

Our detailed plan to give effect to the imperatives of the Constitution and the National Development Plan are set out clearly in our Policy for Economic Inclusion and in our Jobs and Growth Plan.

I was absolutely amazed recently when we saw research modelling conducted by the National Treasury and the Reserve Bank which showed, that if the core elements of our plan were implemented, we would achieve 8 % growth by 2025, and that if we did so, we would create 5.8 million new jobs and unemployment would drop to 11%.

Of course it is true that growth on its own will not resolve our problems. But they are the essential pre-requisite to increasing opportunities for all.

We also recognise that true redress will require a "whole of society" effort. It is not just up to business. Government has a critical role to play. I am the first DA leader who has had to enact DA policy in office. This has given us a unique insight into how the levers of government can best be pulled to achieve social change.

When the DA won the City of Cape Town in 2006, we immediately opened up the supplier database to all. Where City work had previously been almost exclusively ‘reserved' for companies owned or fronted by ANC cronies, after we opened the procurement doors, the proportion of companies owned by historically disadvantaged individuals (HDI) doing business with the City doubled. 

We did the same in the Western Cape after the 2009 election. From January to March 2009, the ANC provincial government awarded bids to the value of R886 million, of which 40% went to HDI-owned companies. By comparison, from January to March 2011, under the DA government, tenders to the value of R776 million were awarded, of which 89% went to HDI-owned companies.

In 2009 the average pass rate for the NSC examinations in Khayelitsha schools, for example, was 53.6%. By 2012 it had risen to 70.2%. Even more encouraging is the decline in the number of "underperforming" (an NSC pass rate of 60% or less) Khayelitsha schools from 15 in 2009 to just four in 2012. This has been the result of targeted interventions aimed at improving education quality, and the results speak for themselves. This is broad-based empowerment. 

The most recent example is the delivery of the new world-class Mitchells Plain hospital which was delivered on time and within budget, and with a massive empowerment impact.

Almost half of the R600-million budget was spent on goods and services supplied by HDI-owned contractors. And over R25-million was disbursed to local labour. During the construction process, 42 local contractors from Mitchells Plan and 28 local contractors from Philippi worked on the project which created 5,622 job opportunities. Of these, 3,169 local youth had their first employment experience on the contract and 100 local workers were given project management training. It has been a lasting legacy project in terms of jobs and skills, and the community has an outstanding facility.

This is the DA's policy in action, and it is producing better and more sustainable genuine empowerment results than anywhere else in the country.

So, I ask you, whose plan is really progressive? 

The DA's is. Our plan leads to real redress, and it's been proven to work. And it is predicated on our core pillars of diversity, delivery, redress and reconciliation. 

Issued by the DA, November 14 2013

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