Excellent DA policy ideas spoilt by too much hedging

John Kane-Berman assesses the official opposition's 2019 manifesto

The best parts of the election manifesto launched by the Democratic Alliance (DA) in the last weekend in February are its simplest ones. They include "scrapping the mining charter in totality", opposing the ruling party's national health insurance plan, "immediately" placing South African Airways" (SAA) in business rescue, and rejecting expropriation without compensation. Full or partial privatisation of state-owned enterprises (SOEs) will be implemented.

A school inspectorate will be established, "foolish" government plans to give banking licences to SOEs will be opposed, and applicants for public service jobs will be made to write entrance exams. Housing vouchers will be introduced, and land reform will make people owners rather than "life-long tenants". Title deeds will be given to urban housing beneficiaries, while a DA government would work with traditional leaders to give ownership to those living on communal land.

A DA government would work with private medical aids to extend coverage from its current level of 16% to above 50%, while also developing a new funding mechanism for those not covered by private medical aids. The importance of trade liberalisation is recognised, along with the need to "minimise the role of the state".

Apart from being sound in themselves, these ideas clearly differentiate the DA from the African National Congress (ANC). But the manifesto does not live up to its promise of "doing something radically different" to create more employment. Promises of "exemption" clauses, "opt-outs", and "new" minimum wages are no substitute for the necessary comprehensive liberalisation of the labour market without which the DA's vision of "a job in every home" will not be achieved.

The proposal to lower corporate taxes for manufacturers to 15% is undermined by being made conditional on labour absorption, skills training, and corporate social investment. The idea of introducing "sector specific manufacturing incentives" is straight out of the Rob Davies rule-book. The promise to reintroduce South Africa's bilateral investment treaties with various countries is undermined by the requirement that this will subject to "conditions to ensure skills development and industry development". Nor does it make sense for a country desperate for investment to offer incentives to investors only if they "meet a minimum employment threshold".

Noting that South Africa's formal small business sector is much smaller than previously thought, the DA promises to help create more small businesses. There will be exemptions from labour and black economic empowerment (BEE) legislation for companies with annual turnovers below R30 million. However, despite the shortage of entrepreneurs, the DA's "overhauled" BEE system will reward only the creation of black ones.

The manifesto has a section headed "creating the capable state". Nowhere does it recognise the vast damage that the Employment Equity Act has done not only to Eskom and other SOEs but also to national, provincial, and local government, never mind dozens upon dozens of regulatory bodies and other organs of state. The manifesto states that South Africa "desperately needs skills" but it fails to recognise that this Act means that the employment of white (and often Indian and coloured) skills in the public sector is subject to racial demographics. It does, however, mention that "racial quotas" will be removed in determining access to medical schools – "while still ensuring diversity".

The promise to "scrap the mining charter in totality" is the boldest thing in this 80-page document. But why stop there? The mining charter is only one of a number of charters and codes established in terms of BEE and other legislation. In the pursuit of what it calls "economic justice for all" the DA promises to simplify and overhaul the BEE system. Perhaps a DA government, having scrapped the mining charter, would then be willing to see all the other charters follow the mining one on to the scrapheap.

Although the manifesto promises the removal of red tape via a "red tape impact assessment bill", it also promises to introduce new regulations in deference to the powerful global gods of "climate change". A national "registry of mitigation actions" will be established, one of whose objectives would be to enforce "energy efficiency labelling for appliances and machines".

Equally bizarre is that a DA government, having stabilised and then privatised SAA, Mango, and SA Express, will "consider subsidising particular strategic routes", although only after a "competitive bidding process". It is reassuring to know that the DA expects to have enough money to do that sort of thing when it comes to power.  

* John Kane-Berman is a policy fellow at the IRR, a think-tank that promotes political and economic freedom. Readers are invited to take a stand with the IRR by clicking here or sending an SMS with your name to 32823. Each SMS costs R1. Ts and Cs apply.