Re-imagining SA must be a collective effort – Mmusi Maimane

DA leader says our current BEE model is an investment repellent

Re-imagining South Africa must be a collective effort

20 June 2018

Good morning, ladies and gentlemen.

It is an honour for me to stand here this morning on a stage that so many great speakers and thinkers have held before me.

This annual convention of the South African Property Owners Association has become an important date in our country’s calendar. It gathers an incredible number of influential people who are deeply committed to the South African project. It focuses thought and it seeks to find answers, primarily relating to the property sector, but also for a much wider application in our country.

So thank you for inviting me here today to speak to you about our incredible country – about some of the challenges we face as a nation, but also about solutions. Because that’s ultimately why we do what we do. That’s why the DA exists, and that’s why I serve my country through my party.

I have a vision for South Africa. But it is a vision that will require meaningful political and economic reform.

If we want to succeed in this multi-ethnic democracy, then we are going to have to move away from the politics of identity. We will need a political system in which people express their hopes and ideals rather than their race. And to do this we will have to start focusing on the things that unite us rather than that which divides us.

I believe the DA has workable solutions to the challenges our country faces, and our mission is to invite South Africans to join us in applying these solutions, sometimes improving upon them or even replacing them with better ideas. We believe the answers to the many problems we face will come from a broad partnership that includes multiple political parties, the business community, civil society, the education sector, religious bodies and activist citizens.

Importantly, we believe that the only way to solve our problems is for us to unite as a country. Right now there are many who want to take us back to a place we must never return to. They want to divide us by race once more. They want us to mistrust each other, blame each other, target each other. They do this not because they genuinely believe we should hate one another, but because it is their strategy to retain power.

But that’s not the future of our country. We’re not destined to grow apart again. We are meant to be one nation with one common future. I am convinced the overwhelming majority of South Africans believe this too, and will ultimately see through the populist rhetoric and racial nationalism that seems to dominate our conversations these days.

But I also know we will not build this country through platitudes and rhetoric. Any talk of resurrecting our rainbow nation has to be backed up by a solid, workable plan to meet our biggest challenge head-on. And that challenge is the economic exclusion of millions and millions of our people.

There are many aspects to this challenge. There are many factors that contribute to people being shut out of the economy. But the simple reality is that if we don’t find a way to open new opportunities for a third of our working-age population, we can forget about reconciliation, we can forget about building a nation with a shared identity and we can forget about re-establishing South Africa to its rightful place on the continent and in the world.

Twenty-four years into our democracy, the people no longer care for feel-good stories and promises of a better tomorrow. They are fast running out of hope. They need to see a change in their prospects, and they need to see it soon. But we will not see real change in our society without sweeping economic reform.

I’m sure you know all the numbers by now. You see the same Stats SA reports as I do. You read the same Labour Force surveys as I do.

The generous definition of unemployment says that 27% of our people can’t find work. But horrific as that is, the reality is actually a good deal worse. Because once you include what the statisticians call “discouraged jobseekers” – those who haven’t actively sought employment for several months – then that number shoots up to 37% of our working age population.

And most of these are young people. If you are under the age of 24, you have a two in three chance of being unemployed. There’s no other country in the world with this kind of youth unemployment rate. I don’t need to explain to you just how serious a threat this poses for the future of our country.

Already 55% our population live below the poverty line. At the rate at which young, poorly skilled people are leaving school, looking to enter a stagnant economy that is struggling to add new jobs, this percentage will not come down any time soon.

Along with this economic hardship comes social upheaval and the constant threat of violence. Protests have become a daily occurrence, crime is never far away in any community and political violence, like the killings in KZN, is threatening the stability of our country.

So where do we begin?

At the very highest level, government must understand its role in stimulating growth. And more often than not, this role is to step aside and let those in the business of growth do the hard lifting. Make it possible for the private sector to do what it does best, which is to run successful businesses of all shapes and sizes that can absorb workers at a far greater rate than anything we’ve seen in recent years. And at a far greater rate than anything government can provide.

Yes, the State still has a part to play as a provider of jobs, but often this should be as an employer of last resort. The notion that the State must grow our economy, control every sector and create every job is a relic of the past. We cannot cling to this outdated ideology any longer, because it will drag our country further and further down. We need to turn around and face the future.

The best contribution a government can make to growth and job creation – and this is something DA governments have learnt and implemented in both the Western Cape and the City of Cape Town over the past decade – is often simply to clear away obstacles.

Streamlining bureaucracy, reducing red tape, paying suppliers on time, supporting small businesses and new entrepreneurs, providing the infrastructure businesses need, ensuring as far as possible an uninterrupted supply of electricity – these are the things that inspire confidence and attract investment. The State also has a role to play in assisting new black entrepreneurs through access to start-up capital – what I call a Jobs & Justice Fund. These are the areas where government can make a difference.

Along with this shift from a State-led to a State-enabled economy, we must also look carefully and critically at every policy and piece of legislation – current and proposed – that might play a role in attracting or deterring investment. If we want to let the world know that we are open for business, then we have to walk the talk. Our current BEE model is an investment repellent. Our current labour legislation is an investment repellent. The mining charter is an investment repellent. And any talk of expropriating privately owned property without compensation is a massive investment repellent.

Investors make rational, unemotional decisions. When it comes to competing for their business, we’re playing in the same pool as every other country. If we still harbour any notions of a South African exceptionalism, then we must quickly learn to get over it. The world doesn’t care much for our back story and our special circumstances. If we can’t compete, then we will sink. It’s that simple.

There are many other things national government can and must do if we are to turn our economy around. This includes living within its means. We must urgently reduce not only the size of our massively bloated administration, but also our ballooning public sector wage bill. We must dramatically reduce irregular and wasteful expenditure, and we must come down hard on corruption in both the public and private sectors. Zero tolerance for waste and zero tolerance for theft is the only way forward.

We must clean up, and in some cases, clear out, our struggling State Owned Enterprises. Long after the Guptas and their lackeys have left the buildings, our SEOs – and particularly Eskom – will continue to haemorrhage money and cost taxpayers billions if we don’t make fundamental changes to the way they operate.

But if we are to do any of these things – if we want a clean, corruption-free administration, if we want to run efficient, business-friendly government departments, if we are to operate lean, successful SOE’s, then we have to appoint only the best, fit-for-purpose individuals to head up these bodies. As a country, we must walk away from the disastrous policy of cadre deployment – of rewarding unsuitable, unqualified or compromised people simply for their loyalty to a political faction.

Ladies and gentlemen,

We also need to recognise where our country’s potential for growth and development lies, and then direct the bulk of our resources there. If the past two decades have taught us anything, it’s that national government is particularly inefficient at unlocking this potential and spending our budget wisely.

Our cities, on the other hand, have the ability to kick-start our economy – and this is something we’re seeing across the globe. Not only are local governments far closer to the people they serve, and therefore more accountable and responsive, they also are in a better position to identify where and when to invest in crucial infrastructure projects.

One only need look at the recent successes of the City of Cape Town, both in terms of jobs created and new investments attracted, to see the benefit of an obsessive focus on improving the ease of doing business in the metro. Now, I know the city is not perfect either. I’m not going to try to convince people who are often frustrated by red tape and slow bureaucracy that the City of Cape Town is beyond reproach. I know there is still much that can be improved upon. But I also know they have been moving in the right direction for over a decade now, and it shows.

We need to empower our cities with both the mandate and the budget to spearhead our turnaround. But even such a shift to city-led growth will be futile if we continue to sabotage our economic recovery with populist rhetoric around land expropriation.

I know, for most of you, the debate around expropriation without compensation is the biggest issue facing the sector you operate in. I’m sure you are sitting here in this session today to hear my views, and the position of my party, on land. So I will say the same thing to you here as I have said in countless interviews, press conferences and opinion pieces since this debate began. Because unlike the ANC, who have flip-flopped on land from week to week, or the EFF who write one thing in their policy but say another to their supporters, the DA has been consistent, clear and unambiguous on this issue from the start:

The DA believes that land reform must be dramatically sped-up and expanded, and we also believe that this can and must be done within the framework of our Constitution and the protection it offers to property rights.

Those who claim this can’t be done are not being honest with you. If the Department of Rural Development and Land Reform had been properly funded, if corruption within the Department had been addressed, and if there existed the political will to make poor black South Africans land owners with title deed, then this could have been done. And if we had done this for the past two and a half decades, then land ownership in South Africa would have looked far different to the picture we see today.

Instead our government spends as much on its own VIP protection and security as it allocates to land reform. That says all you need to know about where the problem lies. To now scapegoat our Constitution for the failure to return land to the people is nothing but a last-ditch populist ploy to cover for 24 years of failed land reform. The Constitution makes sufficient provision for acquiring land for redistribution. All we now need is a government willing to test these provisions.

But what we can’t do is threaten the rights of those who own property, both current and in the future. Dispossession was a cornerstone of the Apartheid plan to subjugate the majority of our people. And once you start down this road, there is no telling where it will end or who it will target. It is inconceivable that we are prepared to meddle with this once more.

But equally important, property rights are the very foundation of our economy and enjoy protection in our Constitution for that reason. Without securing these rights, we will lose whatever slim competitive edge we might still enjoy as an investment destination. We could not pick a worse way to shoot our economy in the foot. And it is not the wealthy and the middle class who will suffer. It is poor, black South Africans desperate for work who will feel it the worst when investors pull the plug here.

If we want to empower poor South Africans, then we must extend property ownership to as many people as we can, and then protect their right to own this property through our Constitution. Title deed to a piece of land, no matter where and no matter how small, can be the key to financial independence. It can unlock capital for an entrepreneur. It can build a nest-egg for retirement. It can be passed on as an inheritance and provide the foot-up in life that so many young black families still don’t enjoy.

We need to speed this up in rural areas as well as in urban areas. We have to look at ways to empower farm workers as well as emerging black farmers, and we need to be creative and bold in our thinking. In the Western Cape the equity share schemes employed on many farms have given workers a real stake in the land they live and work on.

But it is in our towns and cities that we can really accelerate ownership through the transfer of title deeds. The DA has already made nearly 100,000 South Africans home owners in the City of Cape Town and the three other metros that now also have DA-led governments. And we are working hard at clearing backlogs and transferring even more title deeds.

I know it is not a simple undertaking, and that it’s often fraught with unforeseen complexities. As Helen Zille pointed out in a recent opinion piece on the Joe Slovo settlement upgrade in Cape Town, the loopholes that desperate people exploit in order to jump the housing queue can paralyse the process of building houses and transferring them to their rightful owners. But she also points out that the solution lies in not necessarily trying to implement a flawed national housing policy better, but rather in finding better solutions to providing low and middle income housing.

Many of these potential solutions lie in a partnership between government and the private sector – in providing subsidised housing that is affordable rather than free, or providing serviced sites and assistance for people to build their own homes.

There is not one single solution to our housing challenge. There will be many different solutions to address the needs of the indigent, the low-income families and, importantly, the many households that earn too much for a free home but too little to afford their own. I don’t know what all these solutions are, but I do know that many of you here in this room have thought about this long and hard, and have excellent ideas. And that’s why we must build strong partnerships.

Ladies and gentlemen,

We have come a long way as a country these past two and a half decades. But I don’t have to tell you that we still have much further to go. Every city and every town in this country still bears the scars of our past. Apartheid spatial planning still defines our society, like a permanent tattoo on our landscape. We still live, to a large extent, as a divided nation, and poor black South Africans still suffer because of this.

That’s our big challenge – to transform our towns and our cities into inclusive spaces, to bring poor people closer to work opportunities and to provide a wide range of housing solutions in well-located areas.

It’s a challenge that every country in the world has to grapple with. But, given our history and given the two worlds we have inherited, ours is just that much more difficult. And that’s why we need everyone on board. We can’t afford to turn against each other now, whether that’s race against race, or business against government. Our only hope of rebuilding South Africa is if we do so as a united team.

One nation with one future.

Thank you.

Issued by Mmusi MaimaneLeader of the Democratic Alliance, 20 June 2018