This month the ANC released its long awaited mining nationalisation report concluding that state ownership of the mines was not feasible and instead proposing higher taxes for the sector. This report has come off the back of a vigorous debate fuelled by the ANCYL which has taken advantage of the vulnerability of our country’s poor to push forward their own financial agenda. So, I imagine that Julius Malema and his ANC Youth League cronies were very disappointed by the findings of this report. Rather encouragingly for the rest of us, the report was sensible and its conclusions based on solid research into other countries.
The report has been welcomed by the mining industry which has complained that the extensive debate on this issue over the past year may have seriously affected investment in the industry. I fear the damage may be more extensive – with growing concerns over the lack of infrastructure, continued load shedding and policy restrictions, this continued uncertainty has simply convinced mining companies that more welcoming countries like Australia and Brazil are a better option.
The report doesn’t go out of its way to console the sector either. Although the main conclusion is that the nationalisation of mines will not be good for the country as Malema insisted, it goes on to suggest other methods that can be implemented to achieve the same share of the national wealth by the poor of our country. These include a 50% tax on the sale of mining rights to prevent speculation; another 50% tax on any super profits. At least these solutions are more sensible options that protect private property and ensure our mining industry doesn’t fall to pieces, while at the same time increase tax on these activities which benefits South Africans.
I’m sure the ANCYL is not going to let this go and will continue to play politics with our country’s future. The ANCYL has asked the right question: how do we fairly distribute the national wealth of our country? And this report has some of the answers, but it’s not what the ANCYL wants to hear.
At the end of the day, our country needs to solve the poverty issue and the unequal distribution of wealth. Let’s hope the ANCYL doesn’t hijack the real ANC on this issue. Imagine: President Malema!
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This column first appeared in The South African, a UK newspaper, on the 28 February 2012.