The following speech was presented by Dr Dion George MP in London on the 27 June 2011, at an event hosted by the DA Abroad – UK.
When I was here, in London, last year the football world cup was in progress in South Africa and the eyes of the world were on us, watching to see whether we could deliver on our promise of hosting a spectacular event. We did deliver. We exceeded expectations, even those of the most Afro-pessimistic.
Last year, we were also preparing for the local government election that was held five and a half weeks ago on the 18th of May. Our local government elections are held separately from national and provincial government elections, both on a five year cycle. The next elections should be the 2014 national and provincial government election, followed by the local government election in 2016.
The ANC has indicated that it wants to change this system. It wants a single election for local, provincial and national government at the same time. Its reason for this is clear. The Democratic Alliance is winning elections. We have grown our support base in every election since 1994 and are a ruling party in local government and provincial government. National government is only a matter of time.
The DA’s results in the 2011 local government election are spectacular, given that our predecessor party, the Democratic Party, won 1.7% of the vote in 1994. This year we won 24% of votes across South Africa, up from 16.3% in the 2006 local government election. We almost won Nelson Mandela Bay, Port Elizabeth. We won the City of Cape Town, outright, with 61% of the vote. In 2006, we won 46% and governed the City in coalition. We won 58.1% across the Western Cape Province where we already govern. We now govern 24 municipalities, 14 with an outright majority, in the Western Cape, Northern Cape, Eastern Cape and Gauteng.
In the Gauteng Province, we won 33.3% of the vote. In the City of Johannesburg, we won 34.4%, up from 25.9% in 2006. In my constituency in Sandton North and Midrand, we won 39% of the vote. In Diepsloot, a large informal settlement, we won 7%, up from 3.5% in 2006 and in Ivory Park, a densely populated former township, we won 5%, up from 2.4% in 2006. In Kanana informal settlement we won 12%. In the informal settlement near Lanseria we won 22%. We also won the ward in which it is located, from the ANC, with 54% of the vote.
Overall, it was a very successful election for the DA and we will build on this very solid foundation in 2014. In that election, South African citizens abroad can vote and we are expecting the DA Abroad to play a pivotal role in bringing out the vote on the day.
A negative trend for democracy in South Africa that revealed itself in this election was the conduct of some officials of the Independent Electoral Commission. Officials were not ready on time to receive voters in several parts of my constituency and in many other voting districts across the country. At one of my polling stations in particular, a traditional DA stronghold, the queue grew to almost 1000 because the single scanning machine was not working and the officials were disorganised.
Whether this was through design, incompetence, or both, this is not acceptable. Officials at that station also refused to permit heavily pregnant women, the elderly and the disabled from receiving the preferential treatment to which they are entitled. DA party agents escorted those affected to the front of the queue, no other voters objected and they waited patiently for their opportunity to vote.
During the count, the Presiding Officer at another of the polling stations in my constituency tried to declare 300 votes clearly cast in favour of the DA as spoilt because the cross on the ballot touched or slightly protruded across an adjacent block. Our party agent refused to sign off the count and it was only in the early hours of the following morning and after intervention by a more senior IEC official that the votes were correctly allocated to the DA.
When I visited the temporary voting station at the Engen Garage in Ward 92, Country View, a marginal ward where the DA officially won 32% of the vote, I could clearly hear the ANC election songs broadcast from their position directly across the road from the polling station – an illegal position and activity. I asked the Presiding Officer to act, she refused and when I asked why there was no police presence at that station, as was the practice at all other stations, she replied that they had not arrived and that she had not done anything to resolve the problem. I asked the ANC agents across the road to comply with the law. Their reaction was hostile and physically threatening. I have no doubt that a violent outcome was only averted by the intervention of an ANC Councillor, who recognised me as a Member of Parliament. I wanted to lodge an objection with the Presiding Officer, but no objection forms were available, so I wrote my objection on a piece of paper and recorded into her election diary. No response has been received, nor will it ever.
We lodged an objection to the count at the Drake Kota polling station, in the same ward, after our party agents abandoned the station in the early hours of the morning following gross irregularities in the count and their feeling unsafe to remain present. Our objection was subsequently rejected without reasons given and we await further information from the IEC. Our candidate for the ward, a local resident, was later threatened by a group of people at her home and was forced to seek refuge at the local police station and needed police protection for several days after the election.
These anecdotes are not particularly alarming given the overall performance of the IEC, but they do point to the possibility that, as the DA continues to gain momentum and the ANC continues to lose its grip on political power in South Africa, the noise might become far louder and incidents less isolated. I am often asked whether I think the ANC will go willingly when the DA wins a future national election. My response has always been and remains that the ANC handed over the keys to the City of Cape Town and to the Western Cape Province and that they will do the same with the Union Building in Pretoria. The so-called agreements in Zimbabwe, Kenya and the Ivory Coast where the ruling party refuses to leave when it loses an election is not an option in a democracy.
In this election, the ANCs national vote reduced from 65.7% in 2006 to 62.8%. Its’ support reduced in six of the eight metropolitan areas and dropped below 60% in the City of Johannesburg to 59.5%; Tshwane (Pretoria) to 55.3% and Nelson Mandela Bay (Port Elizabeth) to 52.1%, a drop of 15.5 percentage points. In Cape Town it polled 33.2%.
There is no doubt that South Africa is becoming a two party state with the DA on the rise and the ANC in decline. The DA’s message is resonating amongst all the diverse communities across South Africa.
Another negative trend for democracy in South Africa was the ANC’s election message that revealed its racial nationalism and its focus firmly on the past. Voters were told that Madiba, Nelson Mandela, would become ill if they voted for the DA; that their ancestors would be angry if they voted DA; that only those who vote ANC go to heaven and that the DA would take away social grants and return Apartheid to South Africa. This message was clearly rejected by the additional 1.6 million voters who doubled the DA’s vote from 1.6 million in 2006 to 3.2 million in 2011.
The DA focused its campaign on the future and the hope of a better life for everyone. We were able to demonstrate that where the DA governs, we govern well. Where we govern, we deliver. The Apartheid system damaged our country and we are still struggling to emerge from the structural defects in our economy that resulted from Apartheid. In my address last year, I said that we need Economic Liberation in South Africa. Political liberation has been achieved and now we need to resolve our continually growing and associated problems of unemployment and poverty. The DA is a diverse party that delivers and we believe that redress and reconciliation is required in South Africa.
South Africa is achieving well below its potential GDP growth rate as an emerging economy; huge sections of our population remain trapped in poverty; our official unemployment rate at 24%, and 36.5% if we include people who have given up their search for employment, is the highest in the world and our employment ratio the lowest on the African continent, we also export far less than our capability. The International Monetary Fund recently raised its estimate of South Africa’s GDP growth rate for this year from 3.5% to 4%. This estimate is higher than the consensus amongst local economists, which is 3.8%. There is also an expectation that interest rates will rise later in the year.
South Africa recently joined Brazil, Russia, India and China in the BRICS group of economies. The question that hasn’t yet been answered is how South Africa will benefit from its membership. It has been suggested that business will benefit from partnerships with counterparts in the other economies, but we haven’t yet seen the results of this possibility. The benefit for China, in particular, of a close relationship with South Africa is obviously that we really are the gateway to the enormous potential of the African economy. China is very interested in Africa as a source of minerals for its manufacturing industry and a market for the outputs of that industry. India is already South Africa’s sixth largest export destination and Indian Banks in particular regard South Africa as a springboard to the rest of the continent.
South Africa’s membership of the BRICS will, hopefully, keep at the top of government’s mind the fact that we are lagging far behind the other members and that we need to up our game if we are going to be considered an equal partner. This means that government will need to make viable economic policy choices, something that it has not been able to achieve since 1994. In particular, it permits within its ranks and without sufficient contradiction, talk of nationalisation of the mines and other industries and expropriation of property without compensation. This does nothing for investor confidence and introduces unnecessary uncertainty into an already fragile economy. A week ago, the ANC Youth League re-elected as its President, Julius Malema who has made no secret of his intentions to pursue radical economic policy changes at the ANC’s Congress in Mangaung, Bloemfontein, next year.
In his response to the DA’s objections to Mr Malema’s conduct, amongst others referring to Premier Helen Zille, the leader of the DA, as a cockroach and a monkey and to Lindiwe Mazibuko, our National Spokesperson, as the Madam’s tea-girl, President Zuma laughed it off and said that he should perhaps get Mr Malema to become a Member of Parliament. If he were, it would be possible for the DA to debate with him. When our National Spokesperson was invited to appear with him on a television debate, he refused to participate while she was present.
It now remains to be seen whether Mr Malema will attempt to unseat Mr Zuma as the President of the ANC and of South Africa. Over the past week the ANC has been trying to manage the fallout from Mr Malema’s radical outbursts. The ANC’s tripartite partners have also objected to statements made by Mr Malema. Cosatu, their trade union partner rejected his claim that they no longer represented the working class and the South African Communist party said that the youth league was on, quote, “a dangerous adventure”, unquote.
We already know that there are significant cracks in the ANC tripartite alliance and that many moderate people within the ANC know that South Africa cannot experiment with our future. Our institutions are not yet strong enough to repel a corrupt and despotic pretender. The re-alignment of politics in South Africa that has been a long time coming can only be accelerated by the likes of Mr Malema.
Seventeen years after the ANC was elected to power in South Africa, it remains unable to offer a coherent and workable economic policy proposition. After 1994, the Reconstruction and Development Programme (RDP) was initiated and aimed to deliver various development programmes. It failed in implementation and was closed by President Mandela in March 1996.
In June 1996, Trevor Manuel, then Minister of Finance, introduced GEAR, the Growth and Accelerated Redistribution programme. The policy set government the goals of achieving sustained annual real GDP growth of 6% or more by the year 2000 while creating 400,000 new jobs each year. The policy was meant to increase investment, especially foreign direct investment in the country to help achieve these goals. GEAR did achieve greater financial discipline and macroeconomic stability but it largely failed to deliver in key areas. Between 1996 and 2004, our GDP growth rate averaged 3.1% and peaked at 5.3% in 2006. Formal employment continued to decline, foreign direct investment did not grow rapidly and the ambitious economic growth targets were never realised.
The Accelerated and Shared Growth Initiative for South Africa (AsgiSA) was launched in February 2006 by then Deputy President Phumzile Mlambo-Ngcuka. It aimed to achieve a 6% growth rate after 2010 and to halve unemployment and poverty by 2014. It identified six “binding constraints” which prevent South Africa from achieving the desired growth rate: the relative volatility of the currency; the cost, efficiency and capacity of the national logistics system; shortages of suitably skilled labour, and the spatial distortions of apartheid affecting low-skilled labour costs; barriers to entry, limits to competition and limited new investment opportunities; the regulatory environment and the burden on small and medium enterprises; and deficiencies in state organisation, capacity and leadership. A month later, the Joint Initiative on Priority Skills Acquisition (JIPSA) was established to address the scarce and critical skills needed to meet AsgiSA’s objectives. No progress has been achieved in addressing the skills mismatch in our economy that we still experience today. The binding constraints remain firmly in place.
In February 2008, President Thabo Mbeki announced his Apex Priorities to accelerate our economic growth and development; improve the effectiveness of our interventions directed at the Second Economy, and poverty eradication; enhance education and training; accelerate our advance towards health for all; revamp the criminal justice system to intensify our offensive against crime; and strengthen the machinery of government to ensure that it has the capacity to respond to our development imperatives. Seven months later, Mr Mbeki was no longer president and his priorities were forgotten.
Under President Zuma, economic policy in South Africa has not only become uncertain, it has also been fragmented to appease the various factions within the ANC’s tripartite alliance with the Congress of South African Trade Unions and the South African Communist Party. In 2009, President Zuma established 8 new government departments, including a Ministry for Economic Development and a Ministry for National Planning. These are in addition to the National Treasury and the Department of Trade and Industry.
The Minister of Economic Development, Ebrahim Patel, subsequently appointed an advisory panel and, late last year, launched the New Growth Path as the framework for economic policy and the driver of the country’s jobs strategy. It prioritises, as job drivers, government efforts to support employment creation in infrastructure; the agricultural value chain; the mining value chain; the green economy; manufacturing sectors, as set out in the Industrial Policy Action Plan II of the Department of Trade and Industry; tourism and certain high level services.
The New Growth Path sets out a macroeconomic package to be guided by looser monetary policy and tighter fiscal policy backed by microeconomic measures to contain inflationary pressures and enhance competitiveness. It includes a package of social partner commitments through a broad development pact on wages, prices and executive bonuses. It proposes modest wage settlements for workers earning between R3000 and R20 000 per month, possibly at inflation plus a modest real increase with inflation increases for those who earn over R20 000 per month. It also proposes a cap on pay and bonuses for senior managers and executives who earn over R550 000 per annum and to moderate price increases, especially on inputs and wage goods.
The New Growth Path declares the Developmental State as an institutional driver and the need for social dialogue and mobilisation.
Minister Patel says that to start the implementation process, the following steps are being taken: finalisation of the developmental policy package; initiation of engagement on a social pact with key stakeholders and memoranda to cabinet detailing implementation plans for each of the growth path areas. The Minister says that outcomes-based methodology will be the basis for evaluating and monitoring the success of growth path interventions and that it is crucial that delivery forums be clearly identified to oversee progress. He adds that the National Planning Commission has a crucial role in aligning the economic growth path with other social programmes and trends and that the economics cluster will work closely together through the national budget process to ensure that the medium term expenditure framework begins to reflect the key programmes and policies of the New Growth Path.
To do this, Minister Patel needs to work with Trevor Manuel, Minister in the Presidency for the National Planning Commission and Pravin Gordhan, the Minister of Finance.
Two and a half weeks ago, Trevor Manuel released the initial work of the National Planning Commission. When I responded in parliament, I welcomed the candid diagnostic that was the outcome of this first phase of the Commissions’ work. The Commission identified nine key challenges: too few people are employed in our economy; the quality of our education is too low; our aging infrastructure is crumbling and slows the pace of our economic activity; the apartheid spacial divide remains in place; our economy is resource intensive; our healthcare system is inadequate and ailing; public service delivery is uneven; corruption undermines state legitimacy and South Africa remains a divided society, by race in particular.
There were no surprises, but it does focus our attention on the huge amount of work that needs to be done in South Africa to achieve Economic Liberation. Minister Manuel put two possible future scenarios. If we continue our economic growth without social equity we are heading for disaster. If we focus only on social equity without economic growth we are heading for disaster. We need to increase our economic growth and increase our social equity. The DA agrees. Our policy instruments must be designed to achieve this objective.
In his feedback on the Commission’s work, the Minister suggested that our attention should be focussed on the human condition, material conditions, institutions, our economy and nation building.
Nation building would be a good place to start, given that the ANC has failed to defend the non-racial dreams of Nelson Mandela and has revealed itself to be no different to the former National Party, the architects of Apartheid, with their fixation on racial identity. It was for this reasons that the DA objected to the Commission’s division of South Africans into the categories African and non-African. We are all Africans in South Africa. The preamble to our Constitution declares that South Africa belongs to all who live in it, united in our diversity. The Constitution must be respected and defended.
When Mr Jimmy Manyi, the government spokesperson, said that there are too many coloured, as opposed to black, people in the Western Cape, Trevor Manuel responded in an open letter that he wanted to put to Mr Manyi that quote “your behaviour is of the worst-order racist”, unquote. The ANC did not call Mr Manyi to order, and remained silent when Mr Malema made reference to whites as thieves of the people’s land. Robert Mugabe is clearly his role model.
So where are we with the New Growth Path and the National Planning Commission? The unfortunate answer is, we’re not sure. Both intend to engage in a national dialogue to develop a social contract between various stakeholders. In the meanwhile, our economic recovery lags, the unemployed remain unemployed and poverty continues to deny individuals the opportunity to become everything that they are capable of being.
In Parliament last week the DA opposed 26 out of 38 budget votes and opposed the overall budget. We do not believe that the policy package proposed by the ANC will address unemployment and poverty. We do not believe that it will redress the structure defects in our economy. We do not believe that the people’s money is effectively and efficiently managed. Too much money is wasted and too little is delivered.
The DA agrees that government intervention in the economy is required. The Great Recession taught valuable lessons. The key issue, however, is where and how it intervenes. Intervention must be aimed at making economic activity easier. It is possible to build a road out of poverty through the barriers to economic development that constrain the hope and dreams of our people.
At present, government intervention is focused on government driving employment. The public sector wage bill is the fastest growing expenditure item in the National Budget, without any productivity, and hence delivery, gains. This is not sustainable. Expenditure on social grants continues to grow. While the DA believes that a social security net must be available for vulnerable members of society, we must get more people into work so that the net can be improved and remain sustainable. The increasing consumption expenditure is not sustainable. There needs to be a focus on productive spending.
The DA’s economic policy allows for a virtuous cycle of skills development, infrastructure investment, improved productivity and increased employment. Wage subsidies, the simplification of our labour and tax regulations and the elimination of the current skills development levy will cut the cost of doing business, and encourage employers to hire first time workers and improve their productivity through on the job training.
In partnership with the private sector, the expanded public works programme will be used to develop skills, and will be focused specifically towards those on the sidelines of our economy. Opportunity vouchers will allow our young graduates to pursue self employment opportunities or further study.
A DA government will direct fiscal and monetary policy at attracting labour-creating investment through price stability, certainty and predictability. We will draw more people into our economy through comprehensive broad based economic empowerment, focusing on helping those who really need help, not the already empowered. Our economy has experienced significant distortions through the unintended consequences of so-called empowerment legislation. The DA recognises that stability encourages jobs and investment, and therefore we will put policies, rules and institutions in place that foster stability. We will increase the capacity of the competition commission and the consumer protector to ensure that there is fair competition and the rights of the individual are protected; ensure a more transparent public tendering process and give more resources and responsibility to key oversight bodies such as the auditor general to ensure that public money is spent wisely, efficiently and economically.
Empowering more people to get involved in our economy will lead to higher incomes, higher investments, higher savings and higher tax revenues. This in turn will provide us with more resources to make sure that those left remaining on the sidelines of our community are assisted with every possible opportunity to take charge of their own lives, and provide for South Africa’s future economic prosperity.
Particular attention to education is vital. Our policy is designed to ensure that young people in particular are either in work or in education and not lost somewhere in-between.
The ANC government has denied economic liberation to the vast majority of our people. By operating a closed, crony, patronage system for some it has denied the opportunities available to many. The DA’s Open Opportunity Society for All is the only, viable alternative. We are the only viable alternative government.
Despite the many steep hills that we have yet to climb on the road to economic prosperity for all in South Africa, the DA is hugely optimistic about our future. We have a young and energetic population, just waiting to grasp all of the opportunities that South Africa and Africa have to offer. Our fundamental belief is that everyone in South Africa should have the opportunity to achieve all that they are capable of achieving irrespective of their circumstances at birth. It is possible and we are committed to making this reality.
While the ANC sees government as a controller at the centre of the economy, the DA envisages government as a facilitator and one of many participants in the economy, playing a particular role to the benefit of individual freedom for all. We will do this, not if, but when, we govern South Africa. In the Western Cape where we do govern, we have implemented this model, and it works.
Thank you to the DA abroad for inviting me to speak here today. The DA abroad network is becoming a home for all South Africans abroad – especially those who are optimistic about our future and want to make a constructive contribution to making South Africa a better place for all.
DR DION GEORGE MP, DA SHADOW MINISTER OF FINANCE