DA fully supports Mboweni’s economic reform strategy

Tito Mboweni’s economic strategy paper released on Tuesday is a ray of light and hope on an otherwise dark horizon. His prescription is exactly what our failing economy needs. His proposed reforms are practical, realistic and achievable, policies that the DA has long been calling for.

They will have the desired effect of boosting jobs and growth and reducing poverty, unemployment and inequality. They should be implemented immediately.

The DA in parliament will work with Mboweni to make this plan a reality. Where we govern, we stand ready to implement his recommendations. This is about changing the lives of millions of South Africans who are without work, without dignity and losing hope.

It is about reversing South Africa’s slide, breaking the vicious cycle of low growth leading to debt leading to low growth, and setting up a virtuous cycle of growth generating opportunities for more and more people generating more growth. What Mboweni needs now to push his plans through is vocal, robust support from all quarters, be it civil society groupings, think tanks or opposition parties. Most of all, he needs President Ramaphosa’s full support.

South Africa’s economy is in such a bad way and the reform required so obvious that the complete lack of change under the new administration has been perplexing and dismaying. Of course, there are many in the ANC who seek to obstruct reform because it threatens their entrenched interests.

But Minister Mboweni and others in the ANC who support reform surely know that they would have the full support of the DA and many other opposition parties too for any reforms they choose to pass.

This reform agenda is based on the principle, long held by the DA, that only a growing economy can deliver real, broad prosperity and generate more tax revenue for the state to spend on social services. It shows a welcome commitment to a market- rather than state-led economy and to the fiscal discipline we need to get us out of our current debt trap. It seeks to make it easier for businesses to start up, operate, and compete globally. It is music to our ears!

The DA strongly supports the proposal of “full or partial exemptions for SMMEs from certain kinds of regulations, including labour regulations, to mitigate the start-up costs for SMMEs, but also to reduce the considerable regulatory requirements”. Unlocking small business activity is the key to mass job creation and skilling.

We also welcome the proposal that municipalities should take over control of local transport including rail. This will enable us in the Western Cape to develop an integrated bus-rail commuter system, which would take some half million commuters off Cape Town’s roads and into safer, greener, cheaper buses and trains while alleviating road congestion.

And of course, we whole-heartedly embrace the focus on boosting labour-intensive activity such as tourism and agriculture by relaxing visa regulations and creating an enabling environment for investment in agriculture including by upholding private property rights.

We have long called for more competition in the energy and communications industries to increase access and reduce costs. So, we welcome the proposals to unbundle Eskom, sell its coal stations and introduce an independent grid operator, as well as to open Telkom’s fixed-line broadband network and auction spectrum.

The only criticism we at the DA could level at Mboweni’s reform strategy is that it does not go far enough. Cities must be able to purchase power directly from independent producers (IPPs) and the police service must be provincialized.

We’d like to see BBBEE scrapped or completely overhauled to enable real redress, and an unequivocal rejection of Reserve Bank nationalisation, expropriation without compensation, the national minimum wage and national health insurance (at least until we have a more solvent and capable state), all of which introduce risk and deter investment.

But I say this only for completeness, recognising that Mboweni faces constraints within his own party, and his need for pragmatism. We understand that he’s biting off just as much as can realistically be chewed right now.

If the pattern of support for this reform agenda could be mapped, it would show clearly that the ANC is ideologically schizophrenic with the majority in the party resisting change to protect vested interests. However, I believe an overall majority in South Africa’s political establishment would support these reforms. Hence a realignment of South Africa’s politics is required.

We need a coalition that places South Africa as the priority and supersedes party interests. Our constitution binds us as citizens and requires us to advance the interests of all citizens. It is the basis for the broad consensus that can ultimately ensure we agree on a workable plan.

The fiscus must be managed in such a way that we build a capable state that can combat corruption and execute this plan. At the end of the day, only broad consensus on reform and a capable state can deliver real prosperity to our nation.

Warm regards,

Mmusi Maimane
DA Leader
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