Mboweni’s reform strategy needs vocal, widespread support
It seems the ANC has a DA finance minister! 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.
Mboweni’s proposed reforms are practical, realistic and achievable policies 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 SA’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. Most of all, he needs President Cyril Ramaphosa’s full support.
SA’s economy is in such a bad way and the reform required is 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 Mboweni and others in the ANC who support reform surely know 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-led 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 about half-a-million commuters off Cape Town’s roads and into safer, greener, cheaper buses and trains.
And we wholeheartedly 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.
THIS REFORM AGENDA IS BASED ON THE PRINCIPLE THAT ONLY A GROWING ECONOMY CAN DELIVER REAL, BROAD PROSPERITY
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 power producers and the police service must be provincialised. We’d like to see broad-based BEE scrapped or completely overhauled to enable real redress, and an unequivocal rejection of SA 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).
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 as much as can realistically be chewed right now.
If the pattern of support for this reform agenda could be mapped, it would show 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 SA’s political establishment would support these reforms. Hence a realignment of SA’s politics is required.
We need a coalition that places SA as the priority and supersedes party interests. Only broad consensus on reform and a capable state can deliver real prosperity.
● Maimane is DA leader.