An extremely bad idea
The idea that business does not contribute to peace and democracy is a fallacy. Where does the ANC think taxes come from?
ANC treasurer-general Zweli Mkhize has proposed that business should contribute to a trust that would fund political parties. I think this is a terrible idea. But more importantly, it’s an idea premised on a set of revealing fallacies. Mkhize’s argument runs along these lines: business has gained through the establishment of peace and democracy. That benefit was put into place by politicians who continue to keep democracy going, from which business continues to benefit.
Hence, a trust should be established into which business “must pay millions” which, he says, would be administered by the speaker of the national assembly and distributed proportionally according to popular support. “I believe there are businesses thriving because of stability and peace created by democracy, but they do not want to contribute,” he is reported to have said.
In fairness to Mkhize, business has helped foster the notion that political parties need to be rewarded for doing what they are constitutionally required to do by making generous contributions over the years. Mkhize isn’t arguing this should stop and that all contributions from business and elsewhere should go into a common fund — quite the opposite. What he is arguing for is more contributions from those spiteful holdouts unable to see the light.
The first problem is that Mkhize’s argument is based on the fallacy that business does not contribute; it does, of course, in huge quantities, by paying tax. That contribution goes to government rather than political parties, but representative government is the consequence of democracy; political parties are merely its agents. It is argued that business pays only part of the tax bill, since nominally the largest part of the total tax bill is paid by consumers in the form of Vat and by personal taxpayers. But in the final analysis, almost all tax is paid for by companies, since Vat is essentially a tax on what businesses produce, and personal tax is a tax on what people earn from working, mainly, in businesses.
The counter argument to Mkhize would be this: if business is expected to contribute to political parties to the extent that it gains from democratic government, it should have the right to claim from government any debasement of democracy. How would this tally work out? A lot depends on what you might consider a democratic deficit and how you might value it.
But these arguments are really pie in the sky. These are testing times, and for business, the issue is much more immediate. SA has passed the stage where democracy is in doubt and political parties should be rewarded for the simple act of existing. Business has to look to its own. Parliament has passed a huge array of legislation this year which will increase the cost of doing business. Much of this legislation is clothed in the garb of virtue, but passing laws is so much easier when you’re not the one who has to actually comply with them. Almost none of the business suggestions by Nedlac have been implemented in the four critical amendments to labour and empowerment legislation now before parliament. One specifically antidemocratic measure that was snuffed out by parliament was the stipulation that unions cannot strike without first conducting a strike ballot. Some human rights groups have welcomed Mkhize’s suggestion on the basis that it would provide a more transparent system, but more transparency has not been included in the suggestion.
In general, I think business should preferably not fund political parties directly, because at best it come across as lobbying, and at worst a bribe. But to the extent that it does, business needs to fund parties that not only support democracy but also support free markets.
The ANC cannot introduce antibusiness legislation for 4½ years and then expect business to suddenly put its hand in its pocket when elections roll around.
fmeditor@fm.co.za