SA is run by and for the suburbs

THIS country’s government is free to discuss any ideas for economic change it likes – as long as the suburbs like them too.

We have just witnessed a sobering lesson in how easy it is for vested interests to mobilise the prejudices of the suburbs against proposals for economic change. It raises serious questions about whether it is possible in today’s South Africa to gain a fair hearing for any proposal for change that economic power holders oppose.

The Department of Social Development triggered the lesson by publishing a Green Paper on social security reform. A key feature was a proposal for a national social security fund (NSSF). This would provide working people with benefits when they retired or became disabled, and offer their families financial support if they died before retirement. It would be funded by workers earning up to R260000 a year who would be expected to contribute 8% to 12% of their earnings.

The Green Paper is a product of discussions at the National Economic, Development and Labour Council (Nedlac). Business organisations had supported a NSSF if it benefited only workers who earned much less than R260000. They were concerned that a fund for higher-paid workers would eat into the profits of private savings schemes and may also have been worried that contributions would place pressure on worker pay packets and prompt higher wage demands. Since the Green Paper did not endorse their view, they complained that they were being ignored.

The financial media, which has campaigned ceaselessly against the Green Paper, greeted it with a howl of outrage. Public pontificators have declared that, because the department’s minister, Lindiwe Zulu, is associated with the ANC faction that supports Jacob Zuma, the Green Paper was an attempt to make trouble for President Cyril Ramaphosa.

The National Treasury, asked to comment, said the proposal was not government policy and made it clear that it did not like it.

Before long, the suburbs had been mobilised against the proposal. The inevitable WhatsApp groups were abuzz with messages insisting the government was about to impose a new tax that would deprive them of everything they have. Within days, the Green Paper was demonised. It has now been withdrawn.

A look at the Green Paper suggests that the NSSF proposal is a great deal tamer than the media or WhatsApp messages claim. Its proposals are for the longer term, not an immediate priority. Nor is the NSSF designed as a substitute for private savings schemes – on the contrary, it says the benefits offered will not meet many workers’ needs and so they will be encouraged to buy into private savings schemes. Contributions to the NSSF have been smeared as a “tax” but that is simply untrue. The money would not contribute to government revenue – it would be used to pay benefits to people who contributed to the fund.

In sum, a proposal to reform the social security system as a supplement to, not a replacement for, private schemes has been savaged as a threat to the country’s economic future. Why? Because, as the Green Paper acknowledges, the proposal may make life more difficult for the private savings industry.

And because any business lobby that dislikes a policy proposal knows it can sow fact-free hysteria because the financial media believes business is always right and the government always wrong.

It can do this also because the suburbs are convinced, despite evidence to the contrary, that the government wants to confiscate their money.

The campaign has worked perfectly – not only has the Green Paper been withdrawn but it has also, with the government’s active help, been discredited. What is at stake here? The issue is not the merits of the NSFF proposal. It is that there was no debate about its merits – simply a hate campaign. It was not criticised – it was caricatured. Most important of all, much of the attack was devoted not to rejecting a policy proposal but to denying the government’s right to make it.

The message was clear – an elected government has no right to make suggestions that do not reflect business’s view and which have not been approved by lobbies and financial journalists, even if all it is doing is seeking public reaction. In a society supposedly ruled by the majority, the government may say only that which the shrill minority allows it to say.

Throughout the media “coverage” of the Green Paper, no one bothered to point out what should be common knowledge among any journalist who covers the government – that Green Papers are never policy documents. The government circulates a Green Paper for discussion when it wants to know what interest groups think of policy proposals. This enables it to decide which of the ideas in the document enjoy political support.

Given this, Green Papers are meant to be debated, criticised – or pulled apart. But, because they are only discussion documents, to say that the government has no business issuing a Green Paper is to insist that an elected government has no right to ask the public for comment on ideas that offend organised lobbies and journalists with axes to grind. It is to tell the subordinated classes – whom the government is assumed to champion, even though it doesn’t – that they can want only what folks with money decide they can want. It also tells those who campaign for economic change that they can say what they like as long as they don’t persuade anyone in government to make it a reality.

If the government really was what the journalists and suburbanites think it is, it would not allow minorities to silence it when it explores ways of addressing poverty. But it isn’t, and so we can be assured that it will be a long while before anyone in government suggests anything that might offend business lobbies and their vocal messengers.

Until this changes, South African democracy will be a system in which, on economic and social policy, the elected government can do whatever the suburbs allow it to do.