ActionSA President Herman Mashaba presents ActionSA’s plan for inclusive economic empowerment

9 May 2024  

Note to editor: These were the remarks made by ActionSA President, Herman Mashaba, at his old factory at Mabopane, Soshanguve, which he burnt down in 1993. Link to factory images can be found here: https://twitter.com/HermanMashaba/status/1616811794328129538

I stand before you today, with a deep sense of disappointment, in front of once a 6000 square metre state of the art factory, right here in the middle of Mabopane. A factory my partners and I built, using our own resources because the Apartheid era did not support us.

This factory used to employ over 250 local people. It also used to be a hive of business activity, some employees used to walk to work, supplying products throughout the entire Southern Africa.

On the night of 17 November 1993, on the eve of our first democratic elections, unfortunately, criminal elements torched this factory to the ground.   

Today, it breaks my heart to see this industrial complex being used by government as SASSA offices, making our people dependents on state to survive.   

I have told the story many times of how excited in was in 1994 about the promise of what democracy would bring.

After working hard to build a successful business under the restrictions imposed on us by the apartheid government, I looked forward to a new era of prosperity where all South Africans could be equal counterparts in a growing economy.

I looked forward to an explosion of black entrepreneurship and new opportunities for the communities that had been excluded under the evil apartheid regime.

I voted for Nelson Mandela’s ANC in 1994 believing they would deliver economic freedom. But as the years passed, it became clear that new legislation aimed at empowering the previously disadvantaged only served to empower the few politically connected and corrupt.

Today, South Africa remains the most unequal society in the world with unemployment hovering around 44%, the highest sustainable in the world.

While ActionSA was founded on the value of non-racialism, we cannot deny that the majority of those trapped in poverty are the same people who were excluded from the economy by the apartheid government.

To deny this reality is to deny the lived experience of the millions of black South Africans who remain without an opportunity for upward mobility.

Empowerment legislation has created a new class of wealthy tenderpreneurs but has done nothing to change the future of those born in communities like Orange Farm or Khayelitsha.

This is not the South Africa I dreamed.

But today I do not want to dwell on the failures of a government that refuses to admit its mistakes. Rather, I want to present ActionSA’s vision for the future of economic inclusion in South Africa - a vision where economic empowerment is genuinely inclusive and ensures that everyone has the opportunity to live the life they dream of.

In this future South Africa, government action dismantles the barriers to entry that millions of South Africans continue to face, rather than hoarding empowerment resources for a lucky few. A future where ActionSA leads the way in building a South Africa where equality of opportunity is not just an ideal, but everyone’s reality.

To this end, I am here to present our plan for inclusive economic empowerment, or “IEE.” Under our IEE approach, access to opportunity will be rapidly expanded for all South Africans still being excluded from economic activity ensuring true equality of opportunity, not just manipulated equality of outcome.

In simple terms, we want people that remain excluded from economic activity to finally have the opportunity to achieve prosperity, however, they may define it.

It means that the millions of South Africans trapped in a generational poverty trap will finally have the support needed to achieve upward social mobility for them and their families.

ActionSA’s IEE approach is based on the basic principle that solving a problem requires understanding the root cause of that problem, rather than just addressing the symptoms.

Inclusive economic empowerment requires a whole-of-government approach to ensure that a child born into a forgotten community would have access to quality healthcare, quality education, reliable basic services, and safety and security.

This is not about trying to manipulate empowerment scorecards but ensuring that we are empowering communities with the resources and infrastructure they need to prosper.

Without addressing these fundamental issues, no amount of policy interventions could ever move the needle of economic empowerment in a meaningful way. Awarding tenders to politically connected companies with hopes that their fortunes will trickle down doesn’t empower young people with the skills that they need to thrive.

Forcing private companies to employ people in senior positions based on their race does not increase the number of doctors in our hospitals, or teachers in our schools.  It is exactly for this reason  that our desire to improve the lives of South Africans underpins everything we do as a party, including all our policies and election manifesto.

Let me be clear. We are unapologetic in our support of black economic empowerment, which includes all previously disadvantaged communities in South Africa.

But addressing inequality must take a grass-roots approach that addresses the cause and not just the symptom. ActionSA’s efforts to improve the basic conditions for all South Africans will ensure quality of life supported by proactive economic empowerment measures.

Under our IEE policy, we will introduce the Opportunity Fund, reform employment equity measures, adopt a universal basic income stimulus, address persistent spatial justice issues and promote social cohesion.

Through these interventions, we will ensure that our government spends its time and resources on truly addressing the barriers that prevent millions of South Africans from pursuing a better life and future for them and their families.

Opportunity Fund

One of the first things an ActionSA government will do when voted into power, is to introduce legislation to establish an Opportunity Fund to empower forgotten communities.

Our aim is clear: to dismantle the barriers that have hindered the economic empowerment of Black, Coloured, Indian and Asian South Africans. The Opportunity Fund is our commitment to making sure that the neglect felt by millions under previous policies is turned into active inclusion and prosperity. It's about creating fair chances for all, not just for some.

The Fund will usher in a new era of rapid economic inclusion for those marginalised by our current systems. We will drive socio-economic development by directing capital towards transformative programs that build the economy everyone can participate in.

The Opportunity Fund will be founded on the principle of expanding access to economic opportunities. It will invest in essential infrastructure such as schools, healthcare facilities, and transportation—areas that directly affect the daily lives and future prospects of our people. Moreover, it will support initiatives in skills development, entrepreneurship, and housing, ensuring that empowerment is comprehensive and multifaceted.

10% of the Fund’s expenditure will be allocated to education, 30% towards entrepreneurial funding, 35% towards infrastructure projects, and 25% towards further investments that promote the sustainability of the Fund.

The Opportunity Fund will replace all existing government developmental funds and be managed by politically independent professional asset managers and independent trustees. Politicians’ role will be limited to providing guidance on government's priorities and conducting oversight on behalf of the people of South Africa. Government will not decide who to empower, or which tenderpreneurs to enrich.

Let me be very clear: the Opportunity Fund will belong to the people of South Africa and be managed for the benefit of South Africans. Any person licking their lips thinking there will be a chance for self-enrichment must think again - the Opportunity Fund is for all of us, equally. Anyone trying to benefit unduly from the Fund will be met with the full force of the law.

No politician, not even the President or Minister of Finance, will be able to interfere in the business of the Fund. The Fund's business and financial statements will be publicly available, and cutting edge financial technology will be used to track and report every cent of expenditure.

To fund these ambitious plans, we will introduce a tax on private sector profits, but exempt SMMEs from this tax. This tax will replace the cost of compliance with current empowerment regulations, allowing businesses to offset the cost of malicious compliance against genuine empower.

Rather than imposing an indirect tax on businesses in the name of empowerment and transformation, we will be transparent about our intentions but also with how those funds are used.

This tax will be time-bound and will be repealed after a maximum of 30 years, ensuring it serves its purpose without becoming a permanent burden. Additionally, profits from state-owned enterprises and penalties from corruption cases, including asset forfeiture, will be redirected to the Fund.

We will also introduce specialist investment vehicles and tax incentives to encourage businesses and private households to invest in the fund.

The Opportunity Fund is a bold step towards rectifying the imbalances of our past. It is an investment in our future, ensuring that economic empowerment in South Africa is broad-based and inclusive. With this initiative, we are not just changing policies; we are changing lives.

Universal basic income stimulus

ActionSA will also propose the introduction of a Universal Basic Income Stimulus (UBIS). This three-year program is not just a financial support mechanism, but a catalyst for widespread economic growth and job creation.

Our aim with the UBIS is straightforward: to provide a regular, unconditional cash payment to every South African that signs up for it. This initiative is designed to boost consumer spending, stimulate economic activity, and uplift the standard of living across our nation.

We believe that the UBIS will add an additional 2 percentage points to our economic growth rate, against the projected baseline. We believe that over the three-year span, the economic stimulus stemming from the UBIS will lead to the creation of an additional 1.6 million jobs.

Through expanding the tax base, this initiative will not only be cost-neutral, but serve to grow our economy.

Eligibility for the UBIS will be inclusive, covering all citizens and permanent residents over the age of 18. Children currently receiving child support will also benefit from this initiative. To streamline the process, those earning below the taxation threshold will be automatically registered, while others will have the option to register manually.

By the first year, each registered recipient will be given a monthly amount equivalent to the food poverty line. No one will go hungry under an ActionSA government.

This amount will increase each year, reaching the upper-bound poverty line by the third year, reflecting our commitment to improving living standards sustainably over time. This gradual increase ensures that as the UBIS stimulates the economy, generating higher tax revenues, it becomes increasingly self-sustaining.

Funding the UBIS will be conducted through innovative funding options, and not an increase in personal taxes. Options under consideration include utilising monetary finance, central bank lending, and leveraging assets from the Opportunity Fund, among others.

Our approach will be cautious, ensuring we consult with fiscal experts to maintain economic stability and avoid increasing taxes. The funding mechanisms of the UBIS will not be a political decision, but a technical, financial one.

Importantly, while this grant will replace the meagre Social Relief of Distress Grant, it will be in addition to all other existing grants. No grants will be reduced under ActionSA. On the contrary, we will expand them.

While our ultimate goal is to eradicate the need for social grants through job creation, we understand the important role grants play in providing a safety net for millions of South Africans after decades of chronic unemployment.

However, an ActionSA government will improve the governance of our grants to ensure that government expenditure on grants benefits the recipients, and not dodgy middlemen. We will, without hesitation, prosecute anyone that exploits, steals from, or financially abuses grant systems or recipients. Stealing from the vulnerable is the lowest form of humanity, and will be treated as such.

The Universal Basic Income Stimulus is not our attempt to win votes. It is our commitment to ensuring that every South African has the financial resources to contribute to and benefit from our growing economy. Importantly, to live a life of dignity. It's a step towards not just recovery, but prosperity that is shared by all.

Employment equity

Employment equity also remains an important issue in South Africa, and it is clear that punitive approach to employment equity that encourages malicious compliance is not working to transform South Africa’s labour force quickly enough.

We want to create a labour market that is more inclusive and absorbs more people, especially young people. This can only be achieved by regulatory reform that makes it easier to employ people and incentivises employment.

Firstly, we will reform the national minimum wage to make it more adaptive and supportive of young and inexperienced workers by introducing a tiered system. Under this system, wages will be scaled based on experience, starting at one and a half times the upper-bound poverty line for those with less than two years of work experience.

Additionally, we will introduce tax-based incentives for companies by allowing employers to claim 110% of the wages paid to historically disadvantaged employees as an operational expense, thus lowering companies’ taxable income. This incentive will replace all racial quotas.

We will provide wage subsidies for employers who participate in our National Service Year and employ eligible young individuals, so that inexperienced workers can be incorporated into the workforce more easily.

We will also ensure that gender and racial equality is upheld in the workplace. ActionSA will enforce harsh penalties on companies found guilty of racism, sexism and discrimination in the workplace.  

Spatial justice

ActionSA also understands that economic empowerment cannot be achieved without addressing spatial justice. We have to make sure that people have better access to quality housing opportunities closer to where the economic opportunities are, and better access to reliable public transport.

To achieve this, we will launch a comprehensive programme that creates equitable access to property ownership, makes hijacked and abandoned properties available for public housing, and reform the public housing delivery framework to address the massive public housing backlog.

We also pursue sustainable land reform, using the existing legislative framework. We firmly believe that land reform is possible without amending the Constitution, it just requires the political will and support that has been lacking for decades under a self-serving ruling party who has only ever been interested in using the land issue as a political scapegoat.

We will improve spatial justice by adopting innovative and progressive integrated urban planning mechanisms, improving the performance and reliability of mass public transport networks, and by upgrading marginalised communities.

Social Cohesion

What we hope has become clear is that these ambitious goals require not only a commitment from the government but from the whole of society.

True inclusive economic empowerment requires that every South African, regardless of their background, has access to the support they need to overcome socio-economic challenges and achieve their full potential. For this to become a reality, we all need to work together and those who can help others, must help others.

As such, an ActionSA government will cultivate a culture of inclusive leadership across all sectors. We will foster collaborative partnerships with political, business, and community stakeholders and ingrain the principles of empathy and ethical governance in everything we do.

We also believe in the fundamental importance of family and acknowledge that family can mean a range of different things for different people. We will enhance support for all family structures, and we will focus on family planning, sexual and reproductive health, and specialised programs that encourage active fatherhood and parental involvement.

Fellow South Africans,

Inclusive empowerment is critical to building an inclusive and prosperous South Africa.

As long as the correlation between race and access to opportunity remains, we cannot call ourselves a free society. The legacy of apartheid has been perpetuated by three decades of uncaring, corrupt and unpatriotic government. This must change.

Today, we stand at a pivotal moment. A moment where we choose between repeating the errors of the past or stepping boldly into a future where economic empowerment is truly for all, not just a select few. Our vision for South Africa is to be a beacon of hope and action once more.

Together, with your support and our relentless commitment, we will transform this vision into reality.

Let’s choose inclusion.

Let’s choose a prosperous future for every South African.

Let’s choose action.

Because only action will fix South Africa.

Issued by Herman Mashaba, President, ActionSA, 9 May 2024