"The creeping dead hand of the state"

Two pieces of legislation before Parliament-the Land Expropriation Bill and the National Health Amendment Bill-are unmistakable signs of the ANC's assault on the market and its desire to extend state control over the economy. Their implementation will be nothing short of disastrous for every South African - black and white, rich and poor.

The DA believes that the state has an essential role in promoting economic growth in a market economy. It must do this by extending opportunities to all through the efficient delivery of basic services, securing public safety, offering excellent public education, and policies that retain and attract capital and skills.

The ANC increasingly believes that economic development cannot "spontaneously emerge" from the market. Its alternative is to extend state control of the economy and squeeze out the private sector - a position that will gladden Zuma's backers in Cosatu and the SACP - but potentially destroy our country's economic prospects.

The two bills in question have essentially the same aim. It is to deflect attention away from state failures, by blaming the market and then, perversely, giving more power to an incapacitated state.

The Expropriation Bill would enable the Land Affairs Minister to expropriate land "in the public interest"- a term broad enough to equate to the whim of the Minister. The compensation payable will be determined by the state and will not have to be market related.

By abrogating the principle of ‘willing buyer-willing seller', this Bill threatens the very bedrock of our economy - the protection of property rights provided for in the Constitution. If implemented, we can expect a sharp decrease in foreign and local investment, as well as capital flight.

Evidence shows that the market principle of ‘willing seller-willing buyer' is not the problem. Indeed, research by the Centre for Development and Enterprise indicates that the market transfers more land from whites to blacks than the state. And there is a great deal of land on the market available for such transfer through government-driven land reform, if only government would focus on what is readily available, rather than on what is not.  Its incapacity is hidden under a fig-leaf of blaming the market.

The National Health Amendment Bill would have equally ruinous results. Not content with masterminding the collapse of the public healthcare sector, Manto Tshabalala-Msimang has now set her sights on private healthcare.

At the bill's core is the establishment of a "pricing tribunal" - appointed by the Minister - that will decide how much private hospitals and doctors may charge for their services. The deleterious effect of such intervention is obvious: the supply of private healthcare will diminish (as investors divest and doctors emigrate), shifting the burden to an incapacitated public health system.

If prices are capped too low, we face the prospect of no private healthcare at all, leaving us to wonder where the Minister will go for her own medical treatment. It certainly won't be Chris Hani Baragwanath. When she visited there in 2005, she said: "I always tell people to use public hospitals, but from what I saw today I would also hesitate to come here."

It is true that private health care is prohibitively expensive for the majority of South Africans. But if this is the case, the Minister should request the Competition Commission to look into the possibility of collusion between the big three healthcare providers.

She should also ensure that new hospitals are built to increase competitiveness in the sector. At the moment, the opposite is happening. Between 2000 and 2006, the Gauteng Provincial Government rejected 22 applications for licences for private hospitals between 2000 and 2006. Since 2004, the KwaZulu-Natal Provincial Government turned down 16 out of 33 applications.

Instead of destroying what works, the Minister should be concentrating on fixing what is broken. Innovative solutions, such as public-private partnerships must be found to enable the private sector to share its skills and expertise with the public sector.  Indeed, the private health care sector has expressed interest in exploring these possibilities with government.

In a searing critique of the increasingly statist policy direction of the ANC in Business Day on Wednesday, John Kane-Berman noted that Jacob Zuma had made encouraging noises about labour market reform and foreign policy. He then wondered "whether Zuma has the wisdom, strength of character and leadership skills to turn the ruling party into a different kind of animal."

This is a question that many have been left pondering after Zuma's soothing noises to business at home and abroad and it puzzles me. As far as I am concerned, anybody who sees Zuma as the great hope that will salvage Mbeki's shambolic presidency is delusional.

Not only does Zuma owe his political success to the SACP and Cosatu, who are now calling in their favours, but the party he leads has lost any policy coherence. The interventionism inherent in the Expropriation Bills and the Health Amendment Bills make it clear that Zuma's ANC will seek solutions in increasing state control, when indeed this is the root of many problems, as Eskom so clearly demonstrates.

At Polokwane, the ANC resolved to demand "a strengthened role for the central organs of state, including through the creation of an institutional centre...to prepare and implement long and medium-term economic and development planning". The idea of a central planning ministry, conceived by the SACP, is reportedly gaining currency within the ANC.

Add to this the plans of Public Enterprises Minister Alec Erwin to drastically expand the role of state-owned enterprises such as Eskom and Telkom, as well as the moratorium on privatisation agreed to at the Alliance Summit, and the picture emerges of South Africa 's future under Zuma's ANC.

There was a time when some commentators criticised the ANC and the DA for having similar macro-economic policies. While this was an oversimplification, it is true that the DA admired some of the sterling work done by Finance Minister Trevor Manuel and that we shared the broad underpinnings of the Growth, Employment and Redistribution policy.

Now, there is no chance of confusion. The ANC wants to increase the state control of the economy in a manner that will limit growth by running roughshod over the market. The DA, on the other hand, believes that the state must play a facilitating role. It must do this through extending opportunities so that more and more people have the capacity to become economically active in a stable democracy that retains and attracts investment.

This is why we will reject the Land Expropriation and National Health Amendment Bills in their current forms. Over the coming weeks, we will be setting out our full position on both of these bills, and will do all in our power to prevent them being passed.

This article was published in South Africa Today, a weekly letter from the leader of the Democratic Alliance, Helen Zille, May 30 2008