SONA must focus on jobs, the economy, and safety for all

19 June 2019

Tomorrow President Cyril Ramaphosa will deliver the State of the Nation Address (SONA) following the 2019 national and provincial elections just 6 weeks ago. Despite the current fractious position we find ourselves in, there remains a collective sense of expectation that just maybe this SONA will mark a break from the past and charter a new way forward for our nation.

Make no mistake, our country is at the precipice and ready for change. Racial, linguistic and nationalist tensions are worryingly high, the economy is a friend to very few, and the overwhelming majority of South Africans live in fear for their lives and livelihoods. Things are fast approaching boiling point, and the time is ripe for social and economic reform.

As Leader of the Official Opposition, I have been steadfast in my approach towards the President. The DA will not be opposition for opposition’s sake. Mr Ramaphosa will have my full support when he acts in the best interests of South Africa. Similarly, he will face the full might of the official opposition when he acts to the contrary.

Tomorrow the President has a unique opportunity to restore confidence in the country by providing policy certainty that steers our economy towards a path of growth and prosperity. A future in which citizens feel safe, corruption is seriously dealt with, and services such as healthcare and education are delivered in a fair manner to all South Africans.

It is our view that in order to do so, he must make bold, uncompromising decisions despite how unpopular they may be within certain factions of his party. The future of South Africa hangs in the balance, and President Ramaphosa must now show the nation that he indeed is fit to lead.

It is within this context that we today set out the DA’s expectations for the State of the Nation Address.

Jobs and the Economy

The only way to create jobs, sustainably lift millions out of poverty, and give people the hope of a future of shared prosperity is an economy growing at much higher levels. Developing economies across the world have demonstrated that when sustained growth is achieved, more jobs are created, salaries and wages increase, and the quality of life is objectively better.

The key impediments to growth are the supply and cost of electricity, labour legislation reform, fundamental policy uncertainty, uncertainty around the protection of property rights, and low levels of investment – both domestic and foreign.

1. Electricity cost and supply

President Ramaphosa needs to announce government’s intention to allow major cities to procure electricity from any capable supplier, establishing a competitive market for power generation that lowers costs – especially for the manufacturing sector. This would in turn create much needed power for the under-resourced national grid, staving off the need for rolling power cuts. Secondly, the President should proceed with the breaking up of Eskom into separate entities, one for generation and the other for supply. This is the most sustainable way of protecting the grid while allowing new producers to come on board.

This should be coupled with a decision to not allow any more bailouts for Eskom. Our country cannot be coal dependent for much longer, and there ought to be a concerted effort to pursue alternative, cleaner energy sources including wind, solar and gas.

2. Labour Legislation Reform

To mitigate the protracted strikes, the President should implement the DA’s strike ballot proposals. This includes:

- Making it a requirement for ballots to be held before there is a strike action by unions – a key initiative to ensuring all strike action stems from a democratic decision of workers;

- Holding labour unions accountable for any damage to public or private property as a result of strike action; and

- Holding labour unions financially accountable to pay damages to individuals who have successfully brought cases of intimidation and/or assault against trade union members during strike action.

In addition to this, an independent committee tasked with reviewing our rigid labour legislation regime and its impact on investment, growth and job creation should be established.

Our labour policy is some of the most archaic in the world and the main inhibitor to job creation. This labour legislation review would need to include reforming the National Minimum Wage with Sectoral Minimum Wage as the ideal alternative.

We need to explore the option of allowing people to exempt themselves from minimum wage legislation which will allow higher access to work for those unemployed South Africans.

3. Policy uncertainty

One of the primary inhibitors of inclusive economic growth is the guess game many local and foreign investors have to play when it comes to government policy. There exists very little certainty as to government’s “rules of the game”, with doublespeak occurring on a regular basis.

Providing policy certainty is the “cheapest” stimulus that Ramaphosa could announce as it requires no money and would have a profoundly positive effect on business sentiment and confidence.

This begins with the President at once stopping speculation about the role and nationalisation of the Reserve Bank and end the self-defeating discussion on the expropriation of private property without compensation.

There is also uncertainty in the mining sector causing the near-collapse of the industry, which remains a vital export earner and employer in the economy. The dispute over empowerment requirements must be resolved in favour of investment and growth because a greater empowerment share of an ever-shrinking industry is pointless and does not serve anyone’s interests.

In trade, there is a genuine threat that South Africa will suffer as an innocent victim in a trade war between the trade “superpowers.” This is an opportunity to speak with moral authority and make the case for more open global trade based on mutually agreed rules. We should show leadership in this by working to complete the Continental Free Trade Area (CFTA) and Tripartite Free Trade Area (TFTA) urgently.

Such announcements would send a clear signal that South Africa is open for business, which would in turn grow our economy and create much needed jobs.

4. Public investment

In order to invest in infrastructure, we have to cut costs elsewhere as the public purse has run dry. This requires a fundamental spending review focused on the public wage bill, which is clearly unsustainably inflated in favour of very expensive “head office costs” - with not enough allocated to frontline delivery staff like nurses, doctors, teachers, police officers, social workers, and border patrols.

The President should announce a salary freeze on all nonessential public sector posts, with a view to drastically cutting middle management and redirecting that money to funding much needed infrastructure projects across the country.

5. Additional measures

There is an urgent need for SOE reform across the board and the President needs to announce his intention and table a solid plan for full SOE reform of all SOEs.

A moratorium on bailouts to SAA should be announced, and the airline placed in business rescue before the end of June 2019. This would demonstrate that government will not waste another cent on badly run, corrupt SOEs.

The Carbon Tax should be scrapped immediately. It is nothing but a tax on manufacturing, when we should be looking to lower the costs of doing business for manufacturing companies by all means possible. The cost of this tax will be borne disproportionately by ordinary consumers through higher electricity charges and manufacturing businesses and will have no major benefit in reducing carbon emissions, since the greatest emitter is Eskom.

Safety

In recent months there has been an unprecedented spike in violent crimes affecting rural and gang-ridden communities. This follows promises made by President Ramaphosa before the elections to bring about rural safety and security in South Africa.

It is high time the President acts and reintroduces rural safety units at once.

South Africans deserve safer communities and an honest and professional police service that actually serves them. However, provinces remain severely under-resourced, under-trained, under-equipped and under-staffed. President Ramaphosa should therefore also announce his intention to devolve the South African Police Service (SAPS) powers to capable provinces so that the SAPS can ensure more efficient and effective planning and responsiveness closer to the ground.

Corruption

For the past two decades, corruption has seeped into every organ of the state. From the Arms Deal to Nkandla, rooting out corruption requires bold leadership from the very front.

For the past seven months, President Ramaphosa has been embroiled in a corruption scandal relating to Bosasa, a company that has questionable ties to the ANC for over 20 years. The President – and his son, Andile - have allegedly benefitted to the tune of millions from a company well known for bribing government officials. This is now subject to a Public Protector investigation following a complaint I laid.

I have today written to the Speaker of the National Assembly, Thandi Modise, calling for the establishment of an Ad Hoc Committee on the Public Protector’s imminent Bosasa report to interrogate the Bosasa scandal – which includes President Ramaphosa’s dealings.

If the President is truly serious about rooting out corruption, he should have no qualms in publicly supporting my call and subjecting himself to the Ad Hoc committee.

Service Delivery

It is high time the President takes a decisive stand against the South African Democratic Teachers’ Union (SADTU) which continues to hold South Africa and its children to ransom. The union has fought against all accountability for teachers, placing the interests of millions of children second to the interests of union bosses.  The implementation of teacher competency tests and principal performance agreements that SADTU has been blocking for half a decade would be a welcome show of independence from the unions by President Ramaphosa, and he should introduce these tomorrow.

To add to the list of dangerous policies that needs to be scrapped must surely be the National Health Insurance (NHI) which is unsustainable and unfeasible. The President needs to announce that that the NHI will be scrapped.

Conclusion

The question that should be on the President’s mind as he addresses the nation tomorrow is where the country is going and how we are going to get there. If his answers to these questions are in the best interests of the people of South Africa, he will have my full support going forward.

Mr Ramaphosa needs to be bold, brave and uncompromising. He ought to place the nation’s interests ahead of the ANCs interest. Only then will we begin to move our country forward.

Issued by Mmusi Maimane, Leader of the Democratic Alliance, 19 June 2019