Last week’s newsletter argued that unemployment, which is now at an all-time record high of 8.9 million jobless South Africans, is SA’s “supercrisis” and that job-creating economic growth is our apex priority.
Political party manifestos must therefore be judged primarily on their ability to produce job-creating local economic growth. As the next Local Government Elections (LGE2016) are just 75 days away on 3 August 2016, now is a great time to compare the manifestos of the biggest parties, the ANC, DA and EFF, to see how they stand up to this objective.
A comparison of the manifestos underscores that there is clear “blue water” between the DA’s approach to local job creation, and those of the ANC and EFF. The key differentiator is that the DA focusses primarily on private sector investment and small businesses as the best drivers of growth and new jobs. By providing the local regulatory and infrastructural environment that will attract and fuel entrepreneurs and existing businesses, big and small alike, the DA in government helps the real job creators – entrepreneurs – to flourish. .
The ANC and EFF, by contrast, rely heavily on the local municipality itself to create local jobs. There are multiple problems with this approach, the main one being that a municipality as employer is necessarily limited by its budget. If investment by business and entrepreneurs is stagnant or receding, this will very soon show up in the reduced size of the municipal budget, which will in turn limit its wage bill.
The second problem is that the bigger the municipality’s wage bill, the greater the opportunities for patronage, corruption and inefficiency and the smaller the budget available for spending on water, electricity, housing, transport and communications infrastructure that improves the lives of poor residents.
The ANC’s manifesto does not put job-creating economic growth centre stage and does not mention a single concrete policy to generate private sector-led job creation, while the EFF actively discourages it, by promising to expropriate private property.
The DA’s LGE2016 manifesto puts job-creating economic growth unequivocally centre stage and proposes concrete programmes and policies to realise this objective. It is primarily focused on producing conditions that will be favourable to investment and starting small businesses: reliable and affordable public transport networks, broadband access, a stable regulatory environment, and a strong focus on transferring title deeds so that residents own their homes/properties and can therefore access capital to start a business:
The core of the DA offer is a focus on …. Creating more opportunities and jobs by (amongst other things):
- Investing in infrastructure led growth that provides the environment conducive to private sector investment that creates jobs.
- Working with local businesses to identify and reduce their biggest challenges so that they can grow and create more jobs. This would include eliminating excessive red tape and simplifying regulations, especially those relating to zoning, planning approvals, health and safety, traffic and licensing.
- Establishing Local Economic Development (LED) one-stop-shops to provide information on investment opportunities, licensing, land use, planning approval procedures, regulatory compliance investor information and business start-up advice to drive and promote job-creating investment.
- Using incentives, such as tariff rebates, to attract new businesses or sectors in line with each local government’s unique opportunities and business environment.
- Ensuring that municipal officials prioritise all applications relating to job creating investments so that local economies grow as quickly as possible and create more employment.
- Ensuring that building plans and land use applications are approved in the legislated time frames and, where possible, implementing e-planning systems. This will reduce the time and cost for businesses, allowing them to grow and create more jobs.
- Using innovative spatial planning techniques that promote economic investment. This will include planning urban developments to promote inclusivity, access to public transport, and telecommunications connectivity. Such planning will ensure that the unemployed in rural and urban areas have greater access to work opportunities.
- Speeding up the delivery of title deeds to state-subsidised housing so that grant recipients have legal ownership of the property where they reside or operate businesses from. This provides homeowners with an important economic asset to leverage.
The ANC’s LGE2016 manifesto does not highlight job-creating economic growth as the apex priority. In fact, it reserves this for education, which is curious since education, while of critical importance, is a provincial rather than local government mandate:
- Promote education as the apex priority in local communities.
The ANC’s manifesto is vague on private-sector job-creating economic growth and completely lacking in any concrete policies or programmes that could fuel it, despite its promise to:
- Develop and strengthen local economies, create jobs and promote job placements, especially for the youth.
It is wonderful to see that the ANC is finally focusing on young people. But their efforts will not amount to much, given that nothing in their manifesto specifically provides for a policy and infrastructural environment conducive to growing the small businesses that could create jobs for South Africa’s 5.9 million predominantly low-skilled and inexperienced unemployed youth.
To the extent that the ANC’s manifesto could be said to have a job creation strategy, the focus is almost entirely on producing public sector-generated jobs.
We applaud the poverty alleviation and training opportunities that programmes such as the Expanded Public Works Programme (EPWP) offer. The public sector is indeed a welcome provider of certain jobs, but it can never compete with the massive job-creating potential that the right conditions could unleash in the private sector. And the public money used to pay for publically-provided jobs and tenders ultimately comes from the private sector, which therefore needs to flourish.
While the ANC’s manifesto is lukewarm towards private sector job creation, the EFF’s LGE2016 manifesto is positively hostile to it, being based on the rejection of private property rights which are of central importance to investment:
- 2a) The EFF’s People’s Municipality will pass by-laws which will expropriate and allocate land equitably to all residents of the municipality for residential, recreational, industrial, religious and agricultural purposes and activities.
The EFF’s manifesto displays no appreciation at all for the central role that incentives and competition, not to mention specialization and comparative advantage, play in the efficient delivery of goods and services:
- 3a) The EFF’s People’s Municipality will create Municipality-owned companies for the efficient delivery of services to the people.
- 3h) The EFF’s People’s Municipality will make sure that a minimum of 50% of basic goods, services and products consumed in the Municipality are manufactured, processed or assembled within the Municipality.
Only the DA has proved that its local government policies work and create real sustainable jobs in the real world. Right now, jobs are being created in the DA-run Western Cape even while they are being destroyed in the rest of South Africa. Unemployment in Midvaal, the only DA-governed municipality in Gauteng, is less than half that for the province as a whole.
In the local government elections on 3 August, you can bring the change that SA needs to create jobs, by voting for the DA. A vote for the DA is a vote for job creating, market-led local economic growth.