Quite frankly I have given up trying to follow the negotiations to form a government of national unity (GNU), multiparty government or coalition, whatever they call it. There’s no point. I’d bet my life that by Wednesday evening no-one could say for certain what was going to happen by Friday 10am, when the National Assembly meets to elect a new speaker and a president.
It is too fluid. Everyone is talking to everyone, or almost, in secret. Others are threatening, or in court. Let’s wait until Friday. We can presume, at least, that the ANC isn’t going to do a deal with anyone who isn’t going to vote Cyril Ramaphosa back into the presidency, at least for now.
The formation of a government should happen in the weeks to come. Any attempt now to divvy out cabinet jobs and titles would be an invitation to trouble. Ramaphosa can be re-elected without a government actually being in place.
The most likely government would involve the ANC, DA and IFP. Others would be more or less welcome but the DA has, I think, made it clear it wouldn’t work with the EFF or Jacob Zuma’s MK. Anything is still possible, but arithmetically only the DA is big enough to guarantee the ANC the presidency on its own.
Needless to say, the prospect of the DA entering government with the ANC has the SA left, from fascist left to middle-class liberal left, in a state of near hysteria. They will recover, but for the ANC and DA in particular, this union, in whatever form it might happen, bristles with danger — for the ANC because it might trigger a party rebellion and the DA because it will now bear co-responsibility for everything that goes wrong. And with the ANC in attendance, just about everything could go wrong.
Nothing gets created here without investment, and before we get serious about investment we have to fix the very basics the ANC has broken.
It is all very well to argue that all the coalition has to do to “win” is get the economy growing again. In reality a huge complex series of things have to go right for growth to happen. For a start, throw out the electioneering nonsense about “creating jobs”. Nothing gets created here without investment, and before we get serious about investment we have to fix the very basics the ANC has broken. There has first to be an economy to invest in.
So that means getting electricity absolutely stable. Then water, then freight, then rail and our broken ports, then crime, then a coherent visa regime. These are elementary elements of a viable economy, but they don’t create jobs on their own. That requires investment, and that requires a private domestic or foreign company or a domestic or foreign entrepreneur to see opportunities here. And once you get that far there may just be a chance they’ll create a few jobs in the process.
But even then you have to make palatable the risks any investor faces. They don’t owe us a living, and yet all of this is extremely urgent. The pressure on the GNU will be immediate and unrelenting and the DA, for its part, is in for a steep learning curve no matter which cabinet posts it gets. It has been able to swan along for three decades in opposition without much in the way of an economic policy. A policy draft appeared just before the election but it may need dramatic revision if the DA is to go into government and not find itself defending policies it cannot implement.
I thought former DA federal executive chair Helen Zille sounded dreadful during a campaign television interview in which she tried to justify scrapping the minimum wage, as the economic policy draft suggests. The current minimum wage is R27.58 an hour, or a monthly R5,378. Zille’s argument was that any wage should be purely up to the employer and employee to negotiate. It implies the DA would be satisfied with citizens — parents — earning a wage on which they simply cannot live. It is extremely unfair and it isn’t a monkey DA leader John Steenhuisen wants on his back going into government.
Incentives
The key to the DA making a difference in any arrangement with the ANC is shifting policy to a reasonable centre. Somewhere between fully pensioned and medical-aided public sector jobs and standing on the corner offering your labour for literally anything there must be a better way. Instead of trying to force investors to do as they’re told could we perhaps consider incentivising them to do what might be beneficial?
If you’re going to be persuaded to pay above the minimum wage, what can the state do for you? More carrot and less stick should guide the economic stance of any government the DA is involved in. Investors should be flocking here to make as much money as possible as quickly as possible. That’s where your growth is.
I suspect the DA will go into the National Assembly vote on Friday without a full deal with the ANC signed and sealed. It’s tricky as hell and it cannot control the politics about to unfold. But beyond agreeing that the constitution is the floor we stand on, it needs to at least try to get one precondition out of the ANC.
It is this: we need a mechanism, supported in the constitution, that makes it impossible for any government to make laws or pass a budget we do not have the money to pay for. In 2010 the UK created an “office for budget responsibility”. Its duty, it says, is to “examine and report on the sustainability of the public finances”.
Its comments on the viability of a UK budget are contained in the budget documents themselves, a vital check on the state. Our National Treasury issues growth forecasts and other targets all the time and gets them wrong all the time. A soft copy of the UK’s office for budget responsibility here, the parliamentary budget office, is all but toothless.
The DA needs some protection going into the lion’s den and I can’t think of anything better than a legal requirement for fiscal responsibility.
• Bruce is a former editor of Business Day and the Financial Mail.
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