DA proposes new bill to uplift the poor in place of BEE

The DA has introduced legislation in parliament aimed at replacing B-BBEE with a poverty-based inclusion framework, marking a significant shift in the party’s long-standing position on empowerment policy.

The bill, known as the Economic Inclusion for All Bill, was introduced as a private members’ bill and will now proceed to its first reading in the national assembly, after which it is expected to be referred to the relevant parliamentary committee for further consideration.

Briefing the media ahead of the bill’s tabling, DA chief whip George Michalakis said the proposal seeks to move South Africa away from what the party describes as a race-based empowerment model. He said the intention is to ensure that redress is targeted at poverty.

Michalakis said the DA has, through parliamentary questions, oversight work and debates, consistently argued that B-BBEE has failed to broaden economic opportunity. “We raised how it is abused in procurement, how it inflates costs to the state, and how it channels opportunity to a small, politically connected elite instead of millions who remain excluded from our economy,” he said.

He said the party’s view is that the system rewards compliance on paper, encourages fronting and corruption, and limits access for small businesses without political connections. “What is clear after decades is that BEE does not broaden opportunity. It concentrates it,” he said.

DA head of policy Mat Cuthbert said the bill does not reject the principle of redress but aims to restructure how it is implemented in public policy. He argued that the current framework is overly focused on compliance and ownership structures, which has not delivered broad-based economic participation.

Cuthbert said the bill represents a shift from ownership-based scoring towards outcome-based measurements. “Empowerment is based on actual disadvantage and real contribution, not political proximity,” he said.

Central to the legislation is reform of public procurement, which the DA estimates at about R1.2-trillion annually. The party proposes that procurement decisions should prioritise value for money while incorporating measurable indicators such as job creation, investment in communities, and support for small and emerging businesses.

Cuthbert said: “Instead of rewarding compliance, we can focus on how businesses that contract with the state reinvest in communities, create jobs and develop skills.”

The bill also proposes the removal of race-based preferential procurement provisions and their replacement with a system that uses poverty as the primary proxy for disadvantage. Cuthbert said the intention is to ensure the targeting of socioeconomic need rather than identity markers, while still reaching historically disadvantaged communities.

He added that alternative empowerment mechanisms, including employee share ownership schemes, are being proposed to broaden participation beyond traditional equity transactions.

“We have seen procurement rules being bent to benefit politically connected individuals, with contracts awarded at inflated prices and little regard for value or delivery,” he said.

“What is presented to us is an empowerment system that has become a mechanism for extraction rather than economic opportunity.”

Cuthbert has further indicated, based on modelling conducted with external stakeholders and think tanks, that procurement reform of this nature could result in potential savings of between R70bn and R80bn, largely through the reduction of inefficiencies and pricing distortions. These figures have not been independently verified.

Michalakis said the party had already begun engaging stakeholders and other political parties about the change.

“We are quite serious about making sure that the end goal is to get this enacted, not just a private member’s bill that goes nowhere.”

The proposal forms part of the DA’s broader policy position that B-BBEE has not sufficiently addressed inequality in democratic South Africa.