The following article outlines some controversial new laws and policies that will affect South African Public Policy in 2018. Many believe that the ruling ANC has embarked on a public policy path of radical populism in order to remain in power in the next election.
South African Public Policy in 2018
Expropriation without Compensation (EWC)
The IRR’s Terence Corrigan describes Expropriation without Compensation (EWC) as a pivotal moment in South Africa’s recent history that threatens the country’s prospects for prosperity and freedom.
EWC is ultimately focused on property rights. While the conversation in the media has focused on the question of land reform, this is only one part of it. The parliamentary resolution calling for the matter to be investigated cites Section 25 of the Constitution. This clause deals with property as a whole, and explicitly does not limit itself to land. Any alteration is virtually guaranteed to have ramifications on other forms of property.
Property rights are essential to a healthy economy. They signify that investments can be made and contracts finalized, and their integrity respected. They provide the fundamental security that makes long-term planning possible.
In South Africa, mining still provides in excess of 10% of the country’s fixed capital investment and remains an important foreign-exchange earner, with gold accounting for more than one-third of exports. The country is estimated to have the world’s fifth largest mining sector in terms of GDP value.
The proposed ‘Mining Charter’ has been described as ‘profoundly flawed‘ by Anthea Jeffery of the Institute of Race Relations in Johannesburg. The draft charter greatly increases the regulatory burden on mining companies in South Africa. Its adoption of a 30% ownership target contradicts all the assurances earlier provided by the Department of Mineral Resources (DMR) that the 26% target was immutable and would not later be changed.
Bankrupt State-Owned Enterprises
Several SOEs are running out of money as well as being run into the ground through mismanagement.
- South African Airways: A disaster year after year with total losses over the past seven years now greater than R33 billion.
- SA Express: also bankrupt but now grounded as a result of failing to adhere to internationally imposed safety and maintenance standards.
- Transnet: In 2008 Transnet was profitable with 3.7 million passengers using its services daily. As fraud, corruption and mismanagement are revealed for the public to see, the true state of mismanagement and corruption becomes apparent. In 2018 only around 1.8 million passengers use its services, a substantial decline over the past decade.
- Eskom: Probably South Africa’s biggest financial catastrophe, with a total debt of about R350 billion now guaranteed by government.
National Health Insurance
The proposed National Health Insurance (NHI) a proposed system which would finance the cost of South African citizens’ essential healthcare, regardless of their employment status and ability to make a payments to the NHI Fund. This has been one of the most contentious issues around South African Public Policy in recent years.
Some claim that if the NHI was implemented, the brain drain, economic collapse and pure misery it would cause would condemn South Africa to developing country status for generations to come.
Some senior medical specialists have apparently said that they will either leave or close their practices if these changes become reality in the next few years.