5 questions: The DA's election promise for BEE
FIN24 / 17 MARCH 2019 - 09:24 / TEHILLAH NISELOW
The Democratic Alliance’s 2019 manifesto promises a government that will prioritise "race-based redress" to empower all South Africans.
Black Economic Empowerment (BEE) has long been a contentious issue within SA's largest opposition party. There are those who believe in the hard liberal line of merit trumping all, and others who see race as a proxy for disadvantage and the need to appeal to the broader electorate.
The party’s head of policy, Gwen Ngwenya, who is viewed as part of the DA’s liberal core, resigned from the position in January, in part over the DA’s stance on BEE.
In August 2018, Ngwenya announced the DA had scrapped BEE from its policy and had a public spat with federal council chair James Selfe. They issued a joint statement later clarifying that the party rejected the ANC’s model of BEE and they would offer an alternative model.
The Broad-Based Black Economic Empowerment Act sets out various codes for companies with ratings based on ownership, management control, skills development, new enterprise and supplier development, as well as socio-economic gradings. Ownership and supplier development have the highest weightings on BEE scores.
The DA’s 83-page manifesto launched on February 23 promises to set the country on economic growth levels of 3% and higher by providing policy certainty to the private sector and scrapping expropriation of land without compensation.
The party is aiming to win 27% of the vote on May 8, up from 22.2% in the 2014 general elections.
Fin24 spoke to the DA’s spokesperson for jobs, MP Geordin Hill-Lewis about the party’s stance on BEE.
Fin24: Why did the DA decide on race-based redress in the 2019 election manifesto, despite internal opposition?
Geordin Hill-Lewis (GHL): There was a lot of internal debate. The manifesto went through a consultation process and then to the party’s Federal Council. BEE started out with a noble intention to diversify the ownership patterns in the country and it morphed into a fig leaf for wide-scale corruption and massively enriched a tiny coterie of people. The economic effects of apartheid are still very much with us; we aim eventually for a South Africa where race is no longer relevant.
Fin24: What is the DA’s stance on BEE?
GHL: Our policy is liberalism in an African context. Empowerment policies must empower ordinary people. The 2015 BEE codes make ownership even more narrow, with the same personalities lapping up every deal. The DA plans to redesign the system.
Fin24: How will the DA change the BEE incentive scheme?
GHL: The current focus is on ownership. This is easy for companies to implement, as they just put a few black people on boards to be in compliance. It’s much harder to establish community and employee share ownership schemes. The DA will incentivise these to allow for new entrants and not the constant recycling of politically connected people in business.
Fin24: How do you respond to criticism that the DA’s stance on BEE is populist and the party is drifting away from liberal values?
GHL: BEE in its current form is actually extremely unpopular among the public. The opinion polls show unanimously that people think it's corrupt. If we wanted to be populist, we would scrap BEE. We believe in widening access to ownership.
Fin24: What is the DA's stance on Employment Equity - should there be quotas in the workplace for black people?
GHL: We oppose race-based quotas; race should never be a barrier to anyone getting a job. The DA will incentivise diversity in the workplace without resorting to hard racial quotas like there were under apartheid. It’s about achieving balance.
*This interview has been slightly edited for brevity.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER