Trickle-down redress does not work, DA says
DA policy head Gwen Ngwenya says the objective of its draft policy is to respond to the economic exclusion of the majority of South Africans
The DA set out a draft policy on economic justice on Friday that turned the ANC’s version of black economic empowerment (BEE) on its head, saying that economic redress should be aimed only at the poor.
The policy, on a subject that has been controversial and divisive in the DA, will be discussed at the DA’s policy conference in April.
DA policy head Gwen Ngwenya said that the objective of the policy was to respond to the economic exclusion of the majority of South Africans, “rooted in the past of colonial and apartheid oppression”.
Redress policies would target the poor and marginalised as opposed to BEE, “which focuses on the wealthy, politically connected, or tenderprenuers”.
“BEE embodies trickle down redress. The idea was that transferring assets, positions and contracts from one elite to another would result in broad-based prosperity. Trickle-down redress does not work. And we propose a bottom-up approach,” she said.
Beneficiaries would be targeted on the basis of their socioeconomic status so race would not be a criterion for redress. The problem with using race as a basis for redress, said Ngwenya, is that people who do not need redress as they are already relatively wealthy, benefit in perpetuity.
“An ideal policy can address ongoing economic exclusion without perpetuating racial categories. If you can achieve both of those noble goals why would you not?” she says.
Redress policies would, in the main, aim to improve the socioeconomic development of groups of people or communities to increase their access to economic opportunities. Access to individual redress, however, would require a means test, such as that used to determine eligibility for social grants, to decide on who would qualify.
Ngwenya argued that as the marginalised are given the capability to take advantage of opportunities, the economy — even at the levels of ownership — would be racially transformed.
The DA would also not support the use of racial quotas to determine equal access to opportunity in the workplace, but believes that policies should be in place to prevent discrimination of all types. It argues that it is the responsibility of every employer and employee to prevent discrimination through workplace policies and practices.
“It is not sustainable to tackle discrimination by imposing demographic targets or quotas for every demographic group ... the high costs of engineering demographic representivity might be justified if it prevented discrimination but it does not,” reads the document.
Policy on black economic empowerment and affirmative action has caused enormous division within the DA over the years and has been a large factor in internal factionalism.
While many within the DA believe the use of racial categories abhorrent and have railed against ANC-type policies that impose quotas, there are others within its ranks who believe that due to SA’s apartheid and colonial past, race is an accurate enough proxy for disadvantage. They have argued that the DA should embrace both BEE and affirmative action with some minor tweaks.
These, and other policy issues, will be debated by the party in April at a policy conference that will precede a federal congress and the election of a new federal leadership.