Advertisements

EFF Manifesto is more of an EFFing wish list

The EFF released their manifesto yesterday, and considering they’re the third largest party, it is worth looking at.

First, something that hit me in the preamble was this line:

The emphasis on LAND  derives from the fact that 25 years since the attainment political freedom, 80% of the population continues to occupy less than 10% of South Africa’s land.

I’m not sure where Malema got that figure from but… if it is true, it actually isn’t that bad. Only 22% of South Africa’s land is highly arable, mostly due to issues around access to water.

Only about 12% of South Africa’s land is used in crop production.

About 50% of our national water supply goes to irrigation.

Most people will settle near water, so if 80% of our people are not living in the middle of the Karoo – is that really that shocking?

So lets go on to the seven pillars of the EFF’s manifesto.

a. Expropriation of South Africa’s land without compensation, for equal redistribution in use
b. Nationalisation of mines, banks and other strategic sectors of the economy, without compensation

Okay this is a surefire way to ensure we get no investment, either local or foreign, because who would invest under these circumstances? This also devalues all securities in terms of finance.

If the EFF were to win here, you’d have a run on the banks precisely because we’ve all looked at how well the SOEs have run, and the EFF have a bad name for corruption.

 

Worse than that any sector could be declared strategic. More than that here is why communism doesn’t work: If the regulated and the regulator are the same people, the regulator has every motivation not to do its job.

If government takes control of all mines, banks and other strategic sectors, that’s going to include the media under ‘other strategic sectors’ – it always does.

So not only does a government which has not been shown to be competent to run its current portfolio suddenly get a massive expansion of that portfolio – there won’t be any sort of check to make sure that it runs that portfolio honestly or competently.

We don’t trust business, that’s why we have government regulating it, but if government takes over business, the regulated and the regulator are now the same people.

c. Building state and government capacity, which will lead to the abolishment of tenders
This is probably a good idea. Credit where it is due, the tender process has been far too open to corruption, and building government capacity to simply this stuff itself makes sense.
d. Free quality education, health care, houses and sanitation

How are the EFF going to fund it? Recognise when a country nationalises a whole lot of stuff, the country takes the expenses of doing that.

Even if they don’t compensate the previous owners, it is going to take time before they can start running it all at a profit considering unlike those owners, they don’t know what they’re doing, and the ruling party will try to win the support of the staff by raising their salaries.

And at the same time, they’re abolishing tenders – which means that they have to spend the money to develop the capacity to do the stuff that used to go up to tender. That’s going to take time, it may save us money in the medium term but there is still the short term to consider.

Further they can’t offer any security against any loans they want to take, security on South African assets would now be worthless, because they’re nationalising without compensation so they default and it sucks to be whoever was stupid enough to lend them the money.

Particularly considering that nationalising the banks means nationalising all the shares in those banks, and I don’t think international finance likes it when you take their stuff.

If they are doing this, how are they going to fund much else?

e. Massive protected industrial development to create millions of sustainable jobs, including the introduction of minimum wage(s) in order to close the wage gap between the rich and the poor, close the apartheid wage gap and promote rapid career paths for Africans in the work place

Okay so first you’re going to take over massive sectors of the economy, with no real knowledge of how they work, undermining their performance at least in the short term, and now they’re talking massive expansion of their roles?

f. Massive development of the African economy and advocating for a move from reconciliation to justice on the entire continent

How would we be in a position to do this?

g. Open, accountable, corrupt-free government and society without fear of victimisation by state agencies.

You can’t have B and G at the same time. If the government is in control of every strategic sector of the economy, there is no free press, and thus state agencies will victimise whistleblowers and there isn’t terribly much anybody can do about it.

So the EFF’s seven pillars are already looking pretty shaky. Lets go on to the detail, see if there is anything there that makes me think that any of this is workable.

Land – it is very Apartheid

Okay so what do I mean by that? Once the EFF has nationalised the land, it will be responsible for redistributing and allocating it.

Foreigners will not be allowed to live in South Africa, because they will not be allowed to own land, (Point 7) and nobody will be allowed to rent residential land (point 13) – so how are immigrants supposed to live here?

Also, abolishing rentals also abolishes our tourist industry, because when you stay in a hotel, you’re renting the room, unless it is time share, and if you’re a foreigner you can’t own that either because it is still land ownership.

Not only that, but because the EFF will be allocating the land and telling you what land is yours, and you can’t rent anywhere, if you get land in the rural karoo – you can’t live in Johannesburg.

This is a form of influx control.

Jobs – how do we pay for this?

Where is the money coming from? The EFF are pushing zones where companies don’t have to pay taxes, so this is a cut to the tax base, and at the same time they’re pushing subsidies and a “one degree one job” programme.

Corruption

On corruption, a lot of it actually sounds quite good. Credit where it is due – except that I see a lot of these policies dedicated to punishing the corrupt and I see them saying they’ll strengthen protections for whistleblowers.

What you’ve got to understand with that is that most whistleblowers are in a position to blow the whistle, because they’re a bit shady themselves. The corrupt gather the corrupt around them, and measures taken to pile extra punishments on the corrupt can thus be used to keep potential whistleblowers quiet.

Gender

What the EFF wants to do is have mandatory gender equality training for all, as well as 50% representation for women in all fields of “economic benefit, political participation, and managerial and leadership responsibility” 

With regards to gender training they specifically include religion, so I would assume that the 50% representation figure also includes religion, as religious leadership is still leadership.

Okay, I agree with the sentiment, but religious groups aren’t going to go along with this.

The Catholic Church for example, as a matter of doctrine, is not going to have 50% female priests. It is not that I disagree but I could see this being very tricky, and creating a lot of conflict if the EFF sticks to its guns here.

LGBTQI

Credit where it is due I absolutely agree that ‘corrective rapes’ should be subject to harsher punishment. The rest of their position in this regard is also pretty good. Thumbs up, credit where it is due.

Youth Development

See jobs. It sounds great, until you ask where the money is coming from.

Crime

Point 5 on this list sounds strange.

The EFF government will ensure that all police stations are housed in properties owned by the state.

The EFF’s central cause is expropriation without compensation, so all property ends up being owned by the state, so, umm, what?

Most of this is pretty good right up until you get to here:

Racism shall be declared a punishable criminal offence

We already have hate speech laws, this is taking it one step further and entails thought crimes. Under the EFF you will be punished for simply thinking the wrong things.

It is also pretty hypocritical considering Julius Malema’s previous statements regarding members of other races, and black people who happen to agree with him.

And of course there is the fact that control of the land will be granted based on race, so there is already a strong element of racism within this manifesto itself.

Education

The EFF government will introduce free decolonised education for all, advancing topics pertaining to indigenous knowledge, sovereignty and economic freedom in the curricula.

That sounds an awful lot like – indoctrination into EFF propaganda, not education. This is looks to me like what every totalitarian government has tried to do with education in order to control the youth.

Most of this is pretty good stuff, increasing the number of teachers, ensuring that they’re properly trained, making full use of modern technology – it sounds like a lot of stuff we should be doing already, but much like with jobs, where is the money coming from?

Research and Development

The EFF government will triple the amount of research funding available by 2024.

In the higher education section they talk about tertiary education being free. Here they’re talking about tripling our research budget, a policy I absolutely support – except where is the money coming from?

And you see in the same section – yet more subsidies and tax breaks. Where’s the money coming from?

I’m going to skip health because there isn’t really anything to say there, it is decent enough policy, and go on to the big one.

Human settlements

For most of this section what goes through my mind is the same thing that I’ve been saying on everything so far, “How are you going to pay for it?”

But there are a few other issues here too.

The EFF government will make it illegal for banks to repossess houses from people who have paid off 50% of their bonds and are unable to continue paying their bond instalments due to socioeconomic circumstances, by the end of 2019.

So banks would lose a lot of their security.

The EFF government will make it illegal to use houses as surety for any loans from financial institutions, by 2019.

So in other words, people will lose their ability to use their homes as security for loans – which means small to medium sized enterprises have a harder time getting finance.

Not only that

The EFF government will make it illegal for residents to be evicted from private properties unless a suitable alternative is found for them.

So your home gets invaded, you can’t kick the invader out until you’ve found them another home.

If you vote EFF, you kind of lose a lot of the point to owning property, you’ve got no security of tenure because anybody can just rock up and live with you and your ability to evict is gone, and you can’t even use your property as security.

With regards to water, what the EFF is basically saying shouldn’t even really be in anybody’s set of policies – it is just just government will do its job for the most part.

Sanitation is basically the same thing.

Disabilities, is just what any party would say, I’m not bothering with that too much.

Traditional Leaders

The EFF firmly believes that the received western notions of democracy must necessarily be aligned with and adapted to the African way of life, culture, traditions,customs and norms.

The EFF want it both ways. On gender, and LGBTQI issues they want to be thoroughly modern – and yet they want to also, at the exact same time, be traditionalists.

These two idea sets don’t go together, you cannot fight patriarchy while endorsing patriarchal culture, customs and norms.

And democracy is not something that we ‘received’. During apartheid the majority didn’t have democracy, they had the Bantustan system which was all about the African way of life, culture, traditions customs and norms.

Our democracy is not something foisted upon us by America, and it certainly wasn’t forced upon us by that old constitutional monarchy that is Britain, it is something our country achieved itself.

To paint it this way is a mark of exactly what Freedom the EFF are all about – none at all.

Energy

The EFF government will stabilise energy supply through maximally pursuing mixed energy sources,including safe coal, nuclear energy and renewable energy sources.

Remember the nuclear deal, the last straw that broke Jacob Zuma’s presidency? You know the nuclear deal which we couldn’t afford?

where is the money going to come from to pursue more nuclear energy?

Not from electricity fees, because…

The EFF government will give free electricity up to 200kWh per household per month to poor households,and all households will have electricity.

Not only that, but…

The EFF government will scrap all historical electricity debt, including municipal debt, owed to Eskom.

So leaving aside the fact that their policy includes getting rid of independent power producers and such such like, where is the money to keep their promises supposed to come from?

Mining

This is supposed to be the answer to that question, except a lot of our mines are marginal, and commodities tend to be unstable.

Anyway here is a bit I find hilarious.

The EFF government will force mining companies that left denuded mining landscapes to invest in the rehabilitation of these mining areas. As such, the EFF government will force Anglo to rehabilitate the entire Namaqualand Coast and create sustainable jobs from mining rehabilitation.

Okay here is why this is funny. The EFF’s policy is to nationalise all the mines, so they’re going to go to Anglo, and say “Hey’s you’ve to rehabilitate this land!”

And they’re going to make Anglo do this with the power of wishes, farts and fairy dust, because Anglo no longer has any interest in our country that can be threatened.

The rest of the world will obviously help because… you’ve just told them that they can’t own or rent land here, you’ve nationalised a big chunk of they held here, sure they’re going to happily cooperate.

Anglo, to put it bluntly, in that circumstance doesn’t have to do anything.

Banking

They’re nationalising it.

That said, point 30 on this:

The EFF government will regulate and cap interest rates by money lenders.

Our government is already doing this, including this point just shows how little the EFF really knows about the sector.

Social development

The EFF wants to increase grants. Great, where is the money coming from? Free water and elecriticity, great where is the money coming from?

And then I saw this.

The EFF government will make it illegal to lend money to recipients of social grants.

Okay so essentially if you are on a grant and this comes into play, you’ll lose your ability to get finance in order to build your way out of relying on that grant.

Then I saw this:

The EFF government will work with religious leaders, churches and all religious institutions to promote the moral regeneration of society.

Yeah, I’m an atheist. I’ve been looking around at religious leaders, and I see guys who drive expensive German cars telling me that they aren’t rich, I see the Catholic Church engaging in money laundering covering up child abuse, I see the Anglicans and their rather abusive history, I see Islam and terrorism, I see Hindus attacking non-Hindus for eating hamburgers and the list goes on.

And hey, us atheists? No perfection there either, because it turns out that whether you believe in God or not is pretty irrelevant to being a good person.

I have never seen much evidence of religion promoting moral regeneration, and our country isn’t particularly in need of moral regeneration.

We don’t get better people as we go back through time, we get people who sold each other into slavery and thought that genocide was a good way of settling a land dispute.

What we need isn’t moral regeneration, it is moral generation, to be better people than we were, not to seek some golden era of goodness that never was.

State Capacity.

The EFF wants to expand state capacity, so where’s the money coming from? And then there is this:

The EFF government will pay a once-off grant of R1 million to all black graduates who enrol for their doctoral studies

Again where is the money coming from?

I’m going to skip down to the fiscal framework here, because I keep asking the same question, and I want to illustrate why I’ve got this question.

Fiscal framework

The EFF government will maximally collect taxes with the aim of a 20% increase in current annual tax collections.

Everything in this policy set will cost more than 20% than what government is getting in in the form of taxes right now.

Now I’ve already pointed out that they plan have zones that don’t have corporate taxes right? That’s part of their jobs policy.

And they’re nationalising large sectors of the economy, so the transition period will see lower returns, and tax collections will go down from that.

So what are they going to do?

The EFF government will increase capital gains tax and inheritance tax so as to ease the tax burden of the poor and transfer it to the rich.

You can increase the tax, but because of that policy of expropriation without compensation capital profits will be down and likely non-existent, and the biggest chunk of people’s inheritances is land and it is going to take a while for the people who have just gotten the land redistributed to die.

This isn’t going to contribute, sorry.

The EFF government will discontinue the appointment of deputy ministers.

Deputy ministers are actually a good thing to have, because if something happens to the minister you want to have continuity. Also, ministers can’t do everything on their own, so having a deputy actually helps in administrative terms.

The EFF government will increase corporate income tax from 28% to 32%, with a 25% dividend tax, in 2020.

Except you’re going to have zones with no corporate taxes, so that isn’t increase your income.

My take on the whole thing

A lot of what the EFF is proposing here, comes off as if they don’t realise the full implications of their policies, like they haven’t fully thought anything through.

Talking about corporate taxes, and taxes on dividends and all of that stuff – sounds great, until you realise that we’re not going to be an economy where that sort of stuff is all that relevant anymore.

You can’t assume with a policy of expropriation without compensation that this won’t have an impact on capital gains, you can’t assume that the stock market will be the same and dividends will even be declared.

The EFF is pushing a policy of fundamentally changing how our economy works, and banking on the economy working pretty much the same as it does now to fund it.

It sounds good so it has landed in there, but there is no real concept of how it is supposed to work. There some stuff here that does sound like good ideas – but it is a wish list not a plan.

Advertisements

One thought on “EFF Manifesto is more of an EFFing wish list”

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: