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The DA’s debate on whether race should be a proxy for the disadvantaged will come to a head this week when the party’s commission for economic empowerment sits.
The tense debate around the DA’s broad-based black economic empowerment (BBBEE) policy has spilt into the public domain with provincial leaders and MPs going head to head in a war of words on social media.
City Press has learnt the matter was again debated in a parliamentary caucus meeting last week when it was decided it should be taken forward to the commission.
From there, head of policy Gwen Ngwenya will compile a report, based on the commission’s findings and consultations with structures of the party, which will be recommended to the federal council, scheduled to sit in October, when the final decision will be made.
Ngwenya, who was given the task of drafting the final position, told City Press she would present a number of alternatives to BBBEE at the commission.
“As head of policy I’ve organised a number of policy commissions, one of which will explore our alternatives to BBBEE. I will present these options next week. The question is whether race should be used to identify beneficiaries in any alternative model we adopt. This is as much an empirical question as it is an ideological one.
“The evidence suggests we are able to move towards a nonracial model, based on disadvantage. The principle beneficiaries of such a model will nevertheless be black South Africans, as the majority of the disadvantaged are black. It is therefore difficult to oppose a model that is both principally and empirically sound,” Ngwenya told City Press.
In a draft economic policy, seen by City Press, titled Vula: The “open” economy. Open for business. Open for growth. Open for jobs, the document outlines possible positions the party could take in terms of the economy.
Some who oppose the move to abandon race as a proxy told City Press that they took issue with part of page 11 of the 97-page document which reads: “Wealth accumulation will not be approached from the ‘titans of industry’ model, which views the wealth accumulation process as largely transfer of ownership and management control from one elite to another. Instead, we will focus on home ownership (roll out of title deeds and registrable rights), encouraging savings and intergenerational transfers through reducing taxes on savings and investments, and progressive asset-based taxes. In addition [we] will scrap the disastrous BBBEE policy and replace it with an environmental social governance (ESG) empowerment index backed by a pact for inclusive empowerment.”
Those opposing abandoning race say the mentioned ESG model was the removal of race as a proxy.
Ngwenya said this was not the case, clarifying that the ESG model could include or exclude race.
“Regardless of the model, what might one use instead of race to identify beneficiaries? One option is to use a means test. We make use of means testing in awarding grants for example.
“How does the ESG model work? It would evaluate companies based on their environmental, social and governance efforts. ESG tracking is something domestic and foreign markets are already familiar with. This is but one of the alternatives on the table.”
MP Gavin Davis told City Press that he opposed the use of race as a proxy, saying: “The best proxy for disadvantage is disadvantage itself, which is why I fully support the alternative empowerment framework adopted at the federal council. I’m looking forward to the policy commission, during which we will look at various proposals to empower South Africans who remain economically disempowered and disadvantaged.”
But MP Phumzile van Damme insisted that race remained the best determination for those who are disadvantaged.
“I am looking forward to a vigorous debate at the commission. I firmly believe race remains a proxy for disadvantage and this is still party policy as adopted by federal council in 2013.
“The policy has not changed. At the time the federal council said: ‘A nonracial society is a goal – it doesn’t exist today.’ This remains true today. All indicators, statistics and research agree,” Van Damme said.
Party leader Mmusi Maimane is on record repeatedly advocating that race remains a proxy when the DA revisits it’s BBBEE policy.
The much-anticipated commission will sit on Thursday in Cape Town and will be chaired by MP Dean Macpherson.
