A good development this week was the defeat of the ANC’s attempt to smuggle in the introduction of an electronic voting system under the cover of the many technical adjustments in the Electoral Laws Amendment Bill of 2020.
This bill, as first drafted, would have allowed the Independent Electoral Commission (IEC) to stipulate ‘a different voting method’ for elections at all three tiers of government. The IEC would have been able to introduce an electronic voting system (in place of the current manual one) via regulations that would then have overridden all contrary legislation.
Though manual voting systems are not perfect, they are simple, transparent, and easy to monitor. Electronic ones, by contrast, are complex, opaque, and far more vulnerable to both undetected error and deliberate manipulation.
Strong public opposition to the bill, as mobilised by the IRR and others, forced the portfolio committee on home affairs to backtrack. The intention of the bill, it said, was merely to mandate the IEC to ‘pilot’ an e-voting system in certain districts – and the wording would be amended to reflect this.
But this change would not have removed the risk. A pilot study could be skewed to produce a particular result. And a supposedly ‘successful’ outcome would then be used to neutralise resistance to the shift from manual to e-voting.
The clauses in the bill providing for a different voting method should simply be scrapped, said the IRR, the Democratic Alliance, and others. And this is what the committee has this week agreed. According to ANC MP Mosa Chabane, the IEC needs to refine its proposals for e-voting and make them much clearer. It also needs to conduct international research about similar systems before legislation can proceed.
An important victory has been won through the vigilance and interventions of civil society. But the current gain is only a temporary reprieve. The ANC is determined to retain its failing grip on power and knows an e-voting system that is open to covert manipulation could help it to avoid looming electoral defeat in 2024.
Particularly bad is the recommendation by the National Minimum Wage Commission for major wage increases, which are sure to cause additional job losses. The majority of commissioners – those from labour and ‘the community’, along with several supposedly ‘independent’ experts – propose wage increases of 4.5% (CPI inflation plus 1.5%) for most employees.
Unaffordable
This will increase the current national minimum wage from R20.76 to R21.69 an hour, and take the monthly minimum amount up to around R3 800. But even this relatively small mandatory increase may well be unaffordable for many businesses struggling to recover from the Covid-19 lockdown and the havoc it has wreaked on an already struggling economy.
Worse still, the majority of commissioners also propose an increase of some 16% for farmworkers, who currently (at R18.68 an hour) earn less than the usual minimum. This will bring them up to the R21.69 an hour, which is applicable to most employees and will require an increase of about R350 per month for every farmworker.
Most commissioners also want to increase the minimum wage for domestic workers (currently R15.57 an hour) by some 21% in 2021, with a similar increase in 2022, so as to bring domestic workers in line with the usual minimum within two years. In 2021, they say, this will require ‘an increase of about R450 a month’ for each domestic worker.
In a minority report, however, the three business representatives on the commission warn against double-digit increases in both these spheres. These are likely to lead to ‘dramatic job losses’ at a time when ‘the economy is struggling under the weight of multiple factors like Covid-19, sovereign credit downgrades, and a poor growth outlook… To ignore the current reality in a quest to achieve the intended equalisation is equivalent to prioritising form over substance.’
Adds the minority report: ‘Employers of domestic workers are mostly employees themselves in other sectors. With most sectors already reducing or [barely] maintaining salaries and retrenchments expected to peak,…employers of domestic workers are going to struggle to either absorb huge wage increases or even to keep their employees. In respect of the agricultural sector, research has shown that big shocks in the movement of legislated wages cause extensive job losses… To induce shocks of double-digit wage increases in these sectors, which are large employers, is likely to result in massive job losses and/or increased non-compliance…. [Yet] we all bear a collective responsibility to act in ways that do not increase the country’s burgeoning unemployment problem.’
Unemployment
As the IRR has pointed out, roughly 1.7 million jobs have already been lost in the past year. These include some 72 000 job losses in agriculture and another 165 000 among domestic workers. The expanded unemployment rate, which counts those no longer actively looking for work, has risen to 37.5% in general and to 74% among youths aged 15 to 24. Increasing minimum wages in the ways proposed will lock millions more people out of the labour market – as the ANC is well aware – and prompt an increase in retrenchments.
From the good and the bad we come to the bizarre. Earlier this week Ben Cronin, a state law adviser and implicit supporter (with many others on the Left) of Modern Monetary Theory, wrote in the Daily Maverick that South Africa cannot be ‘on the road to bankruptcy’ or facing ‘a sovereign debt default’.
According to Cronin, ‘our government, given its public finance model, can’t fall into bankruptcy or run out of the ability to pay for its own operations, provided it continues to spend in a currency that it issues’.
The key reason is that the South African Reserve Bank (SARB) has the capacity to ‘create new money’ and is not confined to ‘the transfer of a pre-existing stock of money’. Hence, says Cronin, ‘the South African government through its payment agent, the Reserve Bank, is self-financing. It issues the money it uses to make payments…and can’t run out of its own currency’.
Would that this were so! For then the government would have no need to levy taxes and a host of other dues on a small pool of hard-pressed taxpayers. Nor would it need to embark on expropriation without compensation (EWC), or demand that pension funds invest in poorly managed infrastructure projects aimed mainly at keeping the ruling party’s patronage machine well oiled.
Simply be printed
The R2.1bn the government needs to borrow each day to sustain its spending could simply be printed by the SARB instead. As could the R490bn or so that Eskom owes, the R10.5bn required for the latest SAA bailout, and the hundreds of billions more that are needed to pay public sector salaries and a BEE-inflated state procurement bill.
That the US, the UK, and many other countries have already embarked on massive quantitative easing to counter the devastation of prolonged Covid-19 lockdowns is beside the point. No one knows what the long-term consequences will be – and especially not if lockdown damage results in lower revenues and higher welfare payments over the long term.
In addition, South Africa is hardly in the same league as developed countries or even its emerging market peers. But our Modern Monetary Theorists refuse to let reality intrude on their big idea. That concept is also music to the ears of many in the SACP/ANC alliance, who are determined to avoid constructive reform – and like to think that the government can simply start printing money once it has run out of taxpayers to milk and assets to appropriate.
[Picture: joko narimo from Pixabay]
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