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Quarterly Review
October – December 2015
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FMF PROJECTS
The FMF’s projects for 2015/16 include: consumer rights, ECONOMIC FREEDOM / GROWTH, financial sector, GOOD LAW / RULE OF LAW, healthcare, JOBS CREATION / LABOUR, land reform, and TRANSFORMATION, as well as ad hoc issues as they arise.
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WINNER! KHAYA LAM (MY HOME) LAND REFORM PROJECT
Awarded since 2004, the Templeton Freedom Award is named for the late investor and philanthropist Sir John Templeton. The award annually honours his legacy by identifying and recognising the most exceptional and innovative contributions to the understanding of individual liberty, free enterprise, and public policies that encourage prosperity.
FMF’s Khaya Lam project was one of six finalists for the 2015 Award. FMF directors Eustace Davie and Temba Nolutshungu attended the award presentation at a gala dinner held on 12 November in New York City.
Commenting at the presentation, Atlas Network CEO Brad Lips said, “This year’s finalists for the prestigious Templeton Freedom Award represent some of the very best organisations in the worldwide freedom movement. Their projects on property rights, poverty alleviation, regulatory reform, and other key policy areas rank among the most exciting and impactful work we’ve seen in years.”
First prize went to the Acton Institute for its Poverty, Inc. documentary. Although disappointed at not winning this year’s award, to be among the final six of a group of such high quality and worthwhile projects from around the world, is a major achievement of which the FMF is very proud.
(See Land Reform below for more on the FMF’s Khaya Lam (My Home) Land Reform Project.)
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MEDIA COVERAGE
The FMF works hard to increase its media coverage and reach as wide an audience as possible with its message about the benefits of economic freedom and growth.
In the last three months, the FMF’s WEBSITE ARTICLES, sent to our mailing list weekly, were republished on 6 occasions.
127 ARTICLES that quote or mention the FMF or originate from interviews or were written specifically for the media were published this quarter. These include FMF Executive Director Leon Louw’s weekly column in Business Day. The column is published each Wednesday and since October has dealt with the following:
– Piketty fails to convince in arguments on inequality
– Nicotine nazis hate one thing: pleasure
– Orania easy to experience but impossible to describe
– Pro-market policies will sustain free education
– Transformation denialism is an extreme form of racism
– ANC denial of strides to change is myopic
– Poor getting richer faster than the rich
– Zimbabwe First Lady’s rape stance defies logic
– Are some people blind or deaf to certain concepts?
– Vodacom, it is time for a proper reckoning
– The lofty highs and dangerous lows of 2015
Also included this quarter are these media articles by FMF Director Jasson Urbach:
– Good intentions are not enough – HMD Medical News
– Growth demands greater economic freedom – Business Day
– Growth and economic freedom are inextricably linked – Rand Daily Mail
– Growth demands greater economic freedom – Polity
– Red tape reduces access to medicines – HMD Medical News
– Piketty’s cause might be noble but his cure is ignoble – The Star
– State should offload SAA divisions – Business Day
– Unbundle SAA into its various subsidiaries and auction them off – Rand Daily Mail
– Nothing wrong with companies seeking tax havens – Business Day
– Minimum wage will only worsen joblessness – Business Day
INTERVIEWS on radio and TV number 14 over three months, some of which are available as podcasts on our website.
The FMF has hosted 2 MEDIA BRIEFINGS this quarter and aims to host one per month whenever possible. The briefings provide journalists with an opportunity to ask in-depth questions about the topic under review. See projects below for more information.
Each briefing is followed by a media advisory to over 1,000 editors and journalists. Additional ad hoc advisories mean the FMF has distributed 8 MEDIA ADVISORIES this quarter. See projects below for more information.
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CONSUMER RIGHTS
FMF remains concerned about Minister Aaron Motsoaledi’s ongoing assault on individual liberty. In recent media coverage the Minister is quoted as saying:
“… government will soon introduce a total ban on smoking and advertising of tobacco and alcohol in the country.”
“The space we gave you to smoke in a restaurant corner and a room in a hospital, we are going to ban it.”
“There mustn’t be a corner for smoking in South Africa.”
FMF Director Temba Nolutshungu: “The FMF approach to interaction with government on policy issues has nothing to do with a specific product and everything to do with principles of liberty, freedom of choice, exchange and action. FMF values are about protecting private property and the principles of freedom without harming others by force or fraud. No government should tell an individual what he or she should do, eat or drink. Governments should educate and inform, not force behaviour with draconian legislation.”
Media advisories (available on FMF website)
1-Oct: Plain packaging – tamper with brands at your peril, warns brand expert
30-Nov: Smoking is not a crime; tobacco is not illegal; Motsoaledi’s call to ban all smoking in all “public” places is an assault on freedom and individual rights
1-Dec: Tobacco point of sale restrictions will hit hawkers hard
New videos on FMF YouTube channel
The impact of smoking bans on property rights
Tobacco advertising and freedom of speech
Educate don’t regulate
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ECONOMIC FREEDOM / GROWTH
In-house events
On October 1 Prof Kurt Leube, a Professor of Economics (emeritus) and Research Fellow (emeritus) at the Hoover Institution, Stanford University, USA, and an expert at the Austrian School of Law and Economics, presented Some of the unintended consequences of the European welfare state. He noted that: “The convenient and irrepressible assumption that every social problem can be resolved by ‘social engineering’ and throwing government money at it has no theoretical base and ignores both the dynamics of markets and of culture. As a result, and despite elegant Pareto efficiency models and politically attractive slogans, the unintended consequences of the welfare state’s ever-increasing flood of assumed entitlements are apt to seriously disrupt the social and moral fabric of European democracies.”
Kurt’s presentation can be viewed here.
On November 18 Chris Hart, Standard Bank’s Wealth and Investment Global Investment Strategist, presented The second watershed. Chris pointed out that South Africa went through a momentous watershed from 1990 culminating in the 1994 elections and that the subsequent success of South Africa as a nation state was founded on strong, credible institutions. He noted, however, that South Africa has since undergone a second watershed, lower key but just as important. This watershed has major implications for the performance of the economy. Chris also talked of the role ideology and corruption is playing in shaping policy in South Africa today.
Chris’s presentation can be viewed here.
Media advisory (available on FMF website)
8-Oct: SA ranks 96 out of 157 for economic freedom
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ENERGY / INFRASTRUCTURE
On October 6 FMF Director Eustace Davie presented Establishing a market for electricity at the distribution level to the Association of Municipal Electricity Utilities (AMEU). He compared New Zealand’s consumer-oriented distribution system to that of South Africa’s. In some areas of NZ consumers can choose between nine or more competing brands and can switch suppliers in under 24 hours. He recommended SA implement the White Paper drafted in 1998 which proposes competition in generation, access to the transmission system and freedom of choice to customers.
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FINANCIAL SECTOR
Media briefings
On October 27 Dr Anthea Jeffery, Institute of Race Relations (IRR) Head of Special Research, addressed an FMF media briefing entitled The DTI’s soon to be finalised “Investment Bill” should be rewritten.
Anthea unpacked the dangers in the then Bill and proposed an alternative measure modelled on South Africa’s bilateral investment treaty with China, which includes all the key protections that foreign investors require.
The government and the DTI have terminated Bilateral Investment Treaties (BITs) with European countries that are by far the biggest sources of foreign investment into South Africa and, since the briefing, have replaced these agreements with the misleadingly named Protection of Investment Act.
Another battle lost, unfortunately. Anthea’s address can be viewed here.
On November 11 Robert Vivian, Professor of Finance and Insurance: School of Economic & Business Sciences, WITS & Leon Louw, Executive Director, FMF addressed an FMF media briefing entitled Twin Peaks – a disaster in the making. Robert and Leon covered the following ground:
- The Financial Sector Regulation Bill (“Twin Peaks”) and the Insurance Bill together constitute a colossal power grab by a rapacious executive intent on gaining unbridled control over the most important sector of the economy.
- To date, no independently verified empirical evidence has been produced justifying the new raft of legislation, and no rational explanation has been offered.
- SA is destined to endure a repeat of the disastrous Financial Advisory and Intermediary Services Act, 2002 (FAIS).
- FAIS did little more that spawn a giant Financial Services Board (FSB), which is one of the most expensive bureaucracies in our history and none of its promised benefits have materialised.
- Consumers through their insurance premiums will bear the burden of the latest regulatory regime and will be deprived of the best products and services.
- Rhetoric to the effect that Twin Peaks is necessary for financial stability, safety and fairness after the so-called 2008 “financial crisis” are spurious and disingenuous.
- All stated objectives can be achieved under current legislation, which is already inscrutably extensive.
- Twin Peaks compounds complexity, red tape and cost. It multiplies regulatory agencies, regulators and staff. It stifles innovation and consumer choice.
- Twin Peaks will destroy jobs and job prospects. It is profoundly anti-transformational.
- After these Acts are enacted, the legislature, police, prosecuting authority and the judiciary will be redundant. Treasury and the FSB will have become a fully-fledged state within a state.
Robert’s brief explanation of Twin Peaks can be viewed here.
Robert’s address can be viewed here.
Leon’s address can be viewed here.
Media advisories (available on FMF website)
4-Nov: Investment Bill is flawed, unlawful, and risks SA’s future
17-Nov: Twin peaks or twin daggers for the insurance industry and consumers?
26-Nov: The FSR Bill must undergo a Socio Economic Impact Assessment (SEIA) to protect consumers
Submission
On November 23 FMF made a written submission to the Standing Committee on Finance on the
Financial Sector Regulation Bill arguing that the bill should be subjected to a Socio Economic Impact Assessment (SEIA). Leon Louw and Temba Nolutshungu also led oral evidence on this issue to the committee. The submission can be read here.
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GOOD LAW / RULE OF LAW
Rule of Law Project
The rule of law is a founding provision of South Africa’s constitution. The FMF’s Rule of Law Project is entirely positive in its objectives. These are:
- to promote a climate of appreciation throughout the country for the rule of law;
- to identify problematic provisions in existing and proposed laws and, where feasible, work towards correcting them;
- to inculcate in all public officials and the public in general a true appreciation of what the rule of law means and why it is important;
- to challenge legislation that is in conflict with the rule of law in the Constitutional Court.
Launch
On November 20, FMF affiliate, the Good Law Project (GLP), launched two reports chaired by Prof Mervyn King SC: Principles of Good Law and Alternative Dispute Resolution Guidelines.
Principles of Good Law provides clarity on the constitutional and jurisprudential principles and values that should be observed in the formulation and implementation of laws in South Africa. When it comes to law-making, a holistic approach is required that involves constitutionality, consistency and clarity, feasibility, impact and cost-benefit assessment, good governance, accessibility, justice that is expeditious, affordable and available to all, and consistent application of the rule of law, rather than the discretionary, subjective or arbitrary “rule of man”. The report includes check-lists, and suggestions for law-making mechanisms and institutions in government with a view to reviewing extant law and formulating high quality new law.
Alternative Dispute Resolution Guidelines provides guidelines that promote the highest standards for Alternative Dispute Resolution (ADR) among ADR practitioners like ombudsmen, arbitration commissioners and tribunals. The report defines the basic requirements of a fair ADR process to ensure access to justice via alternative means, not alternative law. In particular, the fundamental requirements of a fair process – namely the application of substantive law in the determination of the outcome of a dispute and the observance of basic rules of fair procedure in gathering facts and applying the law that is relevant to the dispute.
You can watch Mervyn King on the Good Law Project here: https://www.youtube.com/watch?v=FDti9O7cKaQ.
You can watch the launch here: https://www.youtube.com/watch?v=az9MwgLMNpo.
TO ORDER OR SPONSOR COPIES OF THE REPORTS CLICK ATTACHED BELOW
Good Law Report sponsorship proposal
Submission
On November 1 FMF made a written submission to the Director-General, Department of Human Settlements, on the two sets of Draft Community Schemes Ombud Service Regulations under the Community Schemes Ombud Service Act 9 of 2011 and the Draft Sectional Title Schemes Management Regulations under the Sectional Title Schemes Management Act 8 of 2011 (now there’s a mouthful). The submission can be read here: http://www.freemarketfoundation.com/publications-view/submission-to-the-director-general-department-of-human-settlements.
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HEALTHCARE
See Jasson Urbach’s Good intentions are not enough – HMD Medical News
See Jasson Urbach’s Red tape reduces access to medicines – HMD Medical New
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JOBS CREATION / LABOUR
In-house event
On October 20 Dawie Roodt, Chief Economist of the Efficient Group, presented Labour: How good intentions often lead to economic sabotage. Dawie explained how we are working ourselves into a stupor with nothing really to show for it. The story goes much deeper than twin-deficits and weak performance, but speaks to the very nature of our ideologically confused tri-partite alliance. But, what is a problem without a solution? Dawie offered a solution to labour and suggested how we can get this economy up and running again!
Dawie’s presentation can be viewed here: https://www.youtube.com/watch?v=1y2cIQDM_w0.
Submission
On November 3 FMF made a written submission to the Department of Labour regarding the application by the Bargaining Council for the Hairdressing Cosmetology Beauty and Skincare Industry to extend its Main Collective Agreement to non-parties. The submission can be read here: http://www.freemarketfoundation.com/publications-view/submission-to-the-department-of-labour-re-government-notice-1013-23-october-2015-labour-relations-act-1995.
The Labour Relations Act allows for bargaining council agreements, reached usually between big unions and big business, to be extended to non-parties to those agreements. FMF believes this to be unconstitutional and launched a legal challenge on 4 March 2013 which is to be heard in the high court in February 2016. Please note: The FMF is not challenging the constitutionality of bargaining council agreements entered into between labour unions and employer representatives. It is challenging agreements entered into between private parties (large unions and employers) being extended to non-participating employees and their employers. And it is doing so on behalf of the unemployed. Our campaign is called “Just let me work”.
Media advisory (available on FMF website)
7-Oct: FMF to apply for court date in Labour Law Challenge
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LAND REFORM
Success in Alexandra
After many, many years working with the community to resolve a property titling conflict and land claim in Alexandra township, FMF is proud to announce success. Leon Louw, in his capacity as Executive Director of the then-Law Review Project, has worked tirelessly toward the resolution of a very messy problem (see history below). Agreement has finally been reached and the formal announcement will be made in the new year.
History
- Alex was proclaimed early in the previous century as a “normal” township. In those days property developers decided such things as land use, neighbourhood covenants, and restrictions on which races could occupy. In this case, the developer offered the land to “natives and coloureds”, who acquired the land in full and unambiguous freehold title.
- Leaping a few decades into Verwoerdian apartheid, Alex became known as one of many “black spots” in which blacks owned land in white group areas. Along with most such black spots, all privately owned land in Alex was expropriated and landowners became city council tenants.
- By then most land owners had built middle-class brick houses which exist to this day and are occupied by aged victims, or their descendants.
- Most land owners had tenants living in shacks in their yards – an average of four per plot.
- There were about 3,000 freehold (expropriated) properties with 12,000 tenants.
- Leaping a few more decades to the recent-present, in law all former owners (and their descendants) and all former tenants are in the same legal position as tenants of the Johannesburg City Council.
- Despite this technical legal position, the two groups were still spoken of as “owners” and “tenants”.
- Owners formed two representative groups to try to acquire restitution. There was some litigation, the principle effect of which was to stop the city council developing disputed property.
- Their main activity was to apply for restitution to the Land Claims Commission. The outcome was an offer of R50,000 per claimant / property, supposedly in full settlement.
- Those claimants who signed the contract insist that they were briefed by government representatives to the effect that the R50,000 was compensation for lost rent revenue and that their land claim was still to be resolved.
- The obvious question is why the government did not simply restore land seized by the apartheid regime. This sort of claim should have been the easiest to resolve; there was a clear victim who held undisputed title and no costly willing-buyer-willing-seller redistribution from whites was required. The answer was simply that tenants outnumbered owners four-to-one, which means they were a more important political constituency.
- Owners were intent on persisting with their restitution claim, politicians were intent on securing the votes of tenants, and tenants did not want to find themselves paying rent to or being evicted by landlords. Adding to the confusion, the Johannesburg City Council at one point began “selling” plots to tenants, something the Law Review Project put a stop to as soon as they became aware of it. Although no further sales were made, the legal and political position of tenants who paid instalments added additional complications.
Watch this space for more on how the Alex issue was resolved after going on 20 years!!!
Khaya Lam (My Home) Land Reform Project
FMF has already transferred 354 properties from the council to the legal residents in Ngwathe (Parys), Free State, the Khaya Lam pilot project, with a further 620 transfers in progress. These transfers were made possible by donations from private sponsors. The estimated 20,000 properties requiring titling in Ngwathe have an average value of R100,000, making a total of R2 billion in “dead capital”, to use Hernando de Soto’s description of the properties involved. By end October 2015, Khaya Lam had increased the tradable assets of the Ngwathe community by an estimated R35 million with a further R62 million in progress.
In addition, FMF is working on 200 transfers in partnership with the City of Cape Town and 60 transfers in partnership with Theewaterskloof (Grabouw).
FEEL GOOD SPONSORSHIP / GIFT
If you would like to buy someone a house for Xmas, in your name or that of a friend or family member,
you can do so for a mere R1,850 (price increases 2016). Just complete the form and payment here.
Media advisories (available on FMF website)
27-Oct: Khaya Lam (My Home) Land Reform Project
16-Nov: FMF’s Khaya Lam Land Reform project in final six for prestigious US 2015 Templeton Freedom Award
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TRANSFORMATION
Phinda Madi’s new book Black economic empowerment: 20 years later – the baby and the bath water was launched November 23. It includes a contribution by Leon Louw and is intended to “stimulate the conversation around BEE, with the emphasis and purpose to explore ways of speeding up the transformation process”.
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OTHER
Website and social media
It is now easy to see what is happening on the FMF’s social media whether you have a social media account or not. The FMF’s new website has three “windows” to our social media. Simply go to the website www.freemarketfoundation.com and take a look at the right-hand panel on the home and other pages. This panel has a live feed of Twitter, Facebook and YouTube. It is a very quick and easy way to get an overview of the latest social media postings. There are now 73 videos on the FMF’s YouTube Channel here.
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FESTIVE SEASON MESSAGE
The FMF Board, Executive Committee, Directors, consultants and staff wish our members, friends and fans a rejuvenating Festive Season. We look forward in 2016 to working toward a future filled with transformation, growth and hope.
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Contact Us
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TEL +27 11 884 0270 | FAX +27 11 884 5672 | EMAIL fmf@mweb.co.za
PO Box 4056, Cramerview 2060 | Block 5, Bryanston Gate, 170 Curzon Road, Bryanston
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