Quarterly Review

January – March 2016

 

FMF Projects

The FMF’s projects for 2016/17 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.

 

Luminary Award

Through the Luminary Award, FMF identifies unique individuals who inspire others. These individuals, whether local or international, are elected as FMF Luminaries to broadcast and memorialise their achievements.

 

Johan Norberg received the eighth FMF Luminary Award “…for providing a better understanding of our world, especially the science of happiness and intelligence, and which conditions promote global liberty, prosperity and financial stability”.

 

Johan is a freelance author, lecturer and documentary filmmaker, born in 1973. He is a native of Sweden, and a Senior Fellow at the Cato Institute in Washington D.C. and the European Centre for International Political Economy in Brussels. He received his M. A. in the History of Ideas from the University of Stockholm.

 

Sweden, revered by many South Africans because the anti-apartheid movement received proportionately more support from it than virtually any other country, is one of the world’s most prosperous, stable and peaceful countries.

 

Johan demystified the “Swedish model” in his presentation, The Swedish Model: myth, reality and lessons for the world, unpacking the paradox of Sweden being the world’s iconic welfare state while having one of its most capitalistic economies.

 

Johan has written 15 books and edited three, covering a broad range of topics, including global economics and classical liberal thought. His 2003 book In Defence of Global Capitalism has been published in more than 25 countries. More recently, he has written Financial Fiasco: How America’s Infatuation with Homeownership and Easy Money Created the Economic Crisis, which the British magazine The Spectator named one of the “Best Books of 2009”, and which the Financial Times called “good descriptive history and a welcome addition to the literature”.

 

Johan has hosted several documentaries on development and economics, in most cases for American television, including Overdose: The Next Financial Crisis (2010) and India Awakes (2015). For his work, Johan has received the Distinguished Sir Antony Fisher Memorial Award from the American Atlas Foundation and the gold medal from the German Hayek Stiftung.

 

 

Media advisory (available on FMF website)

7-Mar: Sweden’s socialist economic miracle not all that it seems

 

Previous Luminary award winners

The first FMF Luminary Award recipient was Dr Yuri Maltsev “…for his tireless dedication to upholding liberty and the inspiration he brings to the people whose lives he touches”

The second FMF Luminary Award recipient was The Most Reverend Dr Thabo C Makgoba “…for his lifelong dedication to all the peoples of South Africa and for ceaselessly demonstrating the highest level of integrity”

The third FMF Luminary Award recipient was Dr Pauline Dixon “…for her dedication to researching and tirelessly promoting practical solutions to schooling challenges and education entrepreneurship in low-income communities”

The fourth FMF Luminary Award recipient was Dr Sam Motsuenyane “…for outstanding individual enterprise excellence and leadership, consistently demonstrated over many decades in overcoming adversity and inspiring the people of South Africa”

The fifth FMF Luminary Award recipient was Advocate George Bizos “…for his fearless defence of South Africa’s struggle heroes, his tenacious fight for freedom and justice and his dedication to upholding the constitution and the rule of law”.

The sixth FMF Luminary Award recipient was Dr Richard Maponya “…for his outstanding entrepreneurial achievement and leadership as a self-made businessman under the almost impossible conditions of apartheid and being a beacon of hope for aspiring young South African entrepreneurs”.

The seventh FMF Luminary Award recipient was Raymond Ackerman “…in recognition of his role as a great entrepreneur who followed his dream and changed retailing in South Africa for the lasting benefit of all consumers”.

 

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 4 occasions.

 

109 ARTICLES that quote or mention the FMF or originate from interviews or were written specifically for the media were published this quarter. These include Leon Louw’s weekly column in Business Day. The column is published each Wednesday, has been republished on 73 occasions, and since January has dealt with the following:

1. Facts show humanity is better off than ever
2. Firestorm around racism raises questions about double standards
3. Motsoaledi’s prescription for health is incoherent
4. By every objective measure of living standards, things have never been better
5. All eyes on court over ‘collusion act’ clause
6. Land dispossession lives on, even a generation after apartheid has ended
7. Can SA escape the boiling pot in time?
8. A hugely important victory for South African labour
9. ‘Health’ tax bodes ill for societal freedoms
10. It’s not about the sugar, tobacco or booze
11. Trump and Malema appeal to prejudice
12. Is socialism a mental disorder?
13. Rupert’s actions his best reply to critics

 

Also included this quarter are these media articles by FMF Director Jasson Urbach:

1. Labour brokers provide deserved breaks – Business Day
2. It’s time to celebrate drug companies’ investments in vaccines – HMD Medical News
3. Supergirl should make chlorine the hero, not the villain* – The Federalist
4. NHI will impose an unnecessary and intolerable burden on SA – HMD Medical News
5. SA can’t afford a scheme like the NHI – The Star
6. Can we temper the twin evils of poverty and inequality? –bdlive
7. NHI – stop using lies to hide the reality – HMD Medical News
8. Letter – Ketlaphela a bad idea – Business Day
9. Letter – State should stop meddling in private health sector – The Star

 

…and these by FMF Director Eustace Davie:

Indecent consequences of the “decent wage” mantra – Business Day

National minimum wage will hurt workers – IOL

Create conditions to spur job creation – The New Age

 

INTERVIEWS on radio and TV number 22 over three months, some of which are available as podcasts on our website.

 

The FMF has hosted 4 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 11 MEDIA ADVISORIES this quarter. See projects below for more information.

 

Consumer Rights

Consumer rights today are under greater assault in South Africa and the world than ever before. Consumer rights have never been in greater need of explanation and defence in South Africa and the world than they are today. In the past, there was a tendency toward increasing and protecting consumer rights; today, the trend is to destroy the rights of consumers, particularly in the guise of protecting consumers from themselves.

 

Far-reaching health controls with severe implications for consumers have been implemented or are under consideration. What is targeted? Products of greatest significance include tobacco, liquor, salt, sugar, traditional and faith healing, alternative medicines, baby food and junk food. 

 

Media advisory (available on FMF website)

15-Mar: World Consumer Rights Day: 15 March 2016 – Consumer rights slip sliding away. This lengthy background briefing detailed the following consumer rights and explained how each is being undermined by the state: The right to information; The right to health and safety warnings; The right to appealing products; The right to competition; The consumer right to funding; The consumer right to dignity; The consumer right to trade-offs; The consumer right to choose; The rights of adult consumers; and more.

 

New videos on FMF YouTube channel

Consequences of tobacco display ban

“Plain Packaging” of tobacco products – the thin edge of the wedge

Smokers have rights too

 

See also Leon Louw’s Business Day columns: ‘Health’ tax bodes ill for societal freedoms and It’s not about the sugar, tobacco or booze.

 

Economic Freedom / Growth

 

In-house event

On January 13 Dr Yuri Maltsev, Soviet defector and former economics advisor to Russian President Gorbachev, presented A global assault on liberty. He made the following points: Across the global landscape economic, political and religious freedoms are under escalating attack. To an alarming extent, limitations on economic freedom and property rights are coupled with limitations on the freedom of speech, thought, conscience, and religion. From Ukraine to Syria, South Africa to United States we observe a frontal attack on basic human rights and freedoms.

 

Yuri’s presentation can be viewed here.

 

Media advisory (available on FMF website)

26-Feb: Predicted TAX FREEDOM DAY 2016 – May 25 – five days later than in 2015

 

Financial Sector

The purpose of the FMF’s Finance Policy Unit is to promote the application of free market principles to financial markets. Current actions focus on proposed “twin peaks” regulation of which the Financial Sector Regulation Bill (FSRB) is the architecture. The FMF’s legal consultant Gary Moore has prepared a document on the (un)constitutionality of twin peaks for the FPU committee’s consideration.

 

Good Law / Rule of Law

 

Number of acts passed since 1994

In January parliament established an “Independent Advisory Panel on the ‘Acceleration of Change and Transformation’” chaired by former President Kgalema Motlanthe. The key purpose of the panel is to assess the efficacy of legislation passed since 1994 against four identified areas, and to recommend amendments and improvements:

1. The triple challenges of poverty, unemployment and inequality;
2. The creation of and equitable distribution of wealth;
3. Land reform, restitution, redistribution and security of tenure;
4. Nation building and social cohesion.

 

The Panel will conduct its work through public consultations across the country.

 

The panel has their work cut out for them. A total of 1,253 acts were passed between 1994 and 2015, an average of almost 60 acts per annum, or almost 8 acts per parliamentary working month, or approximately one act every second parliamentary working day. Act-passing peaked at 137 acts in 1998 (about 18 acts per parliamentary working month or approximately one every parliamentary working day); and fell to 23 acts in 2009, and to just seven acts in 2015. FMF’s concern is that while the number of acts passed has mercifully fallen, this is not because parliament has learned they can do more by doing less, but because government departments are passing subsidiary laws (regulations, directives, guidelines, standards, etc) outside the parliamentary process.

 

FMF is to develop a project to give input to the Panel.

 

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:

1. to promote a climate of appreciation throughout the country for the rule of law;
2. to identify problematic provisions in existing and proposed laws and, where feasible, work towards correcting them;
3. 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;
4. to challenge legislation that is in conflict with the rule of law in the Constitutional Court.

 

Good Law Project reports

FMF’s sister organisation, the Good Law Project, recently launched the two reports below. Thanks to donations from our members, 350 copies of each are currently being disseminated to judges, academics, parliamentarians, and others.

 

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.

 

The above reports are available at R350 per set from gailday@fmfsa.org.

 

 

Healthcare

 

Media briefing

On January 19, FMF Director Jasson Urbach, presented NHI proposals spell unmitigated disaster for SA healthcare and economy at an FMF media briefing. The long-awaited National Health Insurance White Paper was quietly released by the Minister of Health while South Africa reeled from shock and disbelief at the financial disarray caused by three Finance Ministers being appointed within the space of one week. The deadline for public comment is 31 May 2016. Missing from the NHI White Paper proposals are key details regarding funding, services and staffing. If adopted, the proposals will mean disaster for healthcare in South Africa and the economy in general.

 

The NHI proposals will:

1. Nationalise healthcare and extend the long arm of government into the private lives of individuals
2. Reduce the quality of healthcare provision
3. Drive more healthcare professionals out of the country
4. Create a bureaucracy incapable of handling the huge volume of claims
5. Impose an unnecessary and intolerable burden on taxpayers

 

“Free health care for all” is a disastrous use of scarce taxpayer resources. Government’s role should be to finance medical care for the poor and destitute. To buy this care from the private sector would be the most effective method of supplying high quality health care to the entire South African population.

 

Jasson’s presentation can be viewed here.

 

Media advisory (available on FMF website)

20-Jan: Economically damaging NHI proposals raise questions and provide no answers

 

FMF solutions to healthcare for the indigent

The FMF’s alternative solutions to improved health care for all include:

1. Privatising the provision of health care – via giveaways of public hospitals to those who work in them or sales to those who wish to buy them.
2. Financing health care for the poor – preferably via state-sponsored vouchers, which the indigent can spend where they choose.
3. Encouraging more private hospitals by deregulating the industry and eliminating Certificates of Need.
4. Reducing prices and increasing health care quality through increased competition.
5. Training more doctors and nurses (the number of doctors is limited to 1,300 a year; this number has remained the same since the 1970s despite increases in the population and the disease burden).
6. Allowing the private sector to train doctors and nurses.
7. Encouraging income-producing medical tourism.
8. Retaining skilled South Africans and attracting others by removing the limit on skilled foreign doctors.
9. Deregulating medical schemes so they can offer their clients exactly what they want.
10. Deregulating pharmacies.
11. Removing price controls, which send mixed messages to the industry.
12. Speeding up registration of clinical trials.
13. Giving those who pay for their own health care a tax deduction.

 

 

Jobs Creation / Labour

 

The FMF’s Labour Law Challenge (LLC)

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 was heard in the high court on 22 February 2016. Please note: The FMF was not challenging the constitutionality of bargaining council agreements entered into between labour unions and employer representatives. It was challenging agreements entered into between private parties (large unions and employers) being extended to non-participating employees and their employers. And it did so on behalf of the unemployed.

 

Media briefing on LLC

On February 9, shortly before the case was to be heard, Herman Mashaba, Craig Kirchmann and Leon Louw presented Labour Law Challenge – The facts behind the FMF's labour law case at an FMF media briefing. They argued that S 32 of the Labour Relations Act, the automatic extension of bargaining council agreements, is unconstitutional, destroys jobs and keeps millions in poverty; and explained how the FMF’s case to alter one word in the Act, “must” to “may”, will bring profound change.

 

The briefing can be viewed here…

…and brief interviews with the three speakers here: Herman Mashaba, Craig Kirchmann, Leon Louw

 

FMF media release following LLC court surprise

The FMF was surprised but delighted by the extraordinary developments that took place in the court when the FMF’s constitutional challenge was heard before a full bench of three judges and a packed court. FMF counsel Martin Brassey SC faced an array of South Africa’s top legal minds hired by the Minister of Labour, Cosatu and 23 bargaining councils when he put forward powerful arguments that should succeed on appeal whatever the outcome of the High Court hearing.

 

Early in proceedings Judge John Murphy threw the court into confusion when he said that the bench’s prima facie view was that an extension to a bargaining council agreement by a minister was an administrative act that was subject to Promotion of Administrative Justice Act (PAJA) and Section 33 of the constitution. It therefore had to be fair and reasonable, and subject to Audi (to be heard) by non-parties which includes unemployed citizens and others.

 

He went further to say that it may be that all bargaining council agreements can be subject to PAJA and hence reviewable and that the bargaining council’s request to the minister to extend the agreement to non-parties may also be reviewable under PAJA, thus providing three points of review.

 

What this means is that even before a bargaining council can approach the minister for an extension, the agreement must go through a full judicial review process to prove that all necessary consultation and thought given to the wider socioeconomic circumstances has taken place.

 

This argument, like the FMF’s request for an amendment, has the power to fundamentally change the face of bargaining council negotiations and resulting agreements for the good of South Africa’s labour relations and for the plight of the unemployed and the small businesses that seek to hire them.

 

FMF executive director Leon Louw said, “The alternative argument put forward by the bench took all parties by surprise but would certainly be acceptable to us as we would get more than we asked. Either way, we win. The effect is the same in that extensions to bargaining council agreements must be subject to proper scrutiny, considered thought and due process. No longer can private parties in the bargaining councils compel the minister to extend the agreement without applying her mind. We still believe that the simplest way of achieving this is to change one word from ‘must’ to ‘may’. However, if the court finds that all agreements and the request to extend and the ministerial action or even one of these three actions is subject to judicial review then we have achieved our objective. The 8.3 million unemployed South Africans on whose behalf we brought this case will have won, not just the FMF.”

 

All of the opposing counsel appeared to accept Judge Murphy’s alternative argument and struggled to put forward convincing cases after the early bombshell. Subsequent efforts to raise technicalities were not persuasive.

 

Judge Murphy also made the point that extension of bargaining council agreement may be a violation of the rule of law requirement of Section 1 of the Constitution because they are law made by private people instead of legislators.

 

The FMF has never sought to undermine collective bargaining or remove extensions entirely. This notion was propagated by unions and bargaining councils in an attempt to derail the FMF’s principle point and the premise of the case which is to give the minister of labour discretion in extending agreements and the power to apply her mind.

 

Counsel for the FMF made the point that prior to the 1995 Act, this discretion existed. The LRA then remove a minister’s right to think for his or herself by inserting the word “must”.

 

This landmark case ended early after Mr Brassey gave a forcible response saying the court had made a judgment that either PAJA applied in full or that the court would find for the FMF’s amendment. The decision has to go one way or the other with no room for doubt. He also said that although the FMF accepted the bench’s perspective, it would not abandon its original relief sought in its founding papers.

 

Media advisories (available on FMF website)

25-Jan: Free Market Foundation & Herman Mashaba face Minister of Labour, bargaining councils & unions in court

1-Feb: Three fundamental issues, one simple word: the Free Market Foundation & Herman

15-Feb: Minister Oliphant fights for her right not to think

19-Feb: FMF Legal Challenge starts on Monday 22 February 2016

23-Feb: Judge makes astounding intervention in FMF’s labour law challenge in High Court (see text above)

 

Minimum wages

On March 15, Dawie Roodt, Director and Chief Economist of the Efficient Group, addressed an FMF media briefing on Minimum wage will kill jobs and weaken the economy. Dawie warned of the dangers of interfering with the endless battle between supply and demand which determines the market price for labour. Stable prices and equilibrium last only a moment in all markets; whether it’s for bread, beer, electricity or labour. Government interventions like the minimum wage have unintended consequences. Dawie spoke about the magic of prices and their fight for freedom and how the battle between these two wild beasts always benefits individuals and the economy as long as their freedom is guaranteed.

 

Dawie’s address can be viewed here…

…and a brief interview on the topic here.

 

Media advisory (available on FMF website)

22-Mar: Meddle with the market price of labour at your peril

 

Land Reform

This is one of those rare opportunities where one can get involved in a project with a huge element of heart and compassion; a project that brings hope in the future to your fellow South Africans – Christo Wiese

 

Khaya Lam (My Home) Land Reform Project

On February 9, the Free State government, the Ngwathe Municipality, First National Bank (FNB) and FMF injected R20 million of previously “dead capital” into the local economy of Tumahole township, the Soweto of Parys, when 200 additional tenants became homeowners at no cost to themselves and received full title to their homes worth on average R100,000 each.

 

Khaya Lam (My Home) is an FMF initiative that seeks to reverse the evils of apartheid. FMF Executive Director, Leon Louw, notes: “Black land deprivation was probably the single worst element of apartheid. Since apartheid ended, little has changed. In South Africa today there are still between 5 and 7 million black families living as tenants or without ownership rights in houses they have lived in for generations. There has been no systematic conversion of these “council owned” and “traditional community” properties to full unrestricted ownership. The prospects for economic upliftment throughout South Africa through the Khaya Lam national property titling project are exciting and immense”.

 

Under the project management of Perry Feldman, the FMF’s Khaya Lam project is gaining momentum. A total of 2,780 transfers are in process (over 600 of which have already been finalised). In addition to Ngwathe, FMF has signed or is about to sign Memorandums of Understanding with Cape Town, Grabouw, Graaff-Reinet and Stellenbosch.

 

Khaya Lam is full of feel good stories...

Recent title deed recipients include:

1. Mrs Maria Mothupi who received her title deed at 99 years of age; she was just two years old when the 1913 Land Act banned land ownership by black South Africans.
2. Mr Tsitsi who at 89 years of age cycled to the presentation ceremony venue to receive his first ever title deed.
3. Mrs Mononong, too ill at 89 to attend, but whose granddaughter collected her title deed in her stead.

 

One of our sponsors first sponsored 100 transfers in his company name, then 100 in his private capacity. He has since offered to sponsor 100 each year, half funded by himself and half by his executive team. 

 

Wynn Dedwith, a farmer in the Ngwathe area, has a programme where, every month, he sponsors a few titles for his employees. At his annual Xmas party, his staff became home owners for the first time.

 

Media advisory (available on FMF website)

15-Feb: Real transformation through home ownership

 

FMF’s video on land reform, Imagine living in constant fear of losing your home, can be viewed here.

 

If you would like to sponsor a title deed at just R1,950, please contact gailday@fmfsa.org.

 

Transformation

Some argue that freedom from apartheid has not had a substantial impact on black advancement. Others argue that for blacks to succeed they need government assistance through Reconstruction and Development Policies and Black Economic Empowerment legislation. Others are of the view that economic freedom and growth, the development of a strong legal framework, and good infrastructure and security, are all that is required for the realisation of human potential.

 

The FMF’s Transformation Index will find and analyse empirical data to show actual progress made by black South Africans in various sectors of the economy since 1994. The initial Index must be seen as a work in progress. It will focus on WAGES, comparing black wages from 1994, 2004 and 2014. It will be published in June 2016.

 

Youth

The FMF Youth elected its first executive committee in January 2016, led by FMF Youth Coordinator Phumlani M. UMajozi. The formulated mission statement is – The Free Market Foundation Youth seeks to bring the message of true economic freedom and personal liberty to the South African youth, in order to advance transformation and to address the injustices of the past.

 

Three projects have been tentatively identified by the committee to be the focus of the FMF Youth throughout the year, namely: an essay competition, a taxpayers’ association, and a liberty conference in July.

 

The first Saturday event of the year was held at the end of February, when FMF Board Chairman Ayanda Khumalo gave an introductory talk about the fundamental elements of free markets and free societies.

 

Phumlani, sponsored by the Friedrich Naumann Foundation (FNF), attended a seminar on “Strengthening NGOs – winning support for ideas and their political implementation” in Gummersbach, Germany from 13 to 25 March.

 

Watch this video on the FMF’s YouTube channel: Introduction to FMFYouth.

 

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 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 87 videos on the FMF’s YouTube Channel.

 

FMF makes donation to Egyptian library in Alexandria

At the request of one of our members, in October 2015, the FMF donated FMF publications to the 18th Annual Meeting of the International Friends of the Bibliotheca Alexandrina. Dr Serageldin, the library director, and the Governor of Alexandria, expressed warm feelings towards South Africa and thanked the AES South African Friends of the Bibliotheca Alexandrina for our donation.