The Free Market Foundation (FMF) has released its five non-negotiable terms in the formation of a national coalition government or ‘government of national unity,’ should the parties reject a confidence-and-supply option.
‘The FMF remains committed to a confidence-and-supply “no-alition” arrangement as the best way forward for the country,’ says David Ansara, CEO of the FMF. ‘However, if the political parties do decide to go the formal coalition route, they must embrace federalism, privatisation, labour market liberalisation, private property rights, and healthcare reform as preconditions for any such arrangement.’
These preconditions should be given legislative effect within the first month after Parliament’s first sitting on Friday, 14 June, to ensure the new administration is legally bound to grant the concessions.
1. Federalism
The rapid economic and political decline which South Africa has faced in recent decades has primarily been a symptom of the over-centralisation of political authority. Consequently, the single most important element of reform should be a radical decentralisation of political authority to provinces, municipalities, and communities to empower them to fix the myriad problems facing their constituencies without undue interference from central authorities.
By recognising the legitimate sovereignty of these spheres of government, they will be empowered to act more independently, with both the authority and the means to manage matters such as policing, transport, and energy.
To this end, the FMF recently launched its Campaign for Home Rule to encourage a more federalised approach to governance.
2. Privatisation
South Africa’s economy is characterised by high levels of state ownership, particularly in the so-called ‘network’ industries, such as electricity, ports, and rail. Underperforming state-owned enterprises act as a chokepoint on the South African economy by disrupting supply chains and increasing costs through inefficiencies. Moreover, their persistent financial losses have acted as an additional burden on the already overburdened South African taxpayer.
Chronic mismanagement of crucial industries cannot be allowed to persist if we hope to generate tangible reform and move towards greater prosperity. Key state-owned enterprises such as Eskom, Transnet, and PRASA, should be privatised in whole or in part.