EEA will only lead to more job losses – IRR

South Africans are in for a shock if they think that the country will easily bounce back from the jobs blood bath shown in Stats SA’s latest Quarterly Employment Statistics (QES).

So says Mlondi Mdluli, Campaign Manager at the Institute of Race Relations (IRR), which held an online media briefing yesterday on its opposition to the amended Employment Equity Act (EEA) and the Draft Employment Equity Regulations. These measures will make the South African jobs crisis even worse.

Unemployment in South Africa is caused by a number of factors, not least bad and job-destroying policies. The amended EEA and the proposed regulations that go with it are just one example.

The latest EEA measures are the more aggressive BEE which Employment and Labour Minister Thulas Nxesi called for in July 2021. But race-based policies are not new. They have been implemented for more than a decade, and they have not worked. Instead, their intended beneficiaries continue to suffer, while a select few among the politically connected elite flourish.

In the briefing (slides and recording available here), Mdluli and colleague Marius Roodt spelled out the flaws in the legislation and the Draft Regulations, and set out details of the IRR’s proposed solution to South Africa’s empowerment logjam.

Mdluli said that the IRR would continue to fight against the implementation of the amended EEA and the draft Regulations in the same way that it had opposed all race-based policy since its inception in 1929. Mdluli also pointed out the extent to which the legislation and its associated regulations were inconsistent with the Constitution. He said the IRR was putting together a legal strategy to oppose these measures in the courts.

Turning attention to the IRR’s Economic Empowerment for the Disadvantaged (EED) policy proposal, Mdluli and Roodt explained that, in addition to the BEE scorecard being replaced by an EED scorecard that would reward job-creation, higher tax and foreign exchange earnings, and innovation, the EED system would introduce tax-funded vouchers for the key services of education, healthcare and housing. Such government-funded vouchers would be available to means-tested South Africans earning below a certain amount to pay for schooling, medical care, and housing options.

The vouchers would be funded by redirecting – not increasing – the budgets of the affected departments. Tax-funded education vouchers, for example, would give all parents a choice of schools for their children, freeing them from having to rely on government services.

Schools would then have to compete for the custom of voucher-bearing parents, which would give them a real incentive to improve the quality of the education they provide. A similar approach would be applied to healthcare and housing.

Says Mdluli: Our press briefing was an opportunity to provide the public with an update on our fight against the EEA and the draft Regulations. Setting up racial targets that produce racial moratoria on hiring – as took place at Dis-Chem in 2022 – is the opposite of non-racialism. It is clearly evident from the results of polling that we presented during the briefing that most people reject this approach. They want an expanding jobs market, not a shrinking one. The implementation of the amended EEA and the Draft Regulations will significantly deter job creation, which we will not allow.”