With John Steenhuisen's opening paragraph in his article "If you care about SA, join us in fighting Expropriation Without Compensation," one can hear the DA death rattle.
"Of all the bad policies and programmes currently implemented or under consideration by the ANC government, one poses a significantly bigger threat to the future of our country than any of the others, and that is Expropriation Without Compensation (EWC). The unravelling of property rights will put paid to any hope of the kind of investment needed to salvage our failing economy," he writes.
It appears Steenhuisen is startlingly oblivious to the fact that EWC occurs every day. South Africans pay the state taxes on their private property, on wages, salaries, interest, profits, dividends, capital gains, buildings and consumption.
The DA's view on EWC has encouraged a wave of land hysteria like the witches of Salem in Massachusetts in 1692.
The price of land has nought to do with any work or investment of the owner. This is not welcome among the leafy and coastal suburbs of Cape Town. When Jan van Riebeeck landed in 1652, land had no value. But today the average cost of a vacant residential plot in Cape Town is ±R1 million. And that is due solely to population increases, nature's bounty and state spending on infrastructure and services. So land prices are a state subsidy.
Introduction of income taxes
By and large vacant land had no capital value before 1914. That changed when Jan Smuts, the Union's Finance Minister, introduced income taxes. Before 1914 South Africans paid rent to Queen Victoria's Cape Colony.
These were a rates and taxes user charge, excluding improvements. In the traditional Homelands they were hut taxes. In the white settlements, they were perpetual quitrent tenures; pay the rent or quit.
Why else did the English working people risk the dangerous oceans and settle among unfriendly neighbours in another hemisphere?They were part of the 700 000 British agricultural workers who emigrated to the colonies because the Industrial Revolution took their farm jobs.
The DA must decide whether to replace the R1.2 trillion income taxes and vat (2021/22) with rates and taxes surcharges of the same amount. That will reduce the cost of living of 20 million households by R60 thousand per annum. And this will transform South Africa into an international tax haven. It will be distinct from the Panama type tax-evasion havens but similar to what Singapore and Hong Kong have.
Neither of these enclaves has any mining or agricultural sectors but, according to the IMF estimates of 2021, their citizens are the world's wealthiest. South Africa is 99th. That is in terms of GDP per capita at purchase price parity.
In the 1960's South Africans were just as poor as these refugee islanders.
Preferred tax regimes
The economic growth of these two islands is largely due to the fact that foreign direct investors (FDI) prefer the Hong Kong and Singapore tax regimes to South Africa.
South Africa's FDI stock was $139 billion in 2017. In Hong Kong and Singapore FDI was then fourteen and nine times higher at $1.9 trillion and $1.3 trillion respectively.
Contrary to the DA tenets, citizens, therefore, do not need to own land to prosper. South Africa's title deeds will not have to be tampered with.
South Africa, like other smaller countries, will also not be bound to the G7 minimum 15% corporate taxes.
For section 25, our Constitution insists that: "The state must take reasonable legislative and other measures, within its available resources, to foster conditions which enable citizens to gain access to land on an equitable basis."
So when Steenhuisen proclaims, "The DA wants opportunities for investors and job-seekers. We want people to own their properties and to build intergenerational wealth," he must add, "And so we will adopt the Hong Kong model." That way, the leafy and coastal suburbs of Cape Town will applaud him. As will the sandy and windy Cape Flats.