The international Property Rights Alliance (PRA), of which the Australian Taxpayers’ Alliance is the Australian affiliate, has cautioned the South African government against continuing with its proposed policy of expropriating private property without compensation (known in South Africa as ‘expropriation without compensation’ – EWC). Property rights are a fundamental human right and weakening them has only ever led to destitution and strife. There are better ways for the South African government to bring about substantive land reform to empower the poor.
In February 2018, the Parliament of South Africa adopted a resolution that it supports EWC in principle and asked a constitutional review committee to undertake an investigation into whether the Constitution of South Africa, which currently requires government to pay compensation, needs to be amended, and if so, how. The committee is expected to report its findings back to Parliament soon.
The Australian Taxpayers’ Alliance has written to the South African High Commission in Australia to emphasise the importance of private property to a functioning and growing economy.
The author of the 2018 International Property Rights Index (IPRI), Prof Sary Levy-Carciente, said at the launch of the Index in Johannesburg in August 2018, that, “There is nothing more important than freedom. When you lose one of your civil rights, you lose all of them. Please keep yours safe.” Amending the Constitution to take away an established right (to compensation for expropriated property) will potentially have bad consequences down the line for constitutional democracy. Future governments may abuse this new power to undermine political opponents by expropriating their property arbitrarily or may use the power to expropriate property like pensions to fund government programmes.
An amendment to the Constitution of this nature will not only apply to land, which the rhetoric implies. In fact, it will apply to all types of property: physical and intellectual. Pension funds, trademarks, patents, bank accounts, houses, vehicles, heirlooms, etc. will all be subject to taking by government without compensation if the amendment is passed into law.
Without secure property rights, which includes the right to just and equitable compensation, investment and economic growth will grind to a halt. This is because individuals, communities, and businesses no longer trust that the time, effort, and money they put into building businesses and developing properties will be secure from government taking.
There are better ways to bring about land reform.
Millions of South Africans continue to live on property owned by local governments. This is a phenomenon that has been left over from apartheid legislation. The current government should recognize these South Africans as the true and unambiguous owners of their property and give them real title deeds to that property.
Vast swathes of South African land are owned by government and are not utilised or are underutilised. Government can easily transfer much of this land to deserving poor families and communities.
Government-subsidised housing does not come with unambiguous ownership. Instead, beneficiaries’ title deeds include pre-emptive clauses that deny them many entitlements of ownership, such as the ability to sublet or to sell their property for a period of eight years. This is not true property rights. These clauses, which were enabled by the Housing Amendment Act of 2001, should be removed.
While South Africa has after the fall of apartheid had the strongest property rights regime in Africa, this year it lost the first place in the International Property Rights Index to Rwanda after talks of expropriation without compensation began. Globally, South Africa ranks 37th out of 125 measured countries, which is a good static score. However, this year South Africa went down 0.65 points – more than any other country in the world. South Africa did not gain points in any measured components, and indeed fell on each. We regard this to be a direct result of government’s intention to bring about expropriation without compensation.