Martin van Staden | Head of Policy | Free Market Foundation | mail me |
We have called upon Parliament to repeal the Expropriation Act of 2024. We also urge lawmakers to introduce a just and equitable land reform programme that adheres to both the text and the spirit of the Constitution. This is an essential step toward pursuing real land reform.
We launched a report, Constitutional Land Reform: Alternatives to Confiscation and Land Retribution. This report forms part of our broader Liberty First initiative. The Expropriation Act is not only dangerous and unconstitutional. It also cannot achieve any genuine land reform gains.
Expropriation Act
Expropriation law is the institutional arrangement that determines when and how the state may take property without consent. Its purpose is to safeguard the interests of property owners against potential abuse. The Expropriation Act, however, flips this principle on its head.
It is not strictly a law of expropriation as contemplated by the Constitution. Instead, it is a law that enables confiscation, which the Constitution prohibits. On this basis, and several others, we are joining litigation to have the Act declared unconstitutional.
More than that, the Act is portrayed as necessary for justice and land reform. In reality, it is not a land reform statute. It deals exclusively with granting the state new powers that are unconstitutional. It imposes very few substantive obligations, and not one of these relates to pursuing real land reform.
Constitutional land reform
The report explains that secure private property rights are essential for both economic prosperity and political freedom.
The former minority regime denied private property rights to the majority of South Africans across most of the country. As a result, millions of people became destitute, unfree, and subject to the whims of petty state officials. It is condemnable that the democratic government now chooses to oppose the strict constitutional guarantee of secure property.
Section 25 of the Constitution balances three dimensions. These are the security of property, the desirability of expanded private ownership, and the imperative of restorative justice.
These dimensions are not inherently in tension with one another. Nevertheless, political actors often pretend that land reform is only possible through disastrous policies like expropriation without compensation or outright nationalisation. Pursuing real land reform does not require undermining these constitutional protections.
Expropriation control
The most important short-term recommendation is clear. The current Expropriation Act must be replaced with an Expropriation Control Act. This law would normalise expropriation practice in South Africa and bring it in line with other open and democratic societies.
A good Expropriation Control Act should have two key features. The first is a high degree of respect and deference by the state toward the property owner being expropriated. Remember, these owners have not been found guilty of a crime or a delict. They are innocent victims of state policy, and expropriation law around the world bears this out.
The second feature is market value compensation. This principle is as close to sacrosanct as one can find among free and prosperous countries. It is not open to debate. Investors and citizens alike require an absolute guarantee. If the state takes their property for legitimate reasons, it must not be ruined in the process. They must be compensated in full.
Constructive alternatives
The report sets out multiple constitutionally permissible avenues of substantive land reform. These options can be pursued without jeopardising South Africa’s economic future.
They include:
- Reducing red tape and compliance costs associated with property acquisition and transfer, which remain prohibitive to the poor.
- Eliminating extractive measures like capital gains taxes and capping municipal property rates. Both measures currently allow the state to profit from South Africa’s quest to become a property-owning society. Many potential beneficiaries of land restitution claims instead choose financial compensation after being advised that property taxes will exceed their ability to pay.
- Adopting housing vouchers, as advocated by the South African Institute of Race Relations.
- Undertaking a comprehensive audit of all municipal, provincial and national state-owned fixed property. The aim should be to transfer most of it, in full ownership title, to those lawfully living and working on the property.
- Strengthening the 1994 Restitution of Land Rights Act by removing claims periods and increasing the annual restitution budget. Once restituted, a piece of land should fall out of future consideration for any other land reform programme.
- Undoing three decades of nationalisation of natural resources such as water, minerals and petroleum. Private ownership, whether individual or community-based, should be restored.
- Moving away from “communal ownership” as a proxy for state ownership. Instead, legislation like the 2017 Communal Land Tenure Bill should bestow unambiguous private ownership of property on community formations, without backdoors that enable state rent-seeking.
In conclusion
It is clear that South Africa has many desirable and beneficial ways to achieve equitable land reform. These can be implemented without undermining the non-negotiable property rights that enable a free and flourishing society.
Pursuing real land reform is achievable through these constitutionally sound alternatives. The Expropriation Act of 2024 was never inevitable. Nor does it represent the best version of a law that promotes land reform or reparation.