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Property confiscation will negatively impact the poor – Free Market Foundation

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Property confiscation will negatively impact the poor – Free Market Foundation

Martin van Staden
Martin van Staden

25th June 2021

By: Thabi Madiba
Creamer Media Senior Research Assistant and Reporter

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The Free Market Foundation (FMF) has maintained that property confiscation and nationalisation will not resolve the country’s land dispossession legacy, instead, it will make life even more difficult for the poor.

FMF published a new research paper 'Private Property, Public Interest: Alternatives to Confiscation and Nationalisation' highlighting the dangers of property confiscation and nationalisation, explaining that confiscation, also known as expropriation without compensation, and particularly nationalisation, amounts to the stripping away of all South Africans’ property rights.

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Author of the paper Martin van Staden said aside from its political disenfranchisement of black, coloured, and South Africans of Indian descent, apartheid’s greatest crime was its denial of the common law property rights protection enjoyed by whites.

Van Staden said those who can afford to leave South Africa will do so but for the majority, this will not be an option.

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“Property rights are a vital ingredient for countries that wish to achieve a high level of economic prosperity for the majority of their citizens. The 'Economic Freedom of the World Report' shows that the poorest 10% of people in countries in the top quarter of economic freedom have incomes nearly eight times higher than their counterparts in the lowest quarter economically free nations over the 2000-2018 period,” he explained.

Notably, the higher a country ranks in the report, generally, the stronger the property rights in said country.

Parliament is on the cusp of amending the Constitution to allow the government to confiscate property without compensation, and even nationalise all fixed property. The Expropriation Bill, being separately considered, is the means through which the government will try to achieve this.

Meanwhile, he explained that to adequately address the causes of the decade of State capture and looting during the Covid-19 pandemic requires the avoidance of policies that increase the discretionary powers of Ministers and officials, as confiscation would entail.

“The kind of transformation the country needs is of the empowering kind, as opposed to the kind that would strip away South Africans’ property rights,” he added.

Van Staden argued in the paper that South Africans must not repeat the easily avoidable mistakes of the past.

The paper can be accessed here: Private Property, Public Interest: Alternatives to Confiscation and Nationalisation

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