E-mail to the treasury – Covid 19 Supply Side Economic Response

Ladies and Gentlemen of the Treasury.

As previously stated, I head up a political party: Direct Democracy Forum Reg Number 936.

I previously submitted on 24/03/20, a proposal based on adopting some of DDF cornerstone policies but note that they were intended to uplift and support the demand side of the economy and only have an indirect effect on the supply side. Their effectiveness depends on the existence of a functioning supply side economy with which the demand side can interact and indirectly stimulate.

The Lock-Down from 27th March to 16th April effectively closes down much of the supply side and therefore the proposed interventions will not work as envisioned.

We are therefore proposing additional measures directed at the supply side in order to maintain a functioning supply side so that the economy does not implode during and can resume after the lock-down. The point being, that after the lock-down, which currently is intended for 21 days but may be longer, an economy supported by interventions of this nature should be able to pick-up where it was before the lock-down. In effect, business will be able to resume pretty much as usual.

In the absence of such intervention, we anticipate that the economy and many of it’s component businesses and industries could become dysfunctional, insolvent or even bankrupt, and may well be unable to resume business as usual, in some cases, if at all. The impact of this on our already dysfunctional economy could be catastrophic. The recent downgrade to junk status does not help.

Our suggestions are that:

1) All historic debt which cannot be paid for by effected businesses should be paid for by funds provided by the state, on a loan basis, to be repaid after the lock-down but without the burden of interest.

2) Funds should be provided by the state to pay for on-going operational expenses, as a grant, for all those business with fixed operational expenses (including salaries and wages) and without existing operational income, for the duration of the lock-down.

3) These interventions can be funded by the creation by the state of the necessary funds. The state could borrow but the funds would then first be created and then advanced by the lenders at interest. Better for the state to create the money themselves without the burden of interest. Perhaps there should be a disaster recovery insurance to give effect to future interventions.

The rationale behind these interventions and behind the state needing to step up and support the economy in this manner, is that the circumstances surrounding the lock-down are not a consequence of economic malfeasance on the part of the businesses making up our economy, but rather of the extraordinary circumstances and responses of the economy and government to the Covid19 pandemic, irrespective of how rational those responses may or may not be, so it makes no sense to burden the players in the economy and jeopardise the businesses and the economy itself any further than they already are. These extraordinary circumstances need an extraordinary response.

While I do not know what the costs of these interventions would be, I believe that the economy should be supported at whatever cost is necessary, while avoiding the unnecessary burden of interest bearing debt, so as to survive until, and regenerate itself after, the threat of Covid19 subsides.

Further details are available at our web site, http://ddforum.co.za. If you wish to discuss any of this you may contact me on +27 76 060 1973 and or at

Thank you for your attention.

John Barrington.
Leader, DDF.
30/03/2020

E-mail to the treasury – Covid 19 Demand Side Economic Response

Ladies and Gentlemen of the Treasury.

I head up a political party: Direct Democracy Forum Reg Number 936.

We have as cornerstone policies:

1) A Senate, drawn from the streets, 2) Tax Reform (Total Economic Activity Levy, Replaces all other taxes) (TEAL), 3) A Universal Basic Income (Including National Health Insurance Funding) (UBI), 4) An Advancement Grant (for tertiary education and other advancement activities) (AG), 5) A Sovereign Wealth Fund (SWF), 6) Banking and Monetary Reform

We suggest the last five items should be adopted to relieve the effects of the Covid 19 pandemic and any subsequent economic fall-out.

Assuming an adult population of 35 Million adult South Africans, a UBI of R5000 per month would deliver R175 Billion into the demand side of the economy, each month. Apart from the obvious economic stimulus this would bring to the economy it would also have the effect of empowering and uplifting every recipient in the economy, and to ‘challenge’ the supply side to claim their share of that stimulus through trade and industry. A UBI is intended to replace all other grants.

A UBI can be paid for by a 2%TEAL on all the money flowing through the banking system. You would not be printing money so much as re-purposing existing money. If you created or borrowed the money you might wish to recycle it using TEAL. A ½% TEAL could also fund the Fiscus.

You can ‘create’ the required money, if you wish (see below*). This is what the banks would do if you borrowed R175 Billion from them, at interest. They would create the money from nothing, as is their wont, then lend it to you at interest. If treasury themselves created the money from nothing instead of going to the banks, treasury would get the money and save the country and the taxpayers the interest.

The ANC are talking of a Sovereign Wealth Fund (SWF). If you stimulate the demand side of an economy without ensuring that the supply side keeps pace, you have a classic inflation/hyper-inflation situation. The SWF can be used to intervene in the supply side of the economy to help it maintain the required balance between demand and supply. This it does by investing in the supply side economy. This, however, would not be the SWF’s sole function. The SWF can be rapidly funded using TEAL and other mechanisms to become effective in this manner, inside of months, or even days (see below**).

Part of the supply side intervention would be for the SWF to own and run commercial, industrial and community banks alongside privately owned and run banks, thus influencing the financial services sector. We believe that the S A Reserve Bank (SARB) should be wholly owned by the SWF and operated for the benefit of the economy, regulating the money supply and interest rates to that end. Any money creation (see above *) would be under the auspices of such a SARB.

The rational for this is that a UBI is an intervention designed to fill the void left by the already existing 4th Industrial Revolution’s lack of formal sector employment opportunities. The Covid 19 pandemic seems just to have accelerated the onset of this dilemma. There is more to this (see below **).

** Further details are available at our web site, http://ddforum.co.za. If you wish to discuss any of this you may contact me on +27 76 060 1973 and or at

Thank you for your attention.

John Barrington.
Leader, DDF.
24/03/2020

The Power of Direct Democracy.

On 17th March 1992, “White South Africa” voted overwhelmingly in a Referendum, to scrap apartheid and to negotiate a new inclusive constitution. In a turnout of 85 % of the registered voters, 69% voted for the proposed negotiations (ie to scrap apartheid) and 31% voted against the proposal.

We believe that this reflected the overwhelming sentiment of the majority of the white population which had prevailed for decades, probably ever since the introduction of apartheid following the 1948 general elections, which delivered a parliamentary majority to white South African nationalists.

On 25th May 2018 the Irish people voted overwhelmingly in a Referendum, to scrap the eighth amendment to the Irish constitution, which in a referendum in 1983, driven largely by the Catholic Church in the guise of a visit to Ireland by the Pope, largely banned abortion in Ireland under most circumstances. This time around, some 35 years later, in a 64% turnout, 66% voted in favour of scrapping the eighth amendment and 34% voted against the proposal.

As part of the Irish ballot, the question was asked for how long had the sentiment expressed in the vote cast existed. Many answered, for decades.

And then, of course, there was Brexit! Yet another example of the will of the people expressed in an act of direct democracy in 2016 which went counter to the wishes, expectations and hopes of the establishment.

The point of this is to illustrate the power of voters exerted in the direct expression of their democratic will by means of a referendum, by the application of direct democracy. Few parliamentary elections generate such high voter turnout and fewer still deliver parliamentary results which express the will of the people so directly and so accurately and very few parliamentary elections deliver such landslide results, except in totalitarian stares where opposition opinion is excluded from the process.

Without the application of the will of the people expressed in acts of direct democracy, apartheid in South Africa and the almost blanket ban on abortion in Ireland and Britain’s membership of the EU, could well have continued ad nauseum.

What these three examples ably demonstrate is that the world’s parliamentary systems are not always aligned with the wishes of their voters so much as being aligned with the will of the prevailing establishment.  This does need to change, here in South Africa, and elsewhere.

Then of course there was the recent US Presidential elections where the will of the people (a substantial absolute majority for Hillary Clinton) was ignored by the establishment in favour of President Donald Trump. It may be argued that the one candidate is no better than the other, but in that instance it was clearly shown that the will of the people was not expressed in the election results.

It can and will be argued that direct democracy also demonstrates the fickleness of the voter population.  But we would argue that it is perfectly legitimate for a voter population to try out a particular political strategy or process and when finding the strategy or process to be wanting, to ditch it.  That is not being fickle, that is being responsible. 

The establishment are largely in fear of direct democracy because they fear populist government and they are less able to control the outcomes of political sentiment expressed by direct democracy, than by influencing the party political system, by various means, including but not limited to the buying of political favour in political parties.

The Direct Democracy Forum’s sentiment is illustrated by the proposed application of direct democracy in the DDF’s proposed SENATE and MUNICIPAL FORUMS and in the use of referendums to resolve political deadlocks, much like occurred in South Africa in the apartheid years and in Ireland since 1983 and in Britain since the 1970s.

DDF SENATE PROPOSALS VINDICATED

There is a saying that all will come to those who wait. Being proactive I am not sure I agree with the sentiment. But recently something happened illustrating it’s relevance.

Some 60 years back in the 1960s, when I was about 15, I was pondering how a political process whereby a political fringe had managed to capture a perfectly adequate dual house parliamentary system and impose a largely unwelcome and undesirable system (the apartheid system) on the masses of the population of a country (SA), could have come about. From that came a proposal for an upper house of parliament (I called it a house of censure) which was drawn from the streets rather than the political establishment, and through which all legislation and regulation must be passed for approval. Of course I was 15 or so, and nothing came of it beyond it being a proposal.

Over the years, the proposal became more sophisticated and concrete and I stopped calling the house one of censure, and identified it as a Senate.

In the 1990s, when the CODESA was in process I submitted my Senate proposal to CODESA l and ll, as many did. The proposal was ignored. I happened at the time to be living across the road from Mac Maharaj, then the ANC’s spin doctor. I challenged him on the fact that my proposal had not even been acknowledged. He stood on the other side of his gate and held his hand about chest high above the ground and said, what did I expect them to do with a pile of proposals that high. The inference being that CODESA was a farce and was merely a vehicle to impose the opinions of the few on the many and is merely a sop to consultation. I learned this form of consultation is typical of the ANC.

Time moved on. In 2012 the Direct Democracy Forum was formed using TEAL and the Senate proposals as the foundation of DDF policies. These policies have since been added to by a Basic Income Grant and a Sovereign Wealth Fund (amongst other policies).

Now in 2018, I read an article published June 2016 in the Guardian’s long read series, by David Van Reybrouck titled “Why elections are bad for democracy” arguing very persuasively that representative democracy and elected politicians are failing us, their constituents, where “common interest lose out to short term and party interests”, and where “winning the next election has become more important than fulfilling the promises made in the last”, and that in it’s place was needed something like “the central principle of Athenian democracy, drafting by lot, or sortition”, where those drafted were immersed in the details of every legislative and regulatory proposal and so could vote from an informed position on the issues. Thus ” a cross-section of society that is informed can act more coherently than an entire society that is uninformed”.

How does that vindicate the DDF Senate policies? It does so because sortition describes exactly what the DDF Senate policy is about.

It is significant that sortition is being used more and more to resolve issues that party-political electioneering and periodic visits to voting stations have been unable to resolve. This has occurred “in the US, Australia and the Netherlands” and most innovatively in Ireland. In December 2012, a constitutional convention began, drawing on “33 elected politicians and 66 citizens, drafted by lot, from both Ireland and Northern Ireland” .. who .. “met one weekend per month for more than a year”.

In this, the Irish approach, the convention drew up proposals to go before parliament. In the DDF approach, the Senate would be required to approve or reject legislation or regulation emanating from Parliament or Cabinet. So one is doing it one way, the other is doing it the other way. But the same essential principle is being applied. Get the approval of ordinary opinion, first or last in the process, but getting that approval is essential, which ever way you do it.

I believe all of this vindicates the DDF’s Senate policy and proposals and although it is a 60 year old story for me, the story still has some chapters to be written. Those chapters cover implementing a sortition Senate and the many more chapters thereafter where sortition builds a better South Africa for all.

Constitutional Reform

The South African parliamentary model is loosely patterned after the Westminster Model with an elected legislature and a second house intended to moderate the acts of the legislature (in UK a House of Lords and in SA a House of Provinces)

The Westminster model has largely been regarded with some respect and has been more or less emulated around the world.  Ok this is probably because Britain was a prolific colonizer and left its stamp on many aspects of the life and politics of its former colonies.  But the Westminster model is under scrutiny, indeed perhaps even under attack, particularly from those who want devolution from a centrist authority.  The most recent attack on Westminster itself came from the Scottish referendum of September 18 2014 on the issue of Scottish independence from Britain, but was defeated by a 10% margin (45% for and 55% against secession).  

None the less, the vote has sparked a great deal of debate about the Westminster style of government.  The sentiment for a greater and closer say in the process of government is developing a groundswell in Britain and elsewhere in the world.  A recent manifestation of this groundswell comes from a group of the world’s mayors, who are pushing for a parliament of mayors.  See Will mayors one day rule the world?

The Direct Democracy Forum might support such a move provided the mayors were directly elected but wonder if mayors would then have the time to also act as members of a national or international legislative body and how would that work?

The idea is interesting but DDF believe that any parliamentary model that does not include elements of direct democracy in it would basically usurp the rights recognized by the DDF, for a population to approve all laws and regulations by which it is governed.  

This is the core of the DDF‘s Senate model, that a legislature can be appointed in any manner provided it is directly answerable either to the electorate as a whole, by referendum, or to a senate representing that electorate, such as suggested in the DDF‘s proposal for a Senate.

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The DDF or DIRECT DEMOCRACY FORUM   is a South African political party registered with the IEC (reference 936). The DDF has two main agendas that go beyond normal political party undertakings.    They are:
  1. Create an UPPER HOUSE OF PARLIAMENT or SENATE, populated by random selection from volunteers from the streets.
  2. Adopt TEAL (Total Economic Activity Levy) as the only source of state revenue, replacing all other taxes and levies.

These two agendas will restore politics to the people and tax all participants in SA’s economy fairly and equitably