The DA’s shadow minister of labour Michael Bagraim says his party will fight the ANC-driven proposal that will force thousands of South African estate agents to hand over to new owners or close down their businesses. In this vibrant interview with BizNews editor Alec Hogg, Bagraim also discusses suggestions that the party’s weakening in the polls is directly correlated to a refusal to rule out a coalition with the ANC (as a ‘least worst’ option for SA after May 29.)
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Highlights from the interview
In the interview, Michael Bagraim discussed the implications of proposed racial criteria for estate agents’ fidelity certificates in South Africa, particularly regarding Black Economic Empowerment (BEE). BEE is a policy aimed at redressing historical inequalities by promoting the economic participation of Black South Africans.
Bagraim criticized the idea of linking BEE directly to estate agents’ certificates, arguing that it could have negative consequences for the industry and economic activity. He saw this move as a form of social engineering reminiscent of apartheid, where race-based policies dictated economic opportunities. By imposing BEE requirements on estate agents, Bagraim suggested that the government was interfering with market dynamics and potentially harming small businesses.
Furthermore, Bagraim questioned the effectiveness of such measures in creating real economic empowerment. He pointed out that closing businesses through restrictive policies would not lead to meaningful job creation or economic growth. Instead, he advocated for policies that promote entrepreneurship and business growth without arbitrary racial criteria.
Overall, Bagraim’s comments highlight the complex and contentious nature of BEE policies, especially when applied in ways that could stifle economic activity or lead to unintended consequences for industries like real estate.
Extended transcript of the interview ___STEADY_PAYWALL___
00:00:08:23 – 00:00:42:02
Alec Hogg: Michael Bagraim is well known as an attorney and lawyer, but most recently, he’s been in politics. We’ll find out exactly why he decided to do that. But on Friday, he issued a statement about the intention of the South African authorities to change the rules for estate agents. And effectively, as he describes it, it’ll force them into BEE transactions, otherwise lose their fidelity fund certificates, which is an existential risk.
00:00:42:02 – 00:00:50:22
Alec Hogg: What that means is they’ve got a business. We’ll find out more about it today.
00:00:51:00 – 00:01:09:17
Alec Hogg: Michael, we’ve been picking up on this story with Piet Le Roux from Sakeliga. And it’s interesting to see that you’re the first political party that’s come out and said anything about it. But before we go there and you will be able to unpack for us, being a lawyer, exactly what all of this means. What brought you into politics?
00:01:09:19 – 00:01:42:18
Michael Bagraim: Okay, I was brought in, in fact, later on in life. I’ve been practicing labor law now for almost 45 years. Long before the new dispensation, and part of the practice of labor law, I got involved with trade unions and the trade union movement, and in particular, the involvement in the trade unions. I strongly believe those were involved in the bringing of the end to the apartheid regime.
00:01:42:20 – 00:02:06:10
Michael Bagraim: And I was very proud of COSATU, and I was very happy with them. I represented a lot of trade unions in those early days, and I was approached by the Democratic Alliance, in particular, Helen Zille at the time, to come in and say, well, what about coming into politics, representing the labor voice within the Democratic Alliance?
00:02:06:12 – 00:02:27:15
Michael Bagraim: She said something that was quite rude. I’m not sure if I can say that, but what she said, “What about coming into the tent and pissing out instead of standing outside the tent pissing in?” I quite enjoyed that at the time. And obviously, at the time, I was also a member of the Democratic Alliance.
00:02:27:16 – 00:02:54:09
Michael Bagraim: I believe in their policies. I was very happy. I helped write some of the labor policies, and I was invited. It’s now ten years I’ve been in Parliament, and most of the time, I’ve been the deputy shadow minister of labor. Now, the shadow minister, after the retirement of Dr. Michael John Cardo, and I’ve enjoyed it. Absolutely love it in the portfolio committee.
00:02:54:11 – 00:03:17:08
Michael Bagraim: In fact, to the extent that I’ve spent a lot of time training some of my colleagues from other political parties in labor law, not the politics, just the labor law itself. We’ve got some very good labor laws in this country. You might recall, right? Right in the beginning when President Mandela came in, he said, we need labor laws that everyone will understand.
00:03:17:10 – 00:03:40:02
Michael Bagraim: And in fact, it’s very simple. The labor laws, people look at it as a complicated area of law, but it’s not like income tax law, all that heavy stuff. This is for simple people like me, and labor law itself, to a large degree, is fair. To a large degree, it’s doing what it’s supposed to do.
00:03:40:04 – 00:04:19:19
Michael Bagraim: Like institutions such as the CCMA, the Commission for Conciliation, Mediation, and Arbitration is a wonderful institution. It’s just the government that seems to be hollowing it out. And that’s been my problem all along. The governing party, the ANC, seems to have taken what is good law and bastardized it. And we’ve seen this all the time. We’re seeing it right now with the property practitioners’ situation that they’ve been placed into, that the government somehow wants to destroy business, and I’m not sure why. I don’t understand it other than probably looks good right now for the elections coming up.
00:04:19:19 – 00:04:47:03
Michael Bagraim: It looks like they’re doing something when in fact, they’re doing nothing but negative. So, yeah, my days in politics and in the labor portfolio have been good for me. I’ve been happy. I haven’t been all that successful, I must admit, because somehow people just vote me down. Probably because of where I’m sitting, but at the end of the day, I’ve made little incremental moves.
Read more: Sakeliga attacking ‘next-level’ BEE, advises more State-proofing no matter who wins Election’24
00:04:47:03 – 00:05:12:03
Michael Bagraim: And when I saw this, now that the property practitioner actually got a fright because both you and I know that the majority of property practitioners are mom-and-pop shops. It’s a person who sets themselves up. It’s quite an easy industry to get into. It costs very little to set up. You need a few billboards and maybe a laptop, and then you’re in.
00:05:12:03 – 00:05:35:01
Michael Bagraim: You write an exam, you go into the regulatory authority, write the exam, become an estate agent, and off you go. And the whole idea of being that you’ve now created some employment for yourself and maybe one or two other people, that’s the majority. There are some of the big ones, some of the big agencies, and they probably don’t mind what’s going on over here.
00:05:35:03 – 00:05:59:23
Michael Bagraim: But I think this will kill about 6000 businesses in the industry. It’ll kill them because, I mean, if it’s Michael Bagraim who sets himself up with a couple of billboards and a certificate under my arm, and I love selling property, and now I suddenly have to become 50% BEE compliant. Well, that’ll be the end of me.
00:05:59:23 – 00:06:29:09
Michael Bagraim: And I’ll have to go and practice in Botswana or somewhere else. I can’t stay here. I don’t know that that’s maybe part of the reason is because I represent a lot of estate agents as well, and they’ve all looked at me and said, “But this is absolutely crazy.” I mean, I employ two people. Most of them are saying one of them is a receptionist lady, office administrator, and the other one is another estate agent to help me.
00:06:29:09 – 00:06:56:21
Alec Hogg: Yeah, something that occurred to me the other day when I was told about this is that with most small businesses, you have a revenue of 10 million rand as your threshold before you lose your BEE certificate. Is it the same in the estate agency? Because a guy was saying to me that no, in our industry, it’s already only 2.5 million rand, and then you lose your job.
00:06:56:23 – 00:06:58:20
Alec Hogg: Was it micro? My.
00:06:58:20 – 00:07:00:19
Michael Bagraim: Micro? Yeah. Micro industry.
00:07:00:19 – 00:07:01:22
Alec Hogg: Micro-enterprise. Yeah.
00:07:02:00 – 00:07:26:21
Michael Bagraim: SMME yeah, that’s true, but it looks like we’re moving beyond the turnover. And that’s going to be the problem. It looks like this is pernicious. This is not describing that at all. It hasn’t, first of all, let’s just be clear. It hasn’t become law yet. It’s a proposal that hasn’t come into power as yet.
00:07:26:21 – 00:07:45:05
Alec Hogg: Sorry, but let’s just go back, if you don’t mind. If you don’t mind, just go back a little. So, in other words, for all other industries in the country, once you go beyond 10 million rand turnover, then you lose your micro-enterprise BEE certificate. But with estate agents, that kicks in at 2.5 million rand. Is that correct?
00:07:45:05 – 00:07:52:18
Michael Bagraim: We think so. In terms of the future, now, yes, that’s correct. At the moment. But I don’t—
00:07:55:05 – 00:08:18:02
Alec Hogg: Sorry. So you’re taking it further now. So, that’s already been discriminated against if that is correct. And you said it is. So now it goes one step further, where if you don’t have 51% black ownership in your company, which might be a mom-and-pop shop of three people, you will lose your fidelity fund certificate.
00:08:18:04 – 00:08:19:18
Alec Hogg: Which means what?
00:08:19:19 – 00:08:37:11
Michael Bagraim: Which means you can’t trade unless you want to do it illegally, but you can’t do it. It’s illegal, and I know these people are not going to go and do something that’s illegal for a whole lot of reasons. But you don’t want to do something that’s criminal, and you can’t trade without your certificate. I know a certificate is your lifeblood.
00:08:37:13 – 00:09:01:14
Michael Bagraim: It’s the bottom line. It’s the business itself. So, I mean, I can’t trade as an attorney, for instance, or practice as an attorney without being registered with the authorities. And I don’t want to do anything illegal. And I’m sure no one else wants to do anything illegal. We’re trying to have a society that runs properly, and what are you really doing over here?
00:09:01:14 – 00:09:30:15
Michael Bagraim: So, the government is actually just trying to outlaw the industry. You want to just destroy it. It makes no sense. I can’t find anyone to tell me what the sense of this, the whole idea of this industry. And I was hoping that it would become easier for people to get into is that you would train people who are previously disadvantaged or black-colored Indian, train people to become entrepreneurs.
00:09:30:17 – 00:10:03:01
Michael Bagraim: It’s well known estate agents, entrepreneur, is a small entrepreneur. They don’t earn enormous money. Most of them, especially the smaller ones. But it means that they become their own boss, it means it’s creating employment, and it’s good for the whole industry. The whole property industry is good for that. So, I don’t know what the government’s thinking is other than what I said before is they somehow want to look like they’re doing something so that it’s good for votes.
00:10:03:01 – 00:10:23:22
Michael Bagraim: In other words, you’re telling everyone out there that we’re now going to take this industry and we’re going to create more jobs for black people. But that doesn’t make any sense at all because all you’re doing is you’re closing down the businesses. So, there is not even training if you can’t train someone, if you don’t exist, if the business isn’t there.
00:10:26:01 – 00:10:52:23
Alec Hogg: Doctor Anthea Jeffrey of the IRR has laid out very clearly that this is part of the— not this in particular, but that there is a national Democratic revolution master plan that is being followed, by the ANC, I guess. What—I’d love to get your insights on. And I know you can’t speak for the party, but you’re in a political party where you are allowed to have your own mind.
00:10:53:01 – 00:11:17:05
Alec Hogg: But it is the perception amongst society is the DA is hedging its bets. It’s hoping to get into government with the ANC. But if you listen to Doctor Jeffrey and you listen to other people and you see this kind of thing that the ANC government is putting forward, then why is the DA even considering going into this least, worst partnership?
00:11:17:05 – 00:11:50:07
Alec Hogg: Surely if you guys want to win this election, you should be saying we will never get into bed with these kinds of policies or a party that follows these kinds of policies. Just help us out here, Michael, because I can tell you that on the ground, people are losing. They are losing confidence in the DA. We are seeing the DA going down in the polls, and it seems to have been, from the day that this idea of, well, you know, the least worst option for South Africa would be us going into coalition with the ANC.
00:11:50:09 – 00:11:51:01
Alec Hogg: Help us here.
00:11:51:03 – 00:12:16:01
Michael Bagraim: Well, that’s very difficult for me because first of all, my belief is that’s not correct. It’s not true, and I know that there’s been a lot of babble and noise about that. I’m not, certainly personally not in favor of that at all. But the reality is that there are people talking about it. Now, I’m not in the policy structures within the DA.
00:12:16:01 – 00:12:36:08
Michael Bagraim: So, not only am I got no jurisdiction to tell you anything about it, but over and above all that, I actually don’t know what you’re talking about because I have been within the DA for ten years, and I have seen all the meetings. Right. And most meetings. I’m quite a stickler for that.
00:12:36:10 – 00:13:02:22
Michael Bagraim: And I’ve never heard anyone say we’re going to get into bed with the ANC. That’s not the DA’s policy at all. And in fact, all the policies that I know that the ANC is practicing, are anathema to the economy, and here’s one that is absolutely destructive, but I can just—I can keep you here for hours telling you about what I hate about the ANC and its policies.
00:13:03:00 – 00:13:28:08
Michael Bagraim: I think it’s communist-based. And, you know, maybe people say it’s the worst. It’s the second-worst option. We got to avoid going ANC, going into bed with as horrible people in the red, red turncoats. And I understand what people are saying, but that’s not where I’m coming from. Where I’m coming from is I believe in the DA’s policies.
00:13:28:10 – 00:13:54:07
Michael Bagraim: The Democratic Alliance is a liberal party. It wants to let business carry on with business and otherwise this government, and if at all, I’m hoping that and it looks like the ANC is still going to get the most votes in the election. I mean, let’s, let’s be practical about that. And I’m hoping that we’ll have some decent people to start thinking properly in the future.
00:13:54:07 – 00:14:24:18
Michael Bagraim: But I, I can’t see an alignment between the DA and the ANC, but who knows. They the leadership might, after the election, might have to do some serious thinking. Because that amalgamation of EFF/ANC is dreadful for me, I mean, I intend to live in this country. I intend to stay here. I’ve got grandchildren in this country, and I’m hoping we don’t throw it into the dustbin of history.
00:14:24:20 – 00:14:47:08
Michael Bagraim: Because I think that if ANC alignment will throw us into the dustbin of history, and if we can avoid it. Well, I’ll leave it to people cleverer than me to think that one through. And, maybe you’ve got better answers than I’ve got, but at the moment I can’t even contemplate that. And there was someone who said it’s too costly to contemplate.
00:14:47:08 – 00:15:13:21
Michael Bagraim: You might recall that that phrase. And for me, that’s costly. But what is more ghastly is that ANC is its partnership, which puts shivers up my spine because I’ve worked my whole life out—I’ve got my own little house. I wouldn’t like anyone to take that away. And I quite frankly, I’m at the moment I’m feeling very uneasy as to where we go in politics.
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00:15:14:00 – 00:15:42:08
Alec Hogg: So many, as many as so many South Africans. But we have a constitution and the concern, I guess, that you should be seeing in the DA is that the voters are saying, well, the DA is not really an alternative to the ANC because they are hedging their bets and they might get into bed with them, whereas previously you were seen as an alternative, you know, Herman Mashaba said, I will never get into coalition with the ANC.
00:15:42:10 – 00:16:14:12
Alec Hogg: The DA is saying, well, you know, we might save the country by doing it. Perhaps, perhaps the Constitution will save the country, not some kind of a coalition with the ANC. But anyway, you say it, it’s not. You’re not in the policy committee. I would just love to know whether this is something that’s even being considered. Because if you’re going down in the polls at the rate that the DA is going down, whereas you should have been full of self-confidence, you should have been going into an election where you said, these guys on the other side of hopeless and we see what they’re doing.
00:16:14:13 – 00:16:28:03
Alec Hogg: They’re shooting themselves in the foot again. Now, whether state agents, there’s any estate agent who votes with the ANC, they’re going to be nuts. After this latest attempt, you would think that you’re the guys who should be having the momentum, but the polls are telling us it’s the opposite.
00:16:28:09 – 00:16:48:03
Michael Bagraim: Well, I don’t think it’s fair and I don’t think it’s right. And people need to have a look. And the real answer is not Mashaba, not any of the smaller parties. The real answer is to vote for a party that actually is an alternative. And we’ve proved that we are the alternative. I mean, look what’s going on in the Western Province.
00:16:48:05 – 00:17:16:15
Michael Bagraim: I mean, we’re down 20%, it’s actually less, it’s 19% unemployment. In other words, our policies are actually working. In terms of where you can never say never, in terms of where the DA’s going in the future, I’m not—I haven’t got a crystal ball. But I can categorically tell you, I’ve sat in meetings for the last ten years on a daily basis with the DA, and no one has ever said, “we’re getting into bed with the ANC.”
00:17:16:17 – 00:17:46:04
Michael Bagraim: That’s never been said to me. Whether someone said it in a smoke-filled room somewhere and it came out, I don’t know who said that. I certainly have never heard John, who’s the leader, say that he’s never, ever come forward and said that he wants to get into bed with the ANC, even in the worst-case scenario situations. But he happens to be my leader and I have faith in him and where I’m sitting right now.
00:17:46:06 – 00:18:02:13
Michael Bagraim: I think I’m horrified to hear what you’re saying, that people believe we’re going to get into bed with ANC. I’m absolutely horrified to hear that. That makes me shout out and say, no, that’s not the case. Well.
00:18:02:15 – 00:18:19:07
Alec Hogg: Maybe it’s time for the DA to actually come out and do that and shout out and say, “we will never get into bed with these guys, even if they’re going to try and destroy the country because it’s this, this like anyway, it is. That’s the view. That’s the feeling on the street.”
00:18:19:09 – 00:18:43:07
Alec Hogg: And, and you look forward to, to even consider that the DA might have lost the Western Cape and its majority in the Western Cape would seem totally irrational. But it’s a very, very real issue now, given this belief amongst voters that, “well, they’re going to go into they want to govern, so they’re going to go into partnership with the ANC, even heaven help us.”
00:18:43:09 – 00:19:04:00
Alec Hogg: If that were to become a reality after the election, for most, for the majority of voters. And they are they’re telling us this, you can see it in the polls, Michael. But I’m sure there are people some way in some organization within the official opposition who’s saying, “hang on, guys, how come we’re losing momentum? How come the polls are showing that we’re falling?”
00:19:04:02 – 00:19:30:17
Alec Hogg: Is this acceptable? Perhaps not getting back to the purpose of this conversation is the idea of the estate agents having to have a fidelity certificate based on racial grounds, constitute usually sound. I’ll say to you earlier, maybe you don’t need to save our country by going into a coalition with the ANC. Because you got the Constitution.
00:19:30:17 – 00:19:43:04
Alec Hogg: I might be I might be smoking my socks on that one, but it’s the the, is this thing with the estate agents. Can somebody challenge it in the Constitutional Court and win?
00:19:43:06 – 00:20:06:21
Michael Bagraim: Yes. And in fact, they will challenge it if the ANC is actually going to go ahead with this, I think, quite frankly, this might just be a lot of smoke and mirrors with the ANC itself because they, they dispute their figures are falling fast, very fast, and they’re desperate to try and do something to try and lift up their people to vote for them.
00:20:06:23 – 00:20:28:15
Michael Bagraim: and sending this message out, I think it’s a false message to the black populace of South Africa to say, “look what we’re doing here. We’re trying this. They’re doing it with actors as well, by the way. I don’t know if you’ve seen them, they’re doing the same thing with the actors in South Africa, the people have to act in movies and voiceovers and that sort of thing.”
00:20:28:17 – 00:20:50:18
Michael Bagraim: They’re saying exactly the same thing, that you have to give a B certificate and they’re going to make it just as bad for them. So they’re clutching at every single straw they can find and saying, “this is what we’re doing for the black people of South Africa.” And in fact, they’re doing nothing. So the Constitution, I must tell you, one thing I’m very proud of is the South African Constitution.
00:20:50:18 – 00:21:23:06
Michael Bagraim: It’s a great constitution. It works. And if only people would least respect it because this is showing disrespect to the Constitution. This is what this is all going back to apartheid. This is social engineering. Let’s call a spade a spade. It is social engineering. The Nazis practiced that, after all. And we’ve seen it all over again. And one would have thought that we’d learn from apartheid that you don’t start fiddling with race, color, creed, sex.
00:21:23:08 – 00:21:41:19
Michael Bagraim: I mean, the ANC has just done that over here by putting out this idea to say, “no, no, no, we going to now interfere in this industry, okay?” They’ll destroy the industry. That’s not too bad in their minds, but what is good in their minds is that this is sending a message to say to the likely, “we’re going to find you more jobs.”
00:21:41:19 – 00:22:09:01
Michael Bagraim: Where are they going to find the jobs and the businesses closed? So yes, people will challenge it. It will be if anything, the DA will challenge the Democratic Alliance. It’s got a long and good history of actually approaching the courts when we have things that are anti the Constitution. This is unconstitutional and this is the worst case of sort of changing the playing field.
00:22:09:01 – 00:22:32:21
Michael Bagraim: And it’s really bad. I mean, what we do know is that there’s a very strong thought within the ANC and especially within the EFF as well, that they want to scrap the Constitution that’s, you know, and you’ve got to be very careful because let’s say the ANC gets a 45% and the EFF gets 15%, we then very close to numbers to be able to scrap the Constitution as well.
00:22:32:23 – 00:22:55:07
Michael Bagraim: So and that’s happens to be the rock bearer of my faith in South Africa is the Constitution. and you’re quite right. You’re saying that we have we got the defense of the Constitution. But imagine if people get the numbers to actually go and destroy that. Then we just got to anarchy in South Africa. So we can’t afford that either and let’s the Constitution.
00:22:55:09 – 00:23:23:11
Alec Hogg: So maybe that comes back to the argument that many people are saying that just make sure that your multi-party coalition gets at least 34%, and don’t leave any doubt in anybody’s minds that you want to go into government with, those who propagate the national, well, the, the, these kind of ideas, as we’ve just seen today, Michael Bagraim is the shadow minister for labor in the Democratic Alliance.
00:23:23:11 – 00:23:25:10
Alec Hogg: And I’m Alec Hogg from BizNews.com
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