Democratic Alliance vs The Star

Complainant: Democratic Alliance

Lodged by: Gavin Davis

Article:  Reserve Bank ‘does endorse DA economic plans’

Author of article: Shanti Aboobaker and Vukani Mde

Date: 19 May 2014

Respondent: The Star

COMPLAINT

The DA is complaining about a story in The Star (and syndicated across the Independent Group titles), headlined Reserve Bank ‘does endorse DA economic plans’, and published on 22 April 2014.

The DA complains that the story inaccurately stated that:

· the party were running a radio advertisement that the SA Reserve Bank had “endorsed” its economic plan and had “agreed” with it; and

· party leader Helen Zille said at a rally in Kroonstad that the Reserve Bank had “modelled” its economic policy.

THE TEXT

The story, written by Shanti Aboobaker and Vukani Mde, said that the DA was “continuing to claim that the SA Reserve Bank has endorsed the party’s economic politics, despite both the bank and Finance Minister Pravin Gordhan rejecting the claims several months ago” – even though DA leaders were careful to attribute the endorsement of their manifesto to “a Reserve Bank consultant”. The journalists claimed that the DA’s radio adverts “repeat[ed]the claims”. They also reported that Zille said at a rally outside Kroonstad that this consultant “did an economic model of the DA’s policies and stated it would lead to 8 percent growth and 6 million real, sustainable jobs”. Gordhan reportedly said that the Bank had not endorsed the consultant’s “working paper”.

ANALYSIS

Radio advert

The relevant text from the radio advert read: “It’s clear that our country needs jobs. More jobs means less crime and a better life for everyone. The DA will carry out a plan that the South African Reserve Bank says will create 6 million real, permanent jobs…” (It was aired on Metro FM, a national SABC station and commercial Gauteng station Kaya FM.)

The story said on this issue: “The advert, which was heard by The Star, claimed that the Reserve Bank ‘agrees’ that the DA’s economic plan would lead to an 8 percent growth rate and create ‘6 million real jobs’. These claims contradict the statements of the central bank following the DA’s manifesto launch that it did not model the party’s economic policy.”

The journalists also stated that the advert said the SARB “agreed” that the DA’s economic plan would lead to an 8% growth rate and the creation of 6 million jobs.

Davis complains that nowhere did the DA claim that the Bank either “endorsed” or “agreed” with its economic policy. He argues that the wording of the advert was “very different from saying that the SARB either endorses or agrees with our plan”.

He says that although the veracity of the advert is not at issue here, it is worth sketching some of the background to the claim made in the radio advert:

In 2013, the Reserve Bank published a Working Paper entitled “Achieving higher growth and employment: Policy options for South Africa”. The research considers various policy scenarios for South Africa, and ultimately concludes that…the South African economy can grow at 8% by 2025. The research suggests that in this growth scenario, our economy could add nearly 6 million jobs and reduce unemployment to 11%.

The policy interventions proposed in the Reserve Bank Working Paper all appear in the DA’s economic policy. There is also significant overlap between our diagnosis of the current constraints to growth and theirs. The DA’s economic policy therefore references the Working Paper when discussing how 8% growth can be achieved, and what the impact of 8% growth can be on the economy.

 

That is why we can claim in the advert that we will carry out a plan that the Reserve Bank says will create 6 million real, permanent jobs.

He concludes: “…we did not say in our radio ads…that the Reserve bank had endorsed or agreed with our policy. It is therefore inaccurate for The Star to say that we have.”

The Star disagrees:

It may be a matter for interpretation, but we believe that the script gave credence to the party’s well-publicised link between its economic policies and the Bank. 

The view that the DA created a link between its economic policies and the SARB is not a rumour. The party’s defence around this complaint is unexpected since even the Bank itself has said the party misused its name for electioneering purposes in its advertising (https://www.resbank.co.za/publications/detail-item-view/pages/publications.aspx?sarbweb=3b6aa07d-92ab-441f-b7bf-bb7dfb1bedb4&sarblist=21b5222e-7125-4e55-bb65-56fd3333371e&sarbitem=6098).

The party the apparently agreed in February to desist, with a spokesperson saying that both Zille and her party’s spokesman on finance, Tim Harris, had given “their personal guarantees that the party would stop saying the bank had endorsed the party’s policies in any formulation”.

Yet the DA continued to make the link in its campaigning, and we have taken note of its lawyers’ letter to the Bank saying it “would not stop” making statements linking its economic policy to the SARB.

We understand this was in response to the letter provided in the link above, in which the Bank demanded the party to “stop claiming its endorsement” for its economic policy platform, and accusing the DA of “political opportunism”.

Our view is that this was a strong rebuke of the party’s ads, the contention in which was supported in media statements made by Zille. For instance, she told TV station eNCA that “the Reserve Bank has modelled the DA’s policy and has concluded that indeed we can achieve 8 percent growth” (http://www.enca.co.za/south-africa/zille-hails-march-luthuli-house-success).

We published this information in a story in the Sunday Independent of May 4 in which we stated that this rebuke related to the DA’s use of a working paper authored by the Bank’s consultants David Faulkner, Christopher Loewald and Konstantin Makrelov, titled Achieving Higher Growth and Employment: Policy options for South Africa.

As we explained in this story, the consultants’ paper presented scenarios which could theoretically lead to higher growth and employment. The DA then claimed this “overlapped” with its policies which would equivocally lead to 8% economic growth and six million jobs.

We also reported that respected economists, including a senior economist at the Reserve Bank, had not agreed with the paper – and consequently the DA’s claims – saying 8% growth and six million jobs were patently out of reach. The DA, however, continued to disagree. 

We believe Davis’s complaint is thus open to interpretation, too.

Note that he himself is quoted as saying: “The Reserve Bank paper shows that 8 percent growth and 6 million jobs are possible with the right policy interventions.” This would strongly suggest the party continued to make the link which we have reflected.

Davis was further quoted as saying: “Given the overlap in the Reserve Bank paper’s proposed interventions with the DA’s policies, it follows that 8 percent growth and 6 million jobs would be achievable if the DA’s economic policy proposals were implemented. This is what we are conveying in our advertisement.”

Yet the DA continues to contend, even in this complaint to yourselves, that the party – and particularly Zille – have “never claimed that the Reserve Bank has endorsed DA policy”.

In its letter to the Bank, Minde, Schapiro and Smith, the party’s law firm, wrote: “The policy interventions relied on in the Working Paper are virtually identical to those contained in the DA’s economic policy. It was as a result of this Working Paper that the DA earlier claimed that the Bank endorsed its economic policy.”

The lawyers’ letter said the party had denied there was any legal basis to accuse it of “political opportunism” and “goes further, counter-accusing the bank and governor Gill Marcus”.

Further to that, it said: “If you intend to persist with attempts to prevent the public from hearing those true facts it is you, not the DA who will show ‘scant regard for the Constitution or the independence and integrity of the Bank’.”

Davis was then quoted as saying there was “nothing wrong with citing an independent source”, meaning the Working Paper authored by the consultants, as evidence for the DA’s election campaign claims on jobs and the economy.

But the Reserve Bank said at the beginning of May that the DA and Zille had demonstrated disregard of the independence and integrity of the Bank, again stating that it ‘refuted the claim by Ms Zille, that the SARB has modelled the DA’s economic plan and confirmed its eight per cent growth projections”.

Davis then said: “We don’t believe it is false advertising because it is true that a plan similar to the DA’s, published by the Reserve Bank and modelled by Reserve Bank consultants (one of whom is a Reserve Bank employee), found that it is possible to create six million jobs.”

The Reserve Bank released the following statement on 13 February this year:

“The South African Reserve Bank (the SARB) refutes the claim by Democratic Alliance (DA) leader Helen Zille, that the SARB has modelled the DA’s economic plan and confirmed its eight per cent growth projections.

“A discussion paper on the SARB’s website examines areas of policy reform, which if implemented, could contribute to achieving eight percent growth.  The paper makes no reference to the DA policies or its manifesto.

“The SARB’s Research department frequently posts such papers on its website. These are independent papers, which are peer reviewed and intended to foster thinking on various policy issues.

“The blatant misrepresentation of the facts and the misuse of the SARB’s name by Ms Zille, demonstrates a disregard of the independence and integrity of the SARB, which acts in the interest of all South Africans.”

In his response to Smith’s reply, Davis argues that this letter had been in reaction to the story in dispute. “If the Star had not made factually inaccurate statements in its article, then the SARB would not have complained to the DA. In other words, the article was the cause of the SARB’s complaint, not a consequence of it.

He concludes: “…the article erred by claiming that the DA was saying that the SARB endorsed and agreed with its policies in its radio adverts. This evoked a reaction from the SARB, thus tarnishing the reputation of the DA and undermining the goodwill that hitherto existed between the DA and the SARB.”

My considerations

The questions now confronting me are whether the story misrepresented the DA’s position and, if so, was it likely to have caused unnecessary harm.

But first, for clarity’s sake I need to elaborate on my last few words. If, for example, a story said that a (married) mayor had slept with a (consenting) female who was 36 years old while in fact she was 35, it would be a mistake – but that error would not of itself have caused anybody unnecessary harm of any kind. However, it would have been a completely different kettle of fish if the journalist reported that she was 15 while she was in fact 16. In both cases the newspaper got the woman’s age wrong by one year – but in the latter instance the mistake indicated statutory rape.

The same argument applies here: If the story incorrectly stated that the DA’s advert claimed the SARB had “endorsed” the party’s economic plan and/or that it had “agreed” to it, the second issue would be whether or not such a statement had caused the party any unnecessary harm.

The yardstick to establish the latter is the question of whether the statement was essentially correct – even though the detail may have been inaccurate

So then, the matter of accuracy: Clearly, Davis is correct in stating that the advert did not claim “endorsement” or “modelling” of any kind, as stated in the story – the text of the advert as cited above is there for anybody to read. I am convinced that the story was technically inaccurate.

But might this mistake have caused the DA any unnecessary harm? In other words, was the reporting essentially incorrect? (By asking this question, I am implying that I differ with Davis, who said the “veracity” of the advert was not in question.)

In another interview (on eNCA, as cited above) Zille said: “We know we can get six million jobs if we have a proper economic policy that can grow the economy at 8% per year. The Reserve Bank has modelled the DA’s policy and has concluded that indeed we can achieve 8% growth.” (my emphasis)

If Zille never uttered those words, I would have found the statement in the story to be essentially untrue – and an apology would have been appropriate. However, I have evidence that she did make that statement.

Even though the story inaccurately stated that the DA’s advert said the SARB had endorsed its policy, I therefore do not believe that this mistake may have caused it unnecessary harm of any kind.

Zille’s interview

Davis denies that Zille said anything about the Reserve Bank endorsing or agreeing with its policy during her speech in Kroonstad. “She said that a policy package almost identical to the DA’s was modelled by consultants to the SA Reserve bank and that this confirmed our contention that our policy package can achieve 8% growth and 6-million sustainable jobs over a decade.”

He concludes: “…we did not say in…Helen’s speech in Kroonstad that the Reserve bank had endorsed or agreed with our policy. It is therefore inaccurate for The Star to say that we have.”

The Star says the story did not suggest that Zille had made the Reserve Bank “endorsement” claim at this particular rally. “Instead, our story acknowledged that the party had backtracked from this. Yet its public advertising campaign had not.”

My considerations

The argument above applies here too. Again, I have no evidence that Zille said the Reserve Bank had “modelled” the DA’s policy (or had “endorsed” it, for that matter) at the rally near Kroonstad. The newspaper also did not provide me with any proof to this effect.

However, even if it was inaccurate to have stated that she made this statement near Kroonstad, Zille had made the very same assertion elsewhere. I therefore again do not believe that this mistake was material and that it would have caused her or her party any unnecessary harm.

General comment

Regardless of the above, I am worried that the journalists got the when and the where of Zille’s statement wrong on both occasions. This is a cause for concern, and should urgently be addressed by the powers that be at The Star.

Secondly, if I ask the newspaper to correct the inaccuracies, the message would still be that Zille was on record as saying that the SARB had modelled the DA’s policy – which is exactly what the party does not want.

FINDING

The complaint is dismissed.

APPEAL

Our Complaints Procedures lay down that within seven working days of receipt of this decision, either party may apply for leave to appeal to the Chairperson of the SA Press Adjudication Panel, Judge Bernard Ngoepe, fully setting out the grounds for appeal. He can be contacted at Khanyim@ombudsman.org.za.

Johan Retief

Press Ombudsman