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Other resolutions taken by the party include:

cracking down on tax avoidance: recent reports show that only 3 million people out of SA’s 56 million paid 97% of personal income tax in 2019
transforming the structure of manufacturing with a renewed emphasis on localisation
easing SA’s visa requirements
eradicating youth unemployment
boosting consumer demand and lowering the costs of doing business (including data costs)
curbing climate change by promoting sustainable, smart agriculture and alternative technologies
ensuring greater coordination between our various justice and law enforcement bodies, as well as modernising systems in these bodies
increasing social cohesion
He said it was conceded at the lekgotla that some communities under the party’s control have experienced basic infrastructure failures.

Regarding land expropriation, Magashule said the lekgotla endorsed the amendment of section 25 of the constitution, and committed to an “intensive program to popularise and explain its position on the amendment of section 25 of the constitution”.

He added that among the key issues surrounding this would be the development of black farmers, as well as the question of urban land.

READ MORE: SAA should be retained as a national airline – Magashule

Magashule said the ANC wanted to “de-racialise our towns and cities and transform apartheid-era spacial patterns”, which would include the “expropriation of well located urban land and targeting of derelict buildings”.

“We won’t allow hijacking of buildings in our cities and towns,” he said.

Magashule also noted that SA would function as AU chair this year.

“SA will once again assume the important role as the AU chair under the theme of silencing the guns to create conducive environment for development. SA must also use its non-permanent seat at the UN Security Council to transform the international body,” he said.

Magashule said the lekgotla came at a “pivotal moment for our country due to the economic difficulties we are faced with, as many people continue to endure great hardship”.

He said the ANC had agreed that the most important issues of concern to the nation include the economy, jobs, SOEs and building a “capable state”.

He said that his party was attempting to fight the triple challenge of unemployment, inequality and poverty.

(Compiled by Daniel Friedman)

“The ratings downgrade reflects Moody’s assessment that ongoing fiscal challenges suggest that the South African government will be more selective in dispersing financial support to state-owned enterprises, including to Land Bank,” said Moody’s in a statement. The agency also revised Land Bank’s outlook to negative for the same reason. The agency said it assumes a high likelihood of government support for Land Bank, given that it’s a state-owned bank.

Moody’s flagged the pending downgrade of the Bank in November, saying that its assets quality, rise in non-performing loans and its capital adequacy levels presented a cocktail of challenges, making its profile riskier than the general global banking sector.

Land Bank recorded a 3.6% increase in its non-performing loans – loans that are in default or where clients have not made payments in time and are at risk of defaulting – to 17.9% in the 2019 financial year. But Moody’s was more concerned about the increase in stage 3 or impaired loans, which grew to 8.8% from 6.7% in 2018. The Bank said slow economic growth and droughts contributed to some farmers struggling to repay the Bank while its R662m exposure to Tongaat Hulett exacerbated losses.

On Tuesday, Moody’s said the increased credit risks elevated Land Bank’s solvency pressures. In the 2019 financial year, the Bank reported a capital adequacy ratio of 16.4%, slightly above the 15% mandated by bank’s solvency laws and Moody’s remarked that this only provided “a modest” cushion. Moody’s also flagged corporate governance concerns as a factor that worked against Land Bank.

“While the rating agency acknowledges initiatives taken by Land Bank to strengthen governance in light of generally heightened attention to South African state-owned enterprises, the prolonged period of uncertainty in relation to appointing a permanent CEO who will ensure sustained oversight of the bank’s operations and strategic direction is a cause for concern. For Land Bank, corporate governance remains a key credit consideration,” said Moody’s in a statement.

The Bank has not been with a permanent CEO since December 2018, when Tshokolo Nchocho moved to the IDC, and Konehali Gugushe, who had been acting since May 2019 resigned earlier this month.

Article by News 24

“As usual the budget allocation always aims to strike a balance amongst competing national spending priorities.

“It is in this context that Minister Mboweni invites South Africans to share their views about economic conditions and other issues they would like government to highlight in the Budget on 26 February 2020,” Treasury said.

The minister would particularly like views on what government can do to achieve faster, and more equitable economic growth.

This is separate to an economic paper issued by Treasury last year. The paper included proposals to bolster growth by 3 percentage points per year and to create up to a million jobs.

Over 700 comments were received. It is still under deliberation and is not yet government policy.

Mboweni took to Twitter earlier this month to express frustration with the pace of economic reform in the country, Fin24 previously reported.

“What are critical Economic Strategic Reforms? Read the National Treasury now Government Document! Let us move Forward! Many Steps at the same Time!! Movement!! No time for procrastinating!!,” he tweeted.

South Africans can, in the meantime, share their tips with Treasury via Twitter – at @TreasuryRSA with the hashtag #TipsForMinFin and #Budget2019. Or they can drop their tips at the National Treasury website, under the tab labelled “Tips” on the home page.

The minister this week will lead a delegation at the World Economic Forum meeting in Davos, Switzerland. Each year the meeting sees government officials and business leaders from across the world to discuss economic-related issues. This year’s theme focuses on sustainable development.

The WEF meeting follows the UK-Africa Investment Summit in London, held on Monday, which Mboweni attended along with International Relations and Cooperation Minister Naledi Pandor. This summit seeks to strengthen investment partnerships between the UK and African countries.

Compiled by Lameez Omarjee

Since expropriation without compensation (EWC), regained prominence in government rhetoric, there has been much public concern over the potential implications of nil compensation. There are many calls for concerned citizens to submit their comments to oppose the bill and save South Africa from a Zimbabwe-esque future. Esteemed economist and entrepreneur, Dr Lawrence McCrystal, has already submitted his eight reasons for opposing the amendment. But I propose that we shouldn’t be too hasty to oppose this bill, because it might actually open the door to the very thing we need.

First, let’s look at what the bill entails:

1. The aim of the bill is to allow for land and any improvements thereon to be expropriated for purposes of land reform with nil compensation payable. Some responses to the bill have cautioned that it will allow the government to seize your car, bank account and any other property, but the wording of the amendment clearly indicates that EWC is restricted to land, and improvements thereon (such as buildings). It is also restricted to expropriation for land reform purposes only and will not allow the government to seize your property willy-nilly.

2. The preamble highlights the rationale for the amendment in four “whereas” statements:

a. To accelerate land reform to address the injustices of the past, especially considering that “hunger for land among the dispossessed is palpable and the dispossessed are of the view that very little is being done to redress the skewed land ownership pattern” – I will return to this statement later;

b. To make explicit what is already implicit, ie: that nil compensation is a legitimate option for land reform;

c. To address historic wrongs – this is equivalent to addressing the injustices of the past, the first “whereas” statement, and adds nothing to the bill; and

d. To ensure equitable access to land and empower the majority of South Africans to be productive agricultural citizens.

3. The actual amendments are in two parts:

a. An addition to Section 25(2)(b) to allow a court to determine nil compensation for the expropriation of land and any improvements thereon for the purposes of land reform; and

b. The addition of subsection 3A as follows: “National legislation must … set out specific circumstances where a court may determine that the amount of compensation is nil.”

Second, let’s look at some of McCrystal’s objections. His first is that amending the Constitution is unnecessary as existing legislation is already adequate. I agreed with this statement in my June 2018 Daily Maverick article, wherein I referred to the call for EWC as premature. A year-and-a-half later, my position has not changed (by much). It is already implicit in the Constitution (Sections 25(2)-(4)) that nil compensation could be paid for property expropriated in the public interest if it is just and equitable for such to occur. To my knowledge, this has never been tested in court. But note that currently, property is not limited to land, and the purposes of expropriation are not limited to land reform. The amendment bill will impose these limitations on the Constitution. This could be a good thing for property security.

McCrystal goes on to show that people don’t want land – unemployment is a far more pressing concern, as reported by the Institute for Race Relations in 2017. Yet, Chris Williams-Wynn, surveyor-general of the Eastern Cape, notes that in the 2005 Land Summit meetings held throughout South Africa, there was an overwhelming indication that people want to own land. In an article also published in 2017, he reports the results of his own fieldwork investigating the question of what people want. His findings agree with the Land Summit findings: People want land rights. This accords with the first “whereas” in the preamble to the bill: The “palpable hunger” for land among the dispossessed. But, if this is the case, why do the majority of land restitution beneficiaries opt for financial compensation instead of land? It appears that the matter is not as clear-cut as the preamble makes out.

The preamble also suggests that EWC will serve to accelerate the land reform process, but it has already been pointed out by myself among others (including McCrystal and the High Level Panel Report on the Assessment of Key Legislation and the Acceleration of Fundamental Change), that the Constitution is not the main impediment to land reform. It is ineptitude, mismanagement, maladministration, greed and corruption that are at the heart of the slow pace and, in some cases, failure of land reform. This ties in with another of McCrystal’s objections: Amending the Constitution to allow for EWC may create another avenue for exploitation by immoral politicians.

Thus, while the intent of the bill might be good – who can argue that there is still a need to address spatial inequality and the lingering injustices of the past? – the immorality that permeates South African society and is exemplified in many of our leaders could see these good intentions ending up as paving on the road to their own infamy.

In conclusion, I am in two minds about this bill. Firstly, I see it as a good thing because it imposes limitations on the existing expropriation clause in the Constitution. Currently, any of your property (not just land), may be expropriated in the public interest (not limited to land reform), and you may be compensated in a manner that is just and equitable. This doesn’t mean that compensation must be at market value, or even that you have to like the compensation amount. It means that a court will have to decide what “just and equitable” means for your particular case and there is nothing in the Constitution at the moment to stop the court from saying that you get nothing. The bill makes it explicit that EWC may only apply to land and buildings expropriated for the purposes of land reform. Your car and other property would hence be safe.

My main objection to the bill is the assumptions in the preamble that people want land and that this amendment will speed up the land reform process. Both of those assumptions are untested and possibly invalid.

My final concern, which I haven’t raised yet, relates to the addition of subsection 3A: the “specific circumstances” under which a court may determine that nil compensation is valid. This is really where the rubber hits the road and this is where public comment will be crucially important. It is these “specific circumstances”, that will either instil confidence in our government and our property rights, or lead to the kind of economic meltdown that the naysayers are predicting. Yet we are being asked to comment on the bill without seeing any literature pertaining to these “specific circumstances”. Are we to approve the amendment bill in good faith that government will follow it up with “specific circumstances”, that are just and equitable? Experience shows that “good faith” and “government” should not appear in the same sentence. Why are we not being asked to comment on the bill and the “specific circumstances”, simultaneously?

Hence, I’m not convinced that I can support the bill in its current form. There are just too many key questions that remain unanswered. But I will support it eventually, once my concerns about the rationale and the “specific circumstances”, have been laid to rest. And I think you should too. DM

Copyright Amendment Bill: President Ramaphosa has two weeks to avert R34bn US trade catastrophe

Two weeks from today, the Office of the United States Trade Representative will hold public hearings in Washington D.C. on South Africa’s eligibility for the Generalised System of Preferences (GSP) under the US Trade Act.

South Africa’s eligibility for the GSP programme has been called into question as a result of the passing of the Copyright Amendment Bill in Parliament last year. If South Africa loses its GSP eligibility, we will potentially lose up to R34bn in export revenue.

The Copyright Coalition of South Africa is calling on President Cyril Ramaphosa to act now before it is too late. Instead of signing the Copyright Amendment Bill into law, he still has the option of sending the Bill back to Parliament for reconsideration.

We urge the President to do so before the public hearings on 30 January 2020. Our country cannot afford the diplomatic stress, loss of export revenue, and the thousands of jobs that these South African exports create.

Our current GSP designation allows South Africa preferential duty-free access to US markets for selected export products. Should the upcoming review find that the Copyright Amendment Bill does not adequately protect US intellectual property, South Africa will lose its GSP designation.

In 2018 alone, the value of South African goods exported to the US under the GSP programme amount to as much as R34bn by some estimates. Under the GSP programme and the African Growth and Opportunity Act (AGOA), sub-Saharan African countries are granted duty-free access to the U.S. market for more than 6,000 products. These include: meat, fruit, vegetables, precious metals, chemicals, iron and steel products, and a range of manufactured goods.

It is critical that President Ramaphosa take action now on the Copyright Amendment Bill to avert catastrophic economic loss. With the World Bank having already revised South Africa’s 2020 economic growth forecast downward from 1.5% to 0.9%, the country cannot afford this unnecessary risk.

The Copyright Amendment Bill has been on President Ramaphosa’s desk for ten months, awaiting assent. The President has a constitutional obligation not to sign the Bill into law, and to send the Bill back to Parliament.

There are both substantive and procedural reasons why the Copyright Bill is unconstitutional:

The Copyright Amendment Bill is unconstitutional as it violates the right to property, arbitrarily depriving content creators (artists, writers, musicians etc) of their intellectual property rights.

As the result of inadequate public consultation, flawed parliamentary processes, and the failure to conduct a socio-economic impact assessment, the Bill is irretrievably procedurally deficient.

In light of these significant constitutional deficiencies, the reasons for the President’s indecision are difficult to fathom. The time to debate them has run out.

By referring the flawed Bill back to Parliament, the President can demonstrate a commitment to the Constitution, the rule of law, and the success of South Africa’s creative and cultural industries.

Moreover, by referring the Bill back to Parliament, the President will assure South Africa’s investors and trade partners of our commitment to abide by our international law obligations.

We as the Copyright Coalition of South Africa, representing a broad consensus within the creative and cultural sector, therefore reiterate our urgent call for President Ramaphosa to refer the Copyright Amendment Bill back to Parliament immediately. Any further delay by the President is courting disaster.

But the new rules will give you a break on only the first, R1 million you earn abroad. Thereafter you can be taxed according to South Africa’s own income tax system.

Tax consultant Nicolas Botha talks to Refilwe Moloto about the impending changes that may see the exemption falling away.

South African ex-pats were able to claim Section 10 102 exemption – that’s the 183 60-day rule.

Nicolas Botha, Senior Financial Emigration Specialist -Tax Consulting SA

In the past that has allowed you to fully exempt your income he explains.

What’s happened now is that that has been amended to only allow for exemption of the first million rand. The surplus after the one million rand thereafter will then be taxable according to South Africa’s normal tax brackets which places a lot of ex-pats in a predicament.

Nicolas Botha, Senior Financial Emigration Specialist -Tax Consulting SA

Why is this change being implemented?

Botha says Treasury cross-referenced SA ex-pats and immigration statistics and compared it with tax compliance returns.

What Treasury noticed was there was a vast difference between the two…so it was almost a bit of a scare tactic to wake up South Africans and get compliant.

Nicolas Botha, Senior Financial Emigration Specialist -Tax Consulting SA

Make sure you are tax compliant, he advises, adding South Africans who are living overseas permanently would not be affected by double taxation.