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On Sunday, draft amendments to Administrative Adjudication of Road Traffic Offences Act (Aarto) regulations closed for public comment.

Signed into law in August by President Cyril Ramapphosa, the act could result in traffic law offenders losing their licences through the demerit system.

RELATED: ‘Aarto Amendment Act takes away right to be tried before an ordinary court’

The Justice Project South Africa warns that the act is a constitutional breach and it could be used by Sanral to enforce e-toll compliance.

Bongani Bingwa chats to the organisation’s chairperson Howard Dembovsky to give more insight on the matter.

Dembovsky says motorists should be cautious about this act.

The fundamental problem with the Aarto Act, is that at its foundation it presumes a person to be guilty and then it is up to you to prove yourself innocent. That is completely contrary to the provisions of Section 35,3 of the Constitution of the Republic of South Africa.

— Howard Dembovsky, Chairperson – Justice Project South Africa
The Aarto Amendment Act states that infringement notices and any other documents required to be served in terms of the act may be served electronically and that electronic service is broad in its definition, he explains.

The Aarto Amendment Act was signed into law on 13 August and the regulations were published for public comment on 11 October. Regulations are what makes the underlying act function.

— Howard Dembovsky, Chairperson – Justice Project South Africa
Dembovsky believes that these regulations were hurriedly put together as they contain many grammatical errors.

He says motorist can only defend themselves only in a tribunal.

This tribunal allows for motorists to make applications to it after they have had an unsuccessful written representation to a representation officer employed by the tribunal. If you are dissatisfied with the outcome of that tribunal, only then apply to a magistrate’s court for a review of the entire process.

— Howard Dembovsky, Chairperson – Justice Project South Africa
The regulations say a motorist cannot introduce new evidence when they go to the magistrate court.

The Aarto charge bill has not been repealed by the new draft regulations and subsequently, the charge for driving on a toll road without paying tolls is still there. Essentially Sanral can automate its process and send out infringement notices to people who drive under gantries and not pay tolls.

— Howard Dembovsky, Chairperson – Justice Project South Africa

Slowly but surely the process to amend the Constitution to allow expropriation without compensation is getting under way in Parliament. This is where the process currently stands.

Is it too late to object to amending Section 25?

For all practical purposes, yes.

The question on whether Section 25 of the Constitution should be amended, was answered last year when both Houses of Parliament adopted a resolution stating that the Constitution should be amended to allow expropriation without compensation.

This after the Joint Constitutional Review Committee make a recommendation to that effect after criss-crossing through the country and handling a vast amount of submissions from the public on the matter.

What Parliament is dealing with now, is drafting an amendment to the Constitution. This is the job of the committee with the unwieldy title of the Ad Hoc Committee to Initiate and Introduce Legislation Amending Section 25 of the Constitution, chaired by ANC MP Mathole Motshekga.

In theory, a motion could be brought to the National Assembly to change the ad hoc committee’s mandate or rescind the previous motion, but this seems unlikely.

So expropriation without compensation is a done deal?

Almost.

The biggest hurdle to the constitutional amendment is that it needs to be passed by a two thirds majority in the National Assembly.

This requires 267 votes. The parties who publicly stated that they oppose an amendment – the DA, IFP, FF Plus, ACDP and Cope – have 114 seats between them. Therefore, the ANC would need the 44 votes of the EFF to also vote for an amendment to pass the two-thirds threshold.

Now, the EFF supports expropriation without compensation, but their policy differs from that of the ANC in that the EFF wants the state to own all land.

So, in theory, there is a possibility that the EFF could decide not to support the amendment to the Constitution.

Does this mean that nationalisation is a possibility?

It is unlikely. The ANC has on several occasions made it clear that they do not support nationalisation.

Nationalisation would also possibly entail a different amendment to the Constitution than what the committee is currently busy with.

Furthermore, the presidential panel of experts on land reform and agriculture, said there was no provision for the nationalisation of land in current law and Constitution.

“Nationalisation is not on the cards in the current constitutional dispensation,” Bulelwa Mabasa, one of the panel’s members said when its report was released in July.

What will the amendment look like?

On Wednesday, Parliament’s legal services presented two options for the ad hoc committee to consider. Both involves changing the wording of Section 25 to allow expropriation without compensation, and providing for a law of general application to make this possible.

EFF chief whip Floyd Shivambu also presented an amendment, which was similar but also included a clause that would effectively nationalise land.

What happens next?

The ad hoc committee will deliberate on these options, and come up with a draft amendment bill by the end of November. This bill will then be open for a public participation process. The committee must consider this in finalising the bill, before it is presented to the National Assembly for adoption. The committee aims to finish its work before the end of March 2020.

The past few years have seen a number of important new laws and amendments introduced, which are having a drastic effect on selling and leasing of property, says Seeff Property Group.

Seeff said that the new Property Practitioner’s Act – which was recently signed into law, replacing the 43-year old Estate Agency Affairs Act – brings important reform to the property industry as a whole and introduces a number of much-needed changes.

It outlined some of the major changes below.

• Defining who is a property practitioner – The Act broadens the scope of legislation beyond traditional estate agents to cover commercial property brokers, bond originators, home inspectors, homeowners’ associations, companies selling timeshare and fractional title, property developers and property managers, who now all fall under the Act;

• Fidelity Fund Certificates – Anyone who earns a commission or brokerage from the sale or leasing of a property, needs a valid Fidelity Fund Certificate which must be produce on request from a seller or landlord. The Act tightens the regulations around Fidelity Fund Certificates beyond the current requirements to include possession of a valid tax clearance and a BEE certificate. It is also required that not just the agent/s, but the agency/business and all of its property practitioners must be fully compliant;

• Property defects – This is an important element that sellers and landlords need to be aware of. While it has for some time been best practice to include a comprehensive property defects disclosure document as part of a property transfer, it is now mandatory for all property sale and lease agreements. No mandate may be accepted from a seller or landlord without this document, which will then also form part of the sale and lease agreement;

• New Board of Authority – The current Estate Agencies Affairs Board will be replaced by a new governing body known as the Board of Authority. This new board will govern the property profession across the board, not just estate agents as is currently the case.

Rental Housing Amendment Act

Seeff also set out the key changes in the new Rental Housing Amendment Act, which makes amendments to the Rental Housing Act of 1999:

• Lease agreement in writing – All lease agreements must now be in writing and legally enforceable. The agreement and all provisions, duties and obligations must be explained to the tenant and clearly understood. All amendments to the lease must also be in writing;

• The property must be habitable – The landlord must ensure that the rental property is in a habitable state and that it is safe and suitable for living, properly maintained and has access to basic services such as water and electricity;

• Tenant may not be denied access basic services or to the property – Another important aspect is that the landlord may not cut off basic utilities such as electricity and water to non-paying tenants, only a local authority can do so. A landlord may also not change the locks or deny the tenant access to the property without a proper court order;

• Defects to be recorded – A joint inspection of the property must be done at the commencement of the lease to identify any defects including those that need to be repaired by the landlord. The defects list must be attached to the lease agreement. Upon expiry, another inspection must be done to determine whether any damage has been caused during the tenant’s occupancy;

• Deposit must be invested and refunded – According to the Act, the deposit must be deposited in an interest-bearing account. The landlord must issue a written receipt for all payments received from the tenant, including the deposit. The deposit together with interest accrued must be paid to the tenant within seven days of the expiration of the lease. Reasonable costs incurred to repair damage may be deducted from the deposit, but subject to proof of damage and the costs.Article by Businesstech

There are currently three proposals on how to amend Section 25 of the Constitution to allow expropriation of land without compensation – two from Parliament’s legal unit and one from the EFF.

The ad hoc committee tasked with amending Section 25 met on Wednesday for what committee chairperson Mathole Motshekga termed a “constitutional dialogue on land ownership”, chaired by former Constitutional Court judge and current inspecting judge of correctional services Johann van der Westhuizen.

Several stakeholders from the public sector had an opportunity to air their views.

Advocate Charmaine van der Merwe of Parliament’s legal services presented two options the unit had drafted on how Section 25 could be amended.

The first option she presented proposed amendments to subsections (2)(b) and (3) of Section 25 to read as follows:

(2)(b) subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court: Provided that a court may determine that no compensation is payable in the event of expropriation of land for the purposes of land reform…

(3) Where compensation is payable, the amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances.

These subsections currently read as follows:

(2) Property may be expropriated only in terms of a law of general application;

(a) for a public purpose or in the public interest; and subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court.

(3) The amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including:

(a) the current use of the property; (b) the history of the acquisition and use of the property; (c) the market value of the property; (d) the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and the purpose of the expropriation.

The second option involves the inclusion of a further subclause, which read:”(4A) Notwithstanding the requirement for compensation contemplated in subsections (2), (3) and (4), land may be expropriated without the payment of any compensation as a legitimate option for land reform in order to redress the results of past racial discrimination.”

In both cases, she also recommends that the following subclause be written into Section 25: “National legislation must set out the circumstances under which property may be expropriated without the payment of compensation.”

EFF chief whip Floyd Shivambu proposed the following amendment to Section 25:

“(1) The state, including Parliament, executive and judiciary carry an obligation to redress imbalances of the past through enactment of laws that will achieve redress and equitably redistribute all resources.

(2) Property may be expropriated without compensation (a) only in terms of a law of general application; (b) for a public purpose or in the public interest.

(3) The state should be custodian of all South Africa’s natural resources, inclusive of land, mineral resources and water, and relevant legislation should be passed to clearly define and contextualise state custodianship of natural resources.”

The committee will deliberate on these options next week. It is envisaged that a draft bill will be published by November 27. Thereafter it will go through the normal public participation process.

The committee expects to finish its work by March 31, 2020.

Last year, both houses of Parliament resolved that Section 25 should be amended to make explicit which is implicit in the Constitution to allow expropriation without compensation. This, on the recommendation of the joint constitutional review committee, which went on a vast public participation process.

The question before the ad hoc committee is therefore not whether the Constitution should be amended to allow expropriation without compensation, but to draft a bill that amends the section.

Article by News 24

The Financial Fiscal Commission has warned that government has no room for further tax hikes, and that further increases may actually end up hurting the economy.

Presenting to parliament’s standing committee on finance on Tuesday (5 November), the group said that South Africa is facing projected revenue shortfalls of R52.5 billion in 2019/20, R84 billion in 2020/21 and R114.7 billion in 2021/22.

“This warrants a sustained increase in required economic growth and employment to improve revenue collection for the government to meet its social-economic objectives,” it said.

“Scope for increasing government revenue by raising taxes is shrinking because more tax hikes are most likely to impact negatively on the economy’s performance and hence on revenue collection, as consumers are forced to economise on their purchases.”

The group added that significant gains from Personal Income Tax (PIT) are most likely to be constrained because of the limited buoyancy – meaning that the percentage change in GDP is now only exactly matched by the percentage change in tax revenue take.

“Therefore, additional increases in marginal tax rates of PIT could also have perverse incentives such as tax avoidance or evasion,” it said.

“If households feel the need to acquire public sector services privately (e.g. health & education), the increasing tax burden may become untenable.”

Increases coming

This aligns with Treasury’s revenue concerns which it outlined in its medium-term budget policy statement released at the end of October.

“Significant tax increases over the past several years leave only moderate scope to boost tax revenue at this time,” the Treasury said.

However, despite this limited scope, Treasury said that additional tax measures are under consideration to raise an extra R10 billion in fiscal 2021 – but did not provide any further details.

“Given the fiscal position we find ourselves in, all tax options need to be on the table,” said Chris Axelson, chief director for economic tax analysis in the Treasury.

Chief economist of the Efficient Group Dawie Roodt said these additional measures will most likely to take the form of an increase in personal income tax and possibly even a hike in VAT – depending on how serious the finance minister believes the current crisis is.

Article by BusinessTech

Parliament, Sunday, 3 November 2019 – Among the broad range of matters on the parliamentary agenda this week, the second round of Public Hearings on the National Health Insurance (NHI) Bill by the Portfolio Committee on Health kick-started in the Northern Cape in Kimberly on Friday, 1 November. Emthanjeni Municipality in De Aar was visited yesterday (Saturday, 2 November) whilst today the Committee is at Upington and will continue to Springbok on Monday, 4 November. Mpumalanga Province’s leg was concluded last week whilst Limpopo is scheduled for the next visit by the Committee. The objective of the Bill is to achieve universal access to quality health care services in South Africa as per section 27 of the Constitution; to establish a National Health Insurance Fund as well as to set out its powers, functions and governance structures.

Meanwhile, National Assembly (NA) Speaker Ms Thandi Modise’s participation at the G20 Speakers’ Summit, questions to the Deputy President and the Economics Cluster, the consideration of the Budgetary Review and Recommendation Reports (BRRR), a mini-plenary session on Agenda 63, as well as NA and National Council of Provinces (NCOP) committee meetings are scheduled this week.

Ms Modise will represent Parliament at the sixth G20 Speakers’ Summit this week from 3 to 5 November 2019. The summit, taking place in Tokyo, Japan, aims to strengthen the role of legislatures in global affairs. The Inter-Parliamentary Union (IPU) – the largest and oldest global parliamentary platform – and the House of Councillors of the National Diet (Parliament) of Japan are hosting the summit.

Ms Modise also participated in the 2018 Speakers’ Summit held in Buenos Aires, Argentina, ahead of the 2018 G20 Leaders’ Summit. The G20 is made up of 19 countries and the European Union. The 19 countries are Argentina, Australia, Brazil, Canada, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Republic of Korea, South Africa, Russia, Saudi Arabia, Turkey, the United Kingdom and the United States of America.

On Thursday, 7 November 2019, Deputy President David Mabuza will be in the NCOP for oral replies to questions posed by its members. Putting questions to the Deputy President is one of the many ways in which Parliament holds the executive accountable. Section 92(2) of the Constitution stipulates that Members of the Cabinet account collectively and individually to Parliament for the exercise of the powers and performance of their functions.

The Economics Cluster 4C comprising the Ministries of Communications, Transport, and Public Works and Infrastructure will also respond to questions in the NCOP on Tuesday, 5 November 2019.

In all, the NA will hold three plenaries this week including a mini-plenary session. Amongst the key items on the agenda is consideration of the Budgetary Review and Recommendation Reports (BRRR) of various government departments. The BRRR provides an assessment of the departments’ service delivery performance, given available resources; an assessment of the effectiveness and efficiency of the departments’ use and allocation of available resources; and may include recommendations on the forward use of resources.

NA committees are required in terms of Section 5 of the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No. 9 of 2009) to annually assess the performance of each national department and to thereafter submit a Budgetary Review and Recommendation Report (BRRR).

The mini-plenary debate is scheduled to take place in the National Assembly on Thursday, 7 November 2019 under the theme “Advancing the African Union Agenda 2063 within the context of the twin pillars of economic development and security”. The NA Rules 49 (1) makes provision for the Speaker of the National Assembly to refer matters for consideration in a mini-plenary session, after due deliberation of views and directions of the Programme Committee. A mini-plenary session may proceed with its business irrespective of the number of members present.

Amongst parliamentary committee meetings scheduled for this week again are those of Joint Standing Committees, which will hold their meetings as follows:
Joint Standing Committee on the Financial Management of Parliament will on Wednesday (6 November 2019) receive three briefings on Parliament’s performance in the 2018/2019 financial year. The first briefing will be from the committee’s content and research team, followed by the Auditor-General of South Africa on Parliament’s 2018/2019 audit outcomes, and lastly by the Acting Secretary to Parliament.
Joint Standing Committee on Defence: the Chief Logistics on procurement will appear before the committee and give a briefing on the challenges faced by the Department of Defence on Thursday, 7 November 2019.

PUBLIC HEARINGS THIS WEEK:

Portfolio Committee on Health is currently holding its second round of public hearings on the National Health Insurance (NHI) Bill in the Northern Cape (1 to 4 November 2019).
Select Committee on Security and Justice will hold provincial public hearings on the Traditional Courts Bill on Tuesday, 5 November 2019.
Standing Committee on Finance and Select Committee on Finance will hold public hearings on the 2019 revised Fiscal Framework and

THERE ARE 34 COMMITTEE MEETINGS SCHEDULED THIS WEEK:

TUESDAY, 5 NOVEMBER 2019 
Portfolio Committee on Agriculture, Land Reform and Rural Development: Briefing by the Department of Agriculture, Land Reform and Rural Development on drought update and Provinces’ state of readiness for the 2019/20 planting season.
Portfolio Committee on Home Affairs: Briefing by the Department of Home Affairs (DHA) and the State Information Technology Agency (SITA) on resolving the network downtime at the DHA offices; Briefing by the Department of Home Affairs (DHA) and the State Information Technology Agency (SITA) on the procurement process of the Automated Biometric Information System (ABIS); Briefing by the Department of Home Affairs on the litigation case management system and categorizing of the cases.
Portfolio Committee on Public Service and Administration: Interviews for filling the vacancy of Commissioner for the Public Service Commission; Deliberations and adoption of the recommended candidate to be selected to serve as a Commissioner for the PSC.
Portfolio Committee on Women, Youth and Persons with Disabilities, (National Assembly), [Briefing by the National Youth Development Agency on the annual report for 2018/19.
Portfolio Committee on Environment, Forestry and Fisheries: [Briefing by the Department of Environment, Forestry and Fisheries on the readiness for UNFCCC Climate Change COP25 conference in Chile.
Portfolio Committee on Human Settlements, Water and Sanitation: Interrogation and discussion emanating from the presentation made by the Department of Cooperative Governance and Traditional Affairs (COGTA); South African Local Government Association (SALGA) and National Treasury on debt owed for water provision.
Portfolio Committee on Justice and Correctional Services: Briefing on the Judicial Matters Amendment Bill and Customary Marriages Amendment Bill.
Portfolio Committee on Trade and Industry: Briefing by the B-BBEE Commission on its 2018/19 Annual Report and 2019/20 second-quarter report on financial and non-financial performance; Briefing by the NLC Commission on its 2018/19 Annual Report and 2019/20 second-quarter report on financial and non-financial performance.
Portfolio Committee on Higher Education, Science and Technology: Briefing by the Department of Higher Education and Training (DHET), Umalusi and the State Information Technology Agency (SITA) on progress report in eradicating the certification backlog in the Technical and Vocational Education and Training (TVET) colleges.
Select Committee on Health and Social Services: Briefing by the Department of Health on the Annual Report 2018/2019.
Select Committee on Cooperative Governance and Traditional Affairs, Water and Sanitation and Human Settlements: Workshop on Section 139 Interventions in the Municipalities and general observations.
Portfolio Committee on Communications: Briefing by the South African Post Office on: (i) impairment of its investment; (ii) governance and operational challenges; and (iii) an action plan to respond to AGSA material uncertainty as a going concern which has been reported in audit report for the past 5 financial years; Adoption of minutes.
Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour: Consideration of the Economic Partnership Agreement (EPA) between the South African Customs Union (SACU) and Mozambique (together SACUM) and the United Kingdom; Briefing by Department of Tourism on its 2018/19 annual report.
Joint Meeting: Standing Committee on Finance, Standing Committee on Appropriations, Select Committee on Finance and Select Committee on Appropriations: Briefing by the Financial and Fiscal Commission (FFC) and the Parliamentary Budget Office (PBO) on 2019 Medium Term Budget Policy Statement (MTBPS); Consideration of draft advertisement for position of Director of the PBO.

WEDNESDAY, 6 NOVEMBER 2019 
Portfolio Committee on Higher Education, Science and Technology: Colloquium on funding of the post-school education and training sector.
Portfolio Committee on Public Works and Infrastructure: Briefing by the DPWI EPWP branch on: the manner in which it coordinates the programme across the national, provincial and municipal levels of government; the manner in which the directorate ensures uniformity of beneficiary selection, the standardisation of data verification; the formulae through which job opportunities are translated into actual jobs; the skills development and certification of EPWP beneficiaries; whether and how, in the next phase of the EPW programme, these aspects are going to be improved; Consideration and adoption of minutes; Consideration and adoption of the 2019/20 First Quarter Report
Portfolio Committee on Public Service and Administration: Briefing by the PSC on the extent and nature of contract appointments in national and provincial departments; Briefing by the Department of Public Service and Administration, Government Communication and Information System and Department of Cooperative Governance and Traditional Affairs on the location and funding model of the third generation of the Thusong Service Centres; Briefing by the Department Public Service Administration on the revised Ministerial Handbook; Adoption of the report of the recommended candidate for Commissioner post for the Public Service Commission Board; Consideration and adoption of the previous Committee minutes.
Portfolio Committee on Justice and Correctional Services: Briefing on the International Crimes Bill
Select Committee on Public Enterprises and Communication: Briefing by Alexkor on progress made regarding the court review of the Deed of Settlement (DoS) for payments to be made to beneficiaries and the establishment of the CPA to complete the implementation of the DoS.
Portfolio Committee on Defence and Military Veterans: Briefing by the Department of Defence (DOD), Armscor and the South African Defence Industry on the status and challenges in the Defence Industry in South Africa.
Select Committee on Education and Technology, Sports, Arts and Culture: Briefing by the Department of Sports and Recreation on its 2018/19 Annual Report.
Portfolio Committee on Communications: Meeting of the Subcommittee on ICASA Council vacancies
Portfolio Committee on Social Development: Briefing by the South African Social Security Agency (SASSA) and National Development Agency (NDA) on its action plan to respond to the Auditor General’s audit findings for 2018/19 annual report and BRRR; Briefing by the Department of Social Development on its first quarterly financial and non- financial performance report for 2019/20 financial year (April – June 2019)
Select Committee on Security and Justice: Parliamentary Legal Advisor’s response on Department of Home Affairs proposed amendment to the Border Management Authority Bill [B9B-2016]; Parliamentary Legal Advisor’s response to written submissions on Independent Police Investigative Directorate Amendment Bill [B 25 – 2018] (National Assembly – sec 75); Briefing by the Department of Justice and Constitutional Development on the written responses to the Child Justice Amendment Bill [B 32b – 2018] (National Assembly – Sec 75); Briefing by the Department of Justice and Constitutional Development on the Promotion of Access to Information Amendment Bill.

FRIDAY, 8 NOVEMBER 2019 
Joint Meeting: Standing Committee on Finance and Select Committee on Finance:Response by National Treasury to the public submissions on the 2019 Revised Framework], Committee Room M514, Fifth Floor, Marks Building, 09:00-12:00
Portfolio Committee on Human Settlements, Water and Sanitation: Briefing by the Department of Performance, Monitoring and Evaluation on the delivery performance of the Department of Water and Sanitation and its entities for the 2018/19 financial year; Overview by the Auditor-General South Africa on the audit outcomes (financial and non- financial) performance of the Department of Water and Sanitation for the 2018/19 financial year.

ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES

Some years back when the US was fretting about high Government debt, a survey was conducted among citizens to understand how they would prefer to address the problem. By far the majority said they’d prefer a large one-off levy rather than the drip torture of higher taxes over many years.

That shouldn’t be a surprise. Most of us have learned to first tackle the least enjoyable item on our To-Do list. Similarly, when restructuring an underperforming businesses, savvy managers know it’s best to take the biggest hits up front. After clearing the decks they get on to build a better future.

After paying close attention to yesterday’s MTBPS, I got the feeling that finance minister Tito Mboweni might be lining us up for similar treatment in February next year. Circumstances are so dire, he pointed out, that big and tough decisions need to be taken. So he urged us to start talking about them.

With the double whammy of a R53bn revenue shortfall and R23bn in overspending, higher taxes are a certainty in February’s Budget Speech. Nobody likes paying more tax. But if we have to, it’s best to get it over with soonest. Collectives have long used large one-off levies when needing to bring the finances into order. It’s a principle which should also works with countries

Article by BizNews

South Africans should brace themselves for higher taxes next year as the impact of state capture, corruption, and mismanagement are starting to bite.

The National Treasury delivered its 2019 medium-term budget policy statement today, revealing that revenue collection fell far short of estimates.

Compared with the 2019 Budget estimates, total revenue shortfall for 2019/20 will amount to R52.5 billion.

This reflects a poor employment outlook, with job losses, lower wage settlements and smaller bonuses, reducing personal income tax collection.

There was also reduced profitability in a difficult trading environment, resulting in lower-than-expected corporate income tax collections.

Financial pressure on consumers resulted in weak household consumption which means domestic VAT collection was not as high as expected.

Tax increases planned

The Treasury said significant tax increases over the past several years leave only moderate scope to boost tax revenue.

However, given the size of the revenue shortfall, additional tax measures are under consideration for next year.

Chris Axelson, chief director for economic tax analysis in the Treasury, said that given the fiscal position South Africa finds itself in, all tax options need to be on the table.

“The 2019 Budget included R10 billion in tax increases for 2020/21. The tax policy measures to raise this amount will be announced in the 2020 Budget,” the Treasury said.

Taxpayers already overburdened

While the government wants to collect more money through higher taxes, the inverse may happen instead.

Efficient Group founder and chief economist Dawie Roodt said South African taxpayers are already overburdened.

This means that even when the government increases taxes further, they will not increase tax collection much.

It will also further frighten the existing taxpayers in the country, who are already faced with the highest taxes in history.

The consequences of ever-increasing taxes and mismanagement from the government include a potential tax revolt and skilled individuals and companies leaving the country.

The fact that South Africans are tired of paying for corruption and mismanagement at state-owned enterprises (Eskom, SAA, and the SABC), municipalities, and state departments only aggravates the situation.

Article by My Broadband

Trade Union Solidarity has released a new report on the incoming National Health Insurance (NHI) and its impact on the healthcare industry.

Nicolien Welthagen, a research psychologist at the Solidarity Research Institute, said that the report is based on questionnaires sent to healthcare practitioners in the private as well as the public sector across the country.

The general feedback shows that healthcare practitioners have huge concerns about the proposed NHI.

“The findings indicate that there is distrust towards the government regarding the way they want to implement and manage the NHI. 80% of respondents are negative or sceptical about the NHI,” said Welthagen.

“According to the results of this report, the respondents do not believe that the NHI will succeed in improving the healthcare system and service delivery.

“Only 15% of respondents believe that it would be possible to successfully implement the NHI, and 84.5% are of the view that the implementation of the NHI could destabilise the healthcare system in South Africa and could harm the high-quality service already being provided by the private sector,” she said.

Welthagen added that the report further highlights the enormous risk that the emigration of health practitioners poses to the future of healthcare in South Africa.

“There are serious concerns about a shortage of healthcare workers, the more so in view of the fact that 20.8% of the respondents indicated that they had already taken steps to emigrate, and a further 41.06% would consider emigrating when the NHI is implemented,” Welthagen said.

Emigration

In an August interview, Dr Chris Archer, CEO of the South African Private Practitioners Forum, said that his members are extremely concerned and that the bill may drive emigration as “those who want to leave see it as a reason to do so”.

Profmed medical aid CEO Craig Comrie said that health professionals are already emigrating.

Comrie said Profmed’s members are mainly health professionals, of whom 17% leave each year. This rose to 30% in June and July.

Alex van den Heever, Wits School of Governance professor, added that he expects medical professionals to emigrate in their hundreds, joining their countrymen in countries like Dubai and Australia.

Doctor shortage

South Africa is also currently facing a doctor and nurse shortage due to a lack of funding, says health minister Dr Zweli Mkhize.

Responding in a recent parliamentary Q&A session, Mkhize said that the primary reason for this shortage is that the public health sector budget has not increased in real terms for the past 10 years.

This has impacted the number of staff that can be appointed, he said.

Mkhize added that the demand for health services in the country is increasing while there is no additional funding to address the change, which results primarily from immigration into the country and the increasing burden of disease.

“The shortage of health professionals is a global phenomenon and is more pronounced in low and middle-income countries as health workers are more likely to migrate to upper-middle-income countries in search of better living and working conditions,” he said.

Article by Business Tech

Proposed national health insurance will not improve efficiency and reduce costs, but will be a magnet for fraud and corruption

Universal health coverage is an important goal, which SA can attain with the right policies. However, the proposed national health insurance (NHI) will do far more harm than good (NHI will help create a more equal, productive society, October 24).

NHI proponents (in the presidency’s policy unit and NHI “war room”) assert, without evidence, that the NHI will end queues, improve efficiency, reduce costs, promote innovation and contribute to economic growth and socioeconomic stability”.

The reverse is true. Waiting times will double, as they have in (wealthy) Canada under its broadly similar “single-payer” system. Emigration will reduce the number of health professionals, increasing the burden on those that remain.

Costs will rise sharply, if only to pay for the huge bureaucracy needed to administer NHI controls over fees, prices, medicines, treatment protocols and medical technologies. Centralised top-down planning will stifle innovation and erode efficiency. Stock-outs and already defective maintenance will worsen as suppliers wait for payment from the NHI, the only permitted purchaser countrywide.

The NHI fund’s enormous revenue (about R450bn a year at the start) will be a magnet for fraud and corruption. Major additional taxes will also have to be imposed on a small and already overburdened tax base, ostensibly to fund the NHI. But without legislation ring-fencing this additional revenue for NHI purposes (the Treasury is averse to ring-fencing), the extra monies will soon be diverted to public service wages or more bailouts for state-owned enterprises.

Reduced choice, diminished quality, long waiting times and increased taxes will give the skilled middle class yet more reason to emigrate, curtailing economic growth, making it harder to sustain the social wage, and adding to destitution and despair.

Section 27 of the constitution does indeed require the state to “take measures” to expand access to health care. But it says these must be “reasonable” and match “available resources”. The NHI fails both these crucial constitutional tests.

Dr Anthea Jeffery
Institute of Race Relations