Blog - Page 4 of 30 - Dear South Africa

1st August 20201st August 2020

Why we should be concerned about the R20 billion additional funding to municipalities

Municipalities are to get R20 billion in additional funding to ride them through the Covid-19 crisis, but given their track record of irregular spending, residents and rates payers have a right to be concerned that this money will be properly spent.

The cause for concern comes from the Auditor-General’s (AG) 2019 Municipal Report which suggests 60% of revenue reflected on the books of municipalities will never be paid. Even before the Covid-19 crisis, there was an alarming pattern of individuals and businesses showing signs of a diminishing ability to pay for services, or simply refusing to pay.

This has devastated revenue in many municipalities, reducing their ability to meet service delivery expectations. The Department of Cooperative Governance is about to launch a National Responsible Citizenry Campaign across all 257 municipalities in the hopes of restoring a culture of payment.

But such a campaign sinks or swims on the economic fortunes of households and businesses. We know from the July 2020 TransUnion Consumer Financial Hardship Study that 80% of those surveyed reported a negative impact from the Covid-19 crisis. Shockingly, 17% of “impacted consumers” reported losing their jobs compared to 10% in the previous survey.

South Africans are in dire financial straits. This does not augur well for any campaign to restore a culture of payment in municipalities. The culture of non-payment was already well entrenched before Covid-19, but will have severely deepened In the last three months of the lockdown.

Quite in addition to this, the AG report points to a shocking culture of financial mismanagement and corruption in municipalities. Only 8% of the 257 municipalities received clean audits in the 2017-8 financial year, and half of them had financial statements deemed “quality”. Irregular expenditure totalled R32 billion and the likely financial loss from material irregularities came to R24 billion.

South Africans need to be especially vigilant when an additional R20 billion is being directed to already dysfunctional municipalities.

The Parliamentary Monitoring Group (PMG) reports the growing concerns of opposition parties relating to how this R20 billion will be distributed and what mechanisms will be put in place to monitor this spending.

There are valid concerns that municipalities will become semi-permanent wards of National Treasury, which means taxpayers will ultimately be responsible for their financial survival. The municipal funding models are shattered and an entirely new model will have to be found over the longer term.

Rate payers are becoming more active and engaged in local governance, and this is likely to be the most powerful force for establishing a culture of accountability and service delivery at local government level, says DearSA programme director, Rob Hutchinson.

“Municipal governance has been allowed to sink to these appalling levels because there was no proper oversight. This is changing, but it needs to happen far quicker. We cannot end up with a completely broken local government sector that relies more and more on bailouts from central government. We will be keeping a close eye on this R20 billion in additional funding for municipalities to see that it is not squandered through theft, corruption and maladministration.”

One of the areas of efficiency being explored by the DCoG is improved supply chain management – for example, “pool financing” for municipalities that have identified projects on municipal boundaries such as the Lanseria Airport project which lies on the border of the City of Johannesburg and the City of Tshwane.

Municipalities will be able to apply for licences to distribute electricity as a way of raising additional revenue. Programmes are being conceived by Treasury and SA Local Government Association (SALGA) to improve the local government fiscal framework. Municipalities will be required to report weekly to National Treasury for money allocated through the Covid-19 relief scheme.

The DCoG will introduce an Intergovernmental Monitoring, Support and Intervention Bill to provide further oversight of municipal fiscal management and spending.

The AG will continue to audit these entities and now has more robust powers to bring municipal thieves to book.

But we are still not satisfied that this will solve the problems mentioned above. For this reason, DearSA is redoubling its efforts to bring accountability to the local government sector by running various participative democracy campaigns at municipal level.

If there is one thing that terrifies errant municipal officers, it is the voice of the public. DearSA is providing that voice.

29th July 202029th July 2020

More than R1 billion spent on commissions of inquiry for such meagre dividends

More than R1 billion. That’s the cost of various commissions of inquiry in recent years, most of them investigating corruption.

The granddaddy of them all is the Zondo Commission of Inquiry into state capture, which has been allocated an additional R130 million to complete its work by March 2021. This is on top of the roughly R700 million spent so far on the inquiry since its formation in early 2018.

Total cost of Zondo Commission: R830 million.

Number of corrupt officials in jail: 0.

To be fair, Zondo has not completed its work and arrests will surely follow. In June this year, Deputy Chief Justice Raymond Zondo asked the Hawks to account for the lack of progress made in recovering the R2.4 billion paid by Passenger Rail Agency of SA (Prasa) to Swifambo Rail easing for locomotives that could not be used because they were too tall for the rail tracks.

Zondo has summoned the Hawks to account for the lack of progress on this, and other, cases.

South Africans are rightly outraged at the regular outpouring of corrupt tales from Zondo and other commissions of inquiry, and the fact that few have been held to account.

Moneyweb reports there were eight arrests related to the looting at VBS Bank, and four executives from Tubular Construction and Eskom were arrested late last year in relation to claims of corruption around contracts awarded for the building of the Kusile Power Station.

That’s about it. A dozen arrests, but no convictions as yet. And a few people lost their jobs.

Is this a decent return on investment on the roughly R1 billion spent on commissions of inquiry over the last few years? Let’s take a look.

Why the cost of Zondo has escalated

We have only a rough idea how the Zondo Commission budget was spent, thanks to answers provided by the ruling party in September last year to questions posed by the DA. Some R244.5 million was spent in the year the commission was set up (2018/19) and R111 million the following year. The big-ticket costs were legal fees (R53 million), investigative tools (R35 million), investigators (R86 million) and “other goods and services” (R95 million).

We don’t have more recent figures, which have obviously ballooned over the last financial year.

In July 2019, President Cyril Ramaphosa set up a special tribunal under the Special Investigations Unit (SIU) to recover an estimated R14.7 billion in looted funds.

Let’s take a look at some of the other commissions of inquiry and assess their overall benefit to the country.

Marikana Inquiry cost R153 million

2012 was a low point for the SA Police Services, when 34 mineworkers were shot and 78 wounded during a violent strike at Lonmin’s Marikana platinum mine in North West province. A Commission of Inquiry was set up in 2012 and sat through till 2015. It was chaired by retired Judge Ian Farlam, and in 2015 issued its findings, which included recommendations of a further inquiry into the fitness of senior police officials to hold office, and referred the killings and assaults to the Director of Public Prosecutions for further investigation.

The cost of the inquiry was R153 million. Police say they acted in self-defence, but issued no apology to the families of the slain miners. There has, however, been a noticeable change in police behaviour in handling violent protests as a result of the Marikana massacre.

Seriti Commission into arms deal cost R130 million

Open Secrets reports that the Seriti Commission in Inquiry into the arms deal, which ran for four years, cost taxpayers more than R130 million. It is reckoned that the arms deal cost South Africa R65 billion, and Judge Willie Seriti, who chaired the inquiry, was accused by more than 40 civil society organisations of conducting a whitewash of corrupt dealmaking by senior political figures in collaboration with international arms companies. Corruption Watch and Open Secrets accused Seriti of failing in his duty to act impartially, failing to hold accountable those accused of corruption and ignoring key evidence. In August 2019 the North Gauteng High Court set aside the findings of the Seriti Commission for its “manifest failure” to hold those responsible for the arms deal to account.

PIC Inquiry cost R54.5 million

The Commission of Inquiry into the PIC was set up in 2019 to investigate any impropriety surrounding investment decisions made by the Public Investment Corporation (PIC). The cost of the commission came to R54.5 million – small change compared to Zondo. The PIC manages more than R2 trillion in funds, predominantly on behalf of public sector workers.

The Commission found multiple irregularities relating to loans and share swaps made to the Sekunjalo Group, and recommended a forensic review of all process involved in transactions with Sekunjalo. Further irregularities were found in the PIC’s R1 billion investment in a Mozambican pal oil plant called S&S Refinery, and a R9.4 billion equity and loan funding transaction to Steinhoff International Holdings. A reading of the final report shows numerous violations of internal policies and irregular funding to business deals, some of them clearly “deals for pals.” The PIC was also heavily invested in the VBS Bank, which was found to have looted municipalities around the country.

As a result of the Inquiry into the PIC, there were some positive outcomes. Dan Matjila resigned as CEO of the PIC in November 2018 while fighting claims of impropriety which are now under an internal investigation. Executive head of listed investments, Fidelis Madavo, and assistant portfolio manager Victor Seanie, were fired over the last year. This followed an internal investigation into a R4.3 billion investment by the PIC into AYO Technology Solutions. Daily Maverick reports that in April 2018, PIC’s executive head of risk management, Paul Magula‚ was fired after being found guilty of poor performance, while executive head for legal counsel‚ governance and compliance, Ernest Nesane‚ resigned.

Nugent Commission of Inquiry cost R8.8 million

Retired Judge Robert Nugent chaired the Commission of Inquiry into tax administration and governance at the SA Revenue Service, at a total cost of R8.8 million. Nugent rounded on former tax commissioner Tom Moyane who had seized control of Sars and “dismantled the elements of governance one by one.”

The findings are scathing, and point to a pattern of governance failures and weakening revenue collection under his watch. President Ramaphosa fired Moyane in 2018 as a result of the Nugent findings.

A 2014 benchmarking exercise by the International Monetary Fund found that Sars was world class in 15 of 27 categories, and only one rung below good international practice in one of the remaining 12 categories. It was a place of higher calling for many skilled professionals eager to build a new democratic SA, says Nugent’s report.

But by March 2018 it was a shadow of the organisation lauded by the IMF. It reeked of intrigue, fear, suspicion and mistrust. Moyane installed CCTV cameras to surveille his staff, some of whom covered the lenses for fear of ending up in disciplinary hearing for a misdemeanor.

The modernisation programme that had been a decade in the making, replacing the largely paper-based system that preceded it with state-of-the-art computer systems, was summarily stopped when Moyane took over the helm, “with not so much as a word to the person who had been instrumental in creating it.” US-based consulting firm Bain & Co had a destructive hand in dismantling working installations without consulting staff. Bain subsequently repaid R217 million to Sars.

Mokgoro Board of Inquiry into National Prosecuting officials cost R3.6 million

The Mokgoro Board of Inquiry into the fitness of advocates Nomgcobo Jiba and Lawrence Mrwebi to occupy the top positions in the National Prosecuting Authority cost the country R3.6 million. Jiba was accused of being politically captured by former President Jacob Zuma.

The bottom line

Overall, we think this is a rather poor dividend on the more than R1 billion spent over recent years on various commissions of inquiry.

28th July 202028th July 2020

Amendment to law allows the state to prosecute for sexual offences more than 20 years after the fact

Proposed amendments to the law will make it possible to prosecute sex offenders decades after the offences were committed – unlike the existing Criminal Procedures Act which allows for a 20 year window in which to bring prosecutions.

Click here to have your say on the amendment bill

DearSA requested expert legal opinion on the proposed amendments from attorneys Hurter Spies.” This is a crucial amendment to our criminal legal framework, and we wanted to ensure that the voices of victims are properly heard at the highest levels of government,” says DearSA programme director Rob Hutchinson. “Parliament should be commended for its work in bringing our criminal laws into conformity with the Constitution and our legal opinion reflects that position.”

In keeping with its mandate to ensure broad public participation in all matters governance-related, DearSA requested an expert legal opinion to ensure that ordinary South Africans have a say in the shaping of these legal amendments. The Criminal Procedure Amendment Bill, 2018, was introduced in Parliament on 30 May 2018 as a result of the Constitutional Court judgment delivered in the now infamous “Frankel Eight” case.

However, the Department of Justice and Constitutional Development briefed the Portfolio Committee of Justice and Correctional Services on the proposed amendment without asking interested parties to comment. DearSA believes these amendments are of broad public interest and are therefore deserving of public comment.

The proposed amendments will also broaden the net of sex victims to include not just children, but adults. This follows a Constitutional Court ruling in 2018 that required Parliament to amend a number of laws to conform with the Constitution.

The genesis of these amendments goes back to the infamous case of Sidney Frankel, the billionaire former stockbroker, who died in 2017 before having a chance to face eight accusers who claimed they had been sexually assaulted and raped as children.

The so-called Frankel Eight came forward in 2013 with startling allegations against the former stockbroker. They alleged they had been sexually assaulted by Frankel between 1970 and 1989 when they were aged between 6 and 15 years old and had suffered physical, emotional, and psychological trauma thereafter.

Frankel passed away in April 2017 shortly before getting his day in court, but he would in any event be able to claim that the 20 year ”prescription” since the time of the sexual abuse had lapsed. In other words, the victims had waited too long to bring their claims of criminal sexual assault.

The Director of Public Prosecutions for Gauteng refused to bring a prosecution against Frankel on the grounds that the Criminal Procedures Act debars prosecution for sex crimes more than 20 years after the fact.

Not satisfied with this outcome, the Frankel Eight in 2017 brought a case before the Johannesburg High Court to have the 20 year prescription (time period allowed for the launching of legal proceedings) outlined in the Criminal Procedure Act (CPA) of 1977 declared unconstitutional.

The legal case was a success, the court ruling that section 18 of the Criminal Procedure Act was unconstitutional in barring victims of sexual abuse from launching legal proceedings after a period of 20 years had elapsed from the time the offence was committed.

The finding was appealed by the estate of Sidney Frankel, and eventually found its way to the Constitutional Court for confirmation of the Joburg High Court’s ruling. The Joburg High Court also ruled that not only was the 20 year prescription unconstitutional, but also the law fact that relevant sections of the CPA applied only to children.

The Constitutional Court agreed with the Joburg High Court and gave Parliament 24 months to amend the section 18 of the CPA so that it conforms with the Constitution.

In January 2019, Parliament decided to draft amendments to section 18 of the Criminal Procedure Act, 1977, and section 12 of the Prescription Act, 1969.

The amendment to the CPA extends the list of sexual offences for which prescription does not apply. In other words, there will be no longer be a 20 year expiration date for bringing legal action, and the range of sex offences will be broadened considerably.

Amendments to the Prescription Act will make it possible for victims of sexual offences o institute legal proceedings even where they have deemed to have suffered ‘‘mental or intellectual disability, disorder or incapacity’’, rather than “insanity” as in the current wording of the Act.

The range of sexual offences for which prosecutions may be instituted include rape, compelled rape (where someone is compelled to witness a sex act) or using a child or person who is mentally disabled for pornographic purposes.

Perpetrators of sexual offences may now be subject to both criminal and civil proceedings on a wider range of offences, irrespective of when the crimes took place.

The purpose of these amendments is to encourage survivors of sexual offences to reports these matters so that perpetrators are not left to roam free.

“We are also cognisant of the fact that our criminal justice system still has to undergo more substantive reforms in order to systemically address any secondary victimization experienced by survivors in the criminal justice system,” says Daniel Eloff, attorney with Hurter Spies. “We believe the proposed amendments will undoubtedly pass constitutional muster as it is a direct response to a declaration of unconstitutionality by the Constitutional Court.”

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22nd July 202022nd July 2020

Student financial aid rife with corruption and maladministration

The Department of Higher Education and Training is calling for nominations for the National Student Financial Aid Scheme (NSFAS). The nominations must be submitted by the first week of August 2020.

Perhaps its time the public paid more attention to what is happening with student aid, and to get strong public and taxpayer representation on NSFAS.

The NSFAS has an annual budget in excess of R30 billion and employs about 400 people.

“There is no question that free or subsidised higher education is a great equaliser. It allows students from poor families to reach the highest levels of academia and then leverage that education in the job market,” says DearSA’s Rob Hutchinson.

“Given the huge annual budget under NSFAS control and the reports of maladministration that have dogged it in the past, we need to pay close attention to who gets appointed to the board and so represent the public and taxpayer interest.”

We should also be wary of any governmental scheme giving away free money, as experience has shown that this is a bottomless pit for crooks.

A rather shocking piece of news reported in March this year is irregular expenditure in NSFAS amounted to R7.5 billion in 2017 and 2018 due to maladministration.

Jaw-dropping figures like this seem to be rather routine in NSFAS.

NSFAS administrator Dr Randall Carolissen attributed this to irregular records in the system, resulting in wrong payments to the wrong students at the wrong time. It is estimated that up to R2 billion of these funds were irrecoverable.

Who can forget the luckiest student alive, Sibongile Mani of Walter Sisulu University, who in 2017 received R14 million instead of R1,400 from NSFAS by mistake and blew more than R800,000 of this before being caught out.

In 2018 the Hawks arrested six staffers at Unisa, including the payroll administrator, for creating ghost students to defraud the SA Agency for Science and Technology (SAAST), under the administration of the National Research Foundation of South Africa. The amounts involved in this case totalled R1.7 million.

There’s also potential for those in charge of bursary funds to favour family and friends. Also in 2018 it was reported that then North West Premier Supra Mahumapelo’s son had received a R1.1 million bursary from Denel to study at an elite aviation school in Port Alfred.

Public Enterprises Minister Pravin Gordhan instructed Denel to launch an internal investigation into the matter, and also called for a criminal investigation into possible abuse of public money.

The Parliamentary Monitoring Group (PMG) last week reported that the Department of Higher Education and Training had been instructed by Treasury to reduce its budget by 20%, amounting to R19.5 billion, though only half of this had so far been deducted from its budget. NSFAS is reported to be expecting a drop in the collection of recoveries due to the impact of Covid-19 on the economy. An amount of R4.9 million will be reprioritised for Covid-19 impacts. NSFAS has objected to the suspension and reallocation of funds for students.

The NSFAS is a statutory body established to allocate funds for loans and bursaries for higher education students. Those who qualify for loans are required to pay them back once they graduate and start working.

The NSFAS board as a whole must be representative of the higher education system, with knowledge of higher education and “its role in meeting the reconstruction and development needs” of the country. The board should also have financial expertise and experience.

If you have any nominations you would like to suggest (perhaps even yourself) send your CV and a letter of consent indicating the nominee’s availability to serve on the board If appointed to mampane.g@dhet.gov.za.

21st July 2020

Carbon Tax: Dangers and opportunities

And what it means for companies.

Zelda Burchell – MoneyWeb

Many South African companies face unprecedented dangers amid the coronavirus crisis, with the economic impact of the lockdown on an already contracting economy.

In these circumstances it is vital for any company to plan their tax affairs carefully.

Hence the focus by Cova Advisory on new Carbon Tax details, which have only recently been published by the Treasury.

Understanding them is challenging, not least because there is not yet total clarity on all aspects of the regulations and how to claim each and every allowance.

However, failing to examine, to assess and then to act will mean that company executives are neglecting an opportunity to make savings – especially on a tax some corporates are resistant to pay in the first place.

A concern with the Carbon Tax is the way in which information and legislation has dribbled out, in a frustratingly unpredictable way after the tax has been implemented. It is vital that all the rules around the carbon tax are clear so that companies can plan to reduce their carbon footprint and thereby reduce their carbon tax liability. The fundamental purpose of the tax is to change behaviour, and by implication, a business will want to pay as little as possible.

We attempted to tackle this in a recent webinar, which looked at some of the allowances under the Carbon Tax Act, and the ways to reduce your carbon tax liability. Some of the main messages are summarised below.

For anyone who is not familiar with the structure of the Carbon Tax Act, the tax is levied on the direct emissions of a company over a calendar year.

The act was signed into law on May 23, 2019, and became effective on June 1, 2019. The design of the tax includes a number of tax-free allowances, which effectively reduce the amounts which need to be paid over to the fiscus.

Regulations have been published for these tax-free allowances. Most recently, the regulations for trade-exposed sectors were published. In addition, we now have the regulation for the allowance if a company is able to emit lower emissions than others in their sector.

We almost have a complete picture, but one more part of the Carbon Tax that is crucial for claiming the allowances is yet to be launched – and that is the carbon offsets administration system and its associated guidelines.

So, what is new?

We now have a better idea of what it means for a company to be considered as trade-exposed, and how it must go about claiming the allowance.

Companies that are trade-exposed are those which face competition from products that are imported or exported. Companies that manufacture products locally and are subject to the Carbon Tax may become less competitive if the same products are being imported and are not subject to a Carbon Tax. For this reason, the National Treasury included a tax-free allowance of up to 10% for these companies.

There is a sector-based approach, where the trade intensity index of each industry sectors is defined, and the allowances are allocated using a sliding-scale approach. However, there are provisions for companies which operate in more than one sector.

The approach seems logical, but there are still some uncertainties that exist with the determination of company-specific trade-exposure allowances, relating to the type of import, export and production data to be used. In addition, there isn’t clarity on auditing requirements.

Further calculation and analysis will also be needed by a company when it comes to claiming an allowance under the Performance Benchmark Regulations.

The regulations include a set of greenhouse gas intensity benchmarks for certain sectors, and the better a company performs against these benchmarks in containing its emissions, the higher the allowance – which is capped at 5%.

However, it isn’t always clear how these benchmarks are calculated as the methodologies will need to be requested, the measurement and verification requirements of the regulations are not defined, and some sectors have been left out.

In addition to all of this, there are further areas to explore in reducing your Carbon Tax burden.

There is a Renewable Energy Premium credit which will reduce the Carbon Tax for entities which generate electricity from green technology, such as wind and solar. Details of the rates for each renewable energy type have now been published and will be updated annually.

Finally, companies must consider the carbon offset allowance for firms that have undertaken a carbon-offset project – that is a project which results in emission reductions and which has been registered under an accredited standard.

The administrative rules on this are incomplete – as we still await a carbon offset administration system to create a South African based registry for carbon credits. It is the system that will be used to transfer carbon credits from an international registry into South African Carbon Credits which can then be used as a carbon offset allowance to reduce your Carbon Tax liability.

To conclude, then, companies need to ensure that as a starting point to manage their Carbon Tax liability, they need to quantify their gross tax liability and then fully understand which allowances are worth pursuing.

There are still some gaps and uncertainties in the Carbon Tax legislation – but one thing which is certain is that it can make financial sense to invest time and effort to get the most out of the trade exposure, performance benchmark and carbon offset allowances.

Zelda Burchell is manager at Cova Advisory.

21st July 202021st July 2020

We can’t pay R5bn sin taxes, says alcohol industry

By CAIPHUS KGOSANA and GRAEME HOSKEN – TimesLive

As the war over the ban on booze sales heats up, the alcohol industry has asked the government to suspend R5bn in sin-tax obligations until it is allowed to trade again.

In a separate development, a scientist on the ministerial advisory committee (MAC) — which advises the minister of health, Zweli Mkhize, on Covid-19 issues — criticised the science used to justify reimposing the sales ban.

And professor Charles Parry, a director at the Medical Research Council (MRC), said he was surprised by the outright ban because the council had recommended only tighter restrictions on sales.

The National Liquor Traders Council, the South African Liquor Brandowners Association, the Beer Association of SA and Vinpro — a non-profit company representing 2,500 wine producers, cellars and industry stakeholders — have written to finance minister Tito Mboweni and the South African Revenue Service (Sars) saying the renewed ban on alcohol sales had left them no choice but to apply for deferment of duties payable for July and August. The organisations represent such companies as South African Breweries, Distell and Diageo.

Liquor industry spokesperson Sibani Mngadi said alcohol excise tax was imposed at the point of production, meaning the industry was liable for excise duties worth R2.5bn in July and another R2.5bn in August on products that are in warehouses and cannot be sold.

“The industry and its entire value chain are facing an enormous financial crisis, and its capacity to make these payments is severely constrained. The sustainability of the sector, now and in the post-Covid era, is dependent on this deferment if job losses are to be avoided,” Mngadi said.

President Cyril Ramaphosa announced the immediate reinstatement of the ban on alcohol sales last Sunday, citing a sharp increase in trauma unit admissions since the ban was lifted on June 1. This had put extra pressure on facilities that were struggling to cope with the coronavirus pandemic.

The government is already facing a cash crunch due to plunging tax revenues caused by the struggling economy. Tabling his supplementary budget last month, Mboweni said SA would miss its original revenue target by more than R300bn this year.

Mboweni’s spokesperson, Mashudu Masutha, had not responded to questions about the liquor industry’s appeal by the time of going to press.
Estimates show the industry contributed R51bn in indirect taxes in 2019, with just over R33bn in excise duties and R17bn in value added tax (VAT).

The fiscus is also not collecting excise duties on tobacco, since a ban on the sale of these products was imposed when the lockdown was first introduced at the end of March. It is estimated that R4bn in tobacco excise duties has already been lost.

Bernard Mofokeng, tax partner at CMS RM Partners, said Sars was generally reluctant to allow postponement of excise duty and VAT payments because these taxes were susceptible to fraud.

“There is so much fraud in liquor and tobacco products, government is losing billions. It is already undercollecting,” he said.

Mngadi said the liquor industry was aggrieved about not having been consulted over the renewed ban. “We reiterate our commitment to partner with the government to create a social compact that drives behavioural change regarding the use and consumption of alcohol,” he said.

Professor Francois Venter of the Wits University Reproductive Health & HIV Institute, who is a member of the MAC, but not speaking as a MAC member, said traffic accidents were also to blame for trauma admissions.

“Look at admissions to hospitals when lockdown level 4 was in place and alcohol was banned. There were increasing trauma admissions related to vehicle accidents.

“People argue hospital beds are being protected, which is fair, but the unintended consequences need to be taken into account.”

Another member of the MAC, who asked not to be named, said there were major disagreements within the advisory body over the science relied upon to impose the ban.

“The slides we and the rest of the country were shown was half-baked science presented by known prohibitionists,” this person said. “If South Africans knew they would be furious, especially the alcohol industry.”

This council member said politicians were using the MAC to pass legislation based on dubious science. “The ban was definitely political. It points to the police and other law enforcement agencies being unable to police properly, especially around shebeens and drunk driving.”

Parry said the MRC had recommended tighter curbs on hours of sale for alcohol but not an outright ban.

“Our findings called for government to go the lighter route and tighten up on sale days rather than an outright ban because of the pushback that would come from people and the liquor industry,” he said. “It looks like government ran out of time. Honestly speaking, I was surprised by the ban.”

But Parry said it was irrefutable that banning or restricting alcohol sales led to declines in hospital admissions.

“[Research] showed the increase in admissions when the ban was lifted. Some hospitals in KwaZulu-Natal recorded 100% increases. Some Gauteng hospitals had 500% increases. Some Western Cape hospitals experienced a 60% admissions increase.”

He said that before the lockdown there were on average 42,700 trauma admissions a week in SA, across nearly 400 public tertiary hospitals.

“Of the alcohol-related admissions, 38% are violence related, 13% are accidents such as falls, 6% vehicle accidents and 2% self-harm,” Parry said.
“Each of these injuries has a burden on the health-care system. The cost of treating a stab injury in a state hospital is R5,352. To treat a vehicle-accident victim costs over R25,400, where a person spends one day in ICU and five days in a general ward.”

17th July 202017th July 2020

South Africa could introduce these new drinking laws to combat alcohol abuse

Parliament’s Portfolio Committee on Health has agreed to formulate an ‘action plan’ around the issue of alcohol abuse in South Africa.

BusinessTech

This follows a briefing from the South African Medical Research Council (SAMRC) which found that the reintroduction of the sale of alcohol has led to a significant increase in trauma cases at the country’s hospitals.

Committee chairperson Dr Sibongiseni Dhlomo said that while relatively few South Africans consume alcohol, many of those who do, consume alcohol excessively.

He said that the committee is of the view that South Africa cannot continue to debate the gross domestic product (GDP) benefits of alcohol sales and not talk about ‘the costs of cleaning up’ after alcohol has been abused.

Hospital admissions, intensive care usage, gender-based violence and death all escalate as a result of excessive alcohol consumption, he said.

“The committee has agreed to meet next week to formulate an action plan on the basis of the report.

“This is in line with a letter sent to the Speaker of the National Assembly by a group of academics, researchers and policy specialists offering advice on steps to curb the abuse of alcohol in South Africa. The letter has since been referred to the committee for consideration.”

Policy changes

While the SAMRC’s presentation primarily focused on the impact of the coronavirus, an accompanying question paper developed by parliament’s internal research unit outlined some of the draft regulations which lawmakers should consider.

“South Africa needs to control alcohol in order to save lives, improve health, and strengthen the economy. This is possible given the listed three draft Bills that require deliberation in order to increase regulation,” the researchers said.

The three draft bills which have previously been mooted include:

The Draft Control of Marketing of Alcoholic Beverages Bill of 2013;
The Draft Traffic Amendment Bill of 2015;
The Draft Liquor Amendment Bill of 2017.

The Draft Control of Marketing of Alcoholic Beverages Bill primarily deals with advertising, including where alcohol may be sold, what times alcohol advertisements may be shown on TV, and who alcohol may be sold to.

The Draft Liquor Amendment Bill proposes much more wide-reaching changes including:

Increasing the drinking age to 21 years;
The introduction of a 100-metre radius limitation of trade around educational and religious institutions;
Banning of any alcohol sales and advertising on social and small media;
The introduction of new liability clause for alcohol-sellers.

Drunk-driving

The Traffic Amendment Bill has already been approved by President Cyril Ramaphosa and is set to be introduced before the end of 2020.

Alongside a number of other traffic-related offences, it will create a zero-tolerance approach to drunk driving.

It introduces a total prohibition for the use and consumption of alcohol by all motor vehicle operators on South Africa’s public roads.

The National Road Traffic Act (NRA) currently enables those who have consumed alcohol to get behind the wheel provided they are under the blood alcohol limit.

These laws differentiate between normal drivers and professional drivers (those drivers who hold professional driving permits).

For normal drivers, the concentration of alcohol in any blood specimen must be less than 0.05 gram per 100 millilitres, and in the case of a professional driver, less than 0.02 gram per 100 millilitres.

The new laws would make this limit zero in both cases.

16th July 202016th July 2020

It pays to keep a beady eye on municipalities – as Joburg City backtracks on tariff increases.

DearSA takes notes of the fact that the City of Joburg has decided to reduce the proposed increases in property, water and electricity tariffs after considerable public outrage from Joburg City residents.

Here’s what the City eventually agreed, after a vigorous campaign by DearSA and other civic groups:

Property tariffs will go up 4% instead of the proposed 4.9%
Water tariffs will go up 6.6% instead of 8.6%
Electricity tariffs will go up 6.23% instead of 8.10%.

This will not satisfy many city residents who believe the City should have dropped tariffs – rather than offer a slightly lower increase – in light of the Covid economic crash, which has resulted in an estimated eight out of 10 South Africans experiencing a reduction in income.

The fact that Joburg City backtracked (somewhat) on its proposed tariff increases is due in no small measure to the public campaign run by DearSA, which brought this to the public’s attention.

Around 14,000 DearSA municipal campaign participants demonstrated the power of participative democracy, and what can be done when citizens are mobilised. But we cannot let it rest there.

view the participation campaigns here

There are 257 municipalities in South Africa, and very few of them garner the attention that Joburg City did. Only 18 of the 257 received clean audits from the Auditor General (AG), compared with 33 in the previous year. Irregular expenditure across all municipalities came to a staggering R32 billion. Some 91% of municipalities did not comply with legislation.

Municipalities are back-sliding at an alarming rate.

Some of the worst-managed municipalities are in far-flung dorpies where few people pay much attention to their dismal financial management or the quality of the services they deliver. We recently learned that Steve Tshwete Municipality in Mpumalanga gave its municipal manager a 48% annual increase in the midst of a lockdown. The six senior managers of Steve Tshwete Municipality voted themselves an average 16.8% increase.

It’s time to change that. We need to pay far greater attention to the budgets of the 257 municipalities around the country. Councillors are awarding themselves inflation-plus increases in complete disregard for the ability of residents to pay. They must be held to account.

Some municipalities – such as Ekurhuleni – are showing some sensitivity to the plight of their residents by holding rates and taxes increases to 0%, and freezing electricity tariff increases for the poor. That said, the 4% salary increase for councillors is concerning given that between 150,000 and 200,000 residents in the municipal area are reckoned to have lost their jobs.

Ekurhukeni, however, is better managed than most. To get a sense of how awful municipal management is we need look no further than the AG’s 2019 municipal audit report, which suggests 60% of revenue reflected on the books of municipalities will never be paid. There has been a growing trend of individuals and established businesses showing signs of a diminishing ability to pay for services, or simply refusing to pay.

The AG report tells a disturbing story of most municipalities “crippled by debt and being unable to pay for water and electricity; inaccurate and lacklustre revenue collection; expenditure that is unauthorised, irregular, fruitless and wasteful; and a high dependence on grants and assistance from national government”.

While the AG has now received enhanced powers to investigate material irregularities in all public entities and refer complaints to law enforcement bodies, greater citizen engagement at local government level is essential to combat the rot that has gripped municipalities.

This will also assist the AG in doing its job. Once material irregularities have been reported to law enforcement and no action is taken by the stipulated date, the AG must take action itself and instruct the accounting officer at the public entity to quantify and recover the loss.

If that fails, the AG must issue a certificate of debt to the accounting officer or the relevant accounting authority. It then falls to the minister or other executive authority to recover the loss.

It’s time for citizens to stand up and make their voices heard. Especially, though not only, at local government level.

DearSA will be keeping a beady eye on this sector of our governance and will alert you to key developments around the country. This is where some of the worst and most toxic corruption is taking place. It has to be stopped if we are to have a proper and functioning democracy.

15th July 202015th July 2020

Govt promises to consider input as it seeks comment on lockdown regulations

This comes after President Cyril Ramaphosa announced an immediate ban of the sale of alcohol and a curfew, forcing South Africans to stay home between 9pm and 4am.

Theto Mahlakoana EWN

The public has been invited to make comments on the recently amended regulations to level three of the lockdown, with government promising to consider their input.

This comes after President Cyril Ramaphosa announced an immediate ban of the sale of alcohol and a curfew, forcing South Africans to stay home between 9pm and 4am.

The government said that the decision to enforce stricter regulations followed the spike in new COVID-19 infections and related deaths.

With many of the existing regulations, including the prohibition of the sale of tobacco products and the non-visitation of family members, are under review in courts across the country. The government has chosen to tread carefully by consulting the public.

Although the comments will only be considered with the laws already enforced, Cooperative Governance Minister Nkosazana Dlamini-Zuma said that the decisions were made in the best interests of South Africans.

Government has also defended its decision to criminalise the non-wearing of masks.

On the decision to ban visits among family members, the national COVID-19 command council has explained that this was due to the loophole this created for people to host parties and other platforms that had led to the surge in COVID-19 positive cases in some parts of the country.

13th July 202013th July 2020

Curbs don’t limit freedom, they limit Covid-19: Nkosazana Dlamini-Zuma

BY ERNEST MABUZA – TimesLIVE

Stringent lockdown measures announced by President Cyril Ramaphosa on Sunday, including the suspension of liquor sales and the return of a night curfew were being imposed to limit the spread of Covid-19.

Co-operative governance & traditional affairs minister Nkosazana Dlamini-Zuma said this in a follow-up briefing on Monday.

She said though SA was number 25 in terms of population size in the world, it is now ranked 10th highest in the number of Covid-19 cases.

She said SA ranked higher in terms of the number of new cases per day. “We must do everything to protect this beautiful nation of ours.”

Dlamini-Zuma said the announcement by Ramaphosa on Sunday was to combat the spread of the virus.

She said it was now a criminal offence not to wear a mask in a public place.

“When you wear a mask, you are not protecting only yourself but people about you,” she said.

She said if one did not have a formal mask, one could use a cloth or any material to cover the mouth and nose.

“Now it is mandatory. It is mandatory to wear a face mask because it is one of the measures at our disposal to protect ourselves and to protect people about us.

“The provision in the regulations now says the mandatory wearing of the face mask or any face mask, cloth mask or anything that you can use to cover your mouth and nose while you are in public.”

She said the regulation also says one cannot enter any form of public transport without wearing a mask. She said social distancing still remained important and people should avoid activities that disregarded those responsibilities.

“That is why social activities are still not allowed. So one of the things that we know becomes difficult when people are sitting together and continue to wear masks is also alcohol.”

She said when people are drinking in groups, they let their guard down.

“Their masks will go and social distancing will go. The spread will happen and we have seen it in many instances.”

She said drinking of alcohol socially brought people together and discouraged them from using masks, from social distancing and sanitising.

“More importantly when people have taken liquor, they get drunk, they engage in irresponsible behaviour, some of them become violent, they start fighting, killing each other.

“Even at home they become violent. When they get into their cars, they start driving recklessly, creating accidents.”

She said those people had to be rushed to hospitals, which means they were taking space that should be used to look after people who are ill and people who have Covid.

“Some of them need theatre, ICU beds and ventilators and taking away from those who are ill and who need it from Covid-19.”

Alcohol-related emergency cases diverted the services of medical personnel who should be in ICU looking after people with Covid-19.

“What happens then is the ICU gets full, beds in hospital get full and people who need those beds will not have access to them. It is for that reason that the cabinet has decided we need to suspend the sale of alcohol transportation and dispensing of alcohol,” Dlamini-Zuma said.

Dlamini-Zuma said the government was not limiting people’s rights.

“The government is trying to limit the spread of the virus because the spread happens through the movement of people. The virus is moved by people. It is spread by people. It is me who moves it. It is you who will move it. Part of limiting the movement is part of limiting the spread of virus,” Dlamini-Zuma said.

She said it was for that reason that the curfew was brought back from 9pm to 4am. Interprovincial travel is not allowed, except for funerals, work and business travel.