Category: dearSA

The external experts have been appraising government’s land reform process, with a focus on policy, legislation, frameworks and institutional arrangements.

“As it can be seen from the report, the panel used multiple processes to arrive at their recommendations.

“They reviewed existing documentation such as policies, legislation, as well as understanding consultation with a range of stakeholders, which included government departments; and state entities.

“Attention was given to the funding of land reform, as well as proposals on how this important mandate can leverage on those private individuals who are willing to donate land to the state for land reform purposes.

“Given its time frame, it can be appreciated that some recommendations could not be extensively canvassed. Further work on some recommendations, will therefore have to be undertaken,” said Didiza.

Asked what the country would resemble after the implementation of expropriation of land without compensation, Didiza said: “We would like to see an inclusive society, non-racial and non-sexist in terms of ownership.”

Agri SA reacts

Government was under no obligation to implement any of the proposals of the advisory panel, Agri SA said yesterday (Thurs).

In response a Cabinet decision not to endorse some of the PAPLRA recommendations on land reform it found not feasible, Agri SA head of land affairs Annalize Crosby said her organisation supported the move.

“With respect to a land tax and land ceilings, we are relieved that government has chosen not to blindly implement those recommendations.

“We do however, believe that a land reform fund, based on a public-private partnership, is essential and that current budget allocations for land reform fall far short of what is required. We also support an agricultural development agency of sorts,” said Crosby.

She added: “Cost is a factor that needs to be considered. But there should be a huge focus on effective implementation. We think that should be done through public-private partnerships.”

She quoted a Constitutional Court judgment in the Mwelase case that “touched at the heart of the problem”.

Read the judgement: “South Africans have been waiting for more than 25 years for equitable land reform. The department’s failure to practically manage and expedite land reform measures in accordance with constitutional and statutory promises has profoundly exacerbated the intensity and bitterness of our national debate about land reform.

“It is not the constitution, nor the courts, nor the laws of the country that are at fault in this.

“It is the institutional incapacity of the department to do what the statute and the constitution require of it that lies at the heart of this colossal crisis.”

Article by The Citizen

Minister Thoko Didiza: Presidential Advisory Panel on Land Reform and Agriculture

19 Dec 2019

Minister Thoko Didiza updates the nation on the Presidential Advisory Panel on Land Reform and Agriculture recomendations that were not supported by cabinet.

On 24 July 2019, Cabinet received the Report of the Presidential Advisory Panel on Land Reform and Agriculture chaired by Dr Vuyokazi Mahlati, which made recommendations. Once again, Government extend its appreciation on the work that the panel has done in highlighting areas that government must continue to address in respect of land reform and agricultural development in our Country.

Cabinet has approved the publication of the Municipal Fiscal Powers and Functions Amendment Bill for public comment, says Minister in the Presidency Jackson Mthembu.

The Bill amends the Municipal Fiscal Powers and Functions Act, 2007 (Act 12 of 2007), the Minister told reporters during a Post-Cabinet briefing on Tuesday.

“It regulates the powers of municipalities to levy development charges in respect of land development applications submitted to the municipality,” he said at the briefing held at the Government Communication and Information System (GCIS) head office in Pretoria.

According to the bill, development charges are one of the instruments that municipalities can use to finance the development of municipal infrastructure.

“This enables municipalities to execute their role of providing well-maintained and functioning infrastructure services to unlock economic growth,” he said.

Auditing Profession Amendment Bill

Meanwhile, Cabinet has also approved the submission to Parliament of the Auditing Profession Amendment Bill. The Bill amends the Auditing Profession Act, 2005 (Act 26 of 2005).

“The Bill proposes that the Independent Regulatory Board for Auditors be empowered to subpoena any person with any information required to complete an investigation on improper conduct by auditors,” said Mthembu.

The amendments also empower the Minister of Finance to determine the maximum amount which can be imposed on an auditor with a guilty finding following a disciplinary hearing.

Article by Businesstech

Department of trade & industry officials have warned against expropriating land owned by foreign nationals, saying  it contravenes existing bilateral investment treaties.

Doing so could also result in SA being denied access to key markets such as the US.

The country has 22 such bilateral agreements, but the cabinet decided in 2010 to terminate the arrangements following concerns that the treaties were unbalanced in favour of the  investors.

Ramaphosa has let down millions by signing a law that puts them at the mercy of traditional leaders and commercial interests.

President Cyril Ramaphosa faces myriad mean national challenges.

Eskom immediately comes to mind; it must continue to keep the wheels of a declining economy turning, the street and household lights aglow, and the home fires burning.

The president has just put the floundering national airline on business rescue, and not a day too soon considering the impending job losses.

Nothing seems to be going right at SAA and that has been the case for quite a while.

An infographic doing the rounds online shows that SAA employs 957 staff per aircraft, in stark contrast to an average 150 employees said to be hired by the competition.

The airline’s latest financial report states that SAA made a loss of R10.4 billion in the past two financial years, over and above a succession of hefty government bailouts.

This does not portend a bright future.

Beyond these travails, the president leads a nation afflicted by a surfeit of chronic social and political maladies, a disastrous education system, femicide, murder, drug abuse and widespread corruption, all of which defy resolution in the short term.

Against this background, it is difficult to figure out what ill wind blew in the direction of a president already saddled with inherited conundrums, impelling him to gratuitously add more woes of his own.

Pleas from many credible voices beseeched Ramaphosa not to sign the Traditional and Khoisan Leadership Bill into law.

But the mighty presidential pen has signalled his approval of the condemnation to second-class citizenship of some 18 million people who inhabit what were formerly called Bantustans, apartheid’s cruel legacy.

This is egregious folly.

The president’s own advisory panel on land reform and agriculture specifically stated that enactment of the bill would infringe on section 25(6) of the Constitution, which protects customary and informal property rights.

A high-level panel on land reform and rural development, mandated by Parliament and chaired by former president Kgalema Motlanthe, also warned against it.

In a petition delivered to the Union Buildings in Pretoria, credible grassroots organisations such as the Alliance for Rural Democracy and Sonke Social Justice also entreated the president not to sign the bill.

People picketed in front of Parliament, while the Land and Accountability Research Centre expounded on the potential harm that the bill would cause to the affected communities if approved by the president.

Aninka Claassens, of the department of public law at the University of Cape Town, a respected authority on communal land issues who has served as an adviser to a land affairs minister, advised against signing this bill and another similarly pernicious one, the Traditional Courts Bill.

Affected communities insist that they should be adequately consulted regarding any investment plans that involve the use of communal land and that they should give their informed consent before any contracts are signed.

This is as it should be, for the Constitution regards communities as the rightful owners of the land.

The Interim Protection of Informal Land Rights Act also acknowledges this.

But section 24 of the Traditional and Khoisan Leadership Bill, which is now an act, substantially negates the Interim Protection of Informal Land Rights Act in the interests of traditional leaders, whom it calls on to merely “consult” community members. Kanjani?

Traditional leaders do not own the land that falls within their authority, therefore they do not hold the powers to make such decision.

In fact, research shows that the majority of tribal land is private land bought by families, sometimes jointly, and governed under community property association guidelines or community-based constitutions.

Mr President, why must the ANC government find itself at loggerheads with rural communities, its historical allies?

It is costly for communities to go to court to protect their rights, but they will and the justice system will find in their favour – as was the case in Maledu and Others v Itereleng Bakgatla Mineral Resources (Pty) Limited and Another (Dlamini and Land Access Movement of South Africa as Amici Curiae), as well as Baleni and Others v Minister of Mineral Resources and Others.

Informal land rights are real and enforceable under our Constitution; so is security of tenure.

Members of affected communities refer to the Traditional and Khoisan Leadership Bill and the Traditional Courts Bill as Bantustan bills, just to let the ANC and United Democratic Movement parliamentarians know.

Corruption Watch, which has over the past few years incorporated the mining sector in its body of work, has received many reports that detail abuse of power and corruption within traditional leadership structures.

A key feature of the reports is the blatant exclusion of mining-affected communities from the value chain of the so-called development projects.

Space limitations only permit the highlighting of a few of the cases.

In West Pondoland, King Ndamase Ndamase signed a R1 million lease agreement with a foreign investor with the aim of developing a megacity on the Wild Coast, Eastern Cape.

In return, he was expected to clear the land and relocate people living south and north of Port St Johns. There is no clarity as to where the community will be going.

The Chief of the Makuleke community in Limpopo sold 30 hectares of land without the consent of the most affected people, some of them private land owners who have not been compensated.

The Bakwena ba Mogopa community in the North West is embroiled in a dispute with the royal and traditional leadership regarding its non-involvement in decisions over a mining operation in the area.

The community is also concerned about the influence of the provincial government in traditional governance.

There is evidence that government officials failed to deal with confirmed cases of corruption within the traditional structures.

Recently, the commission of inquiry tasked with investigating financial corruption in the Bakgatla ba Kgafela mining concession in the North West reported that an estimated R3.5 billion worth of assets and trust accounts were held in the community’s name, yet the community was in the dark regarding these benefits.

In the neighbouring Bapo ba Mogale, the Public Protector reported that an estimated R600 million had been siphoned out of community accounts, based on agreements between traditional leaders and the mining company.

Mr President, the bill you have just signed into law will legitimise the status quo of treachery and grand larceny.

People need your protection, please save them from the voracious feeding pack.

The ANC veterans had suggested that before signing this odious bill the president should consider referring it to the Constitutional Court for the opinion of the Justices.

They have to date been flawless in their interpretation of the Constitution, especially on matters affecting the poor.

Perhaps this can still be remedied.

Article by City Press

The sixth democratic Parliament has had a demanding 28 weeks since its establishment following the May general election. On the agenda were 31 Bills revived from the stage at which they lapsed when the previous Parliament’s term ended – and another 13 new Bills.

It is these new bills which are likely to dominate the conversation in 2020, as they propose major changes around property and healthcare.

BusinessTech looked at this new legislation in more detail below.

Land expropriation without compensation

The parliamentary committee on land expropriation published its new draft bill for public comment on 6 December.

The draft Bill aims to amend the Constitution to provide that, where land and any improvements on it are expropriated for the purposes of land reform, the amount of compensation payable may be nil.

However, the bill itself does not specify the circumstances when no compensation may be given.

Instead, it states that a separate piece of national legislation must set out the specific circumstances where a court may determine that the amount of compensation is nil.

Written submissions on the bill must be received by no later than 31 January 2020.

NHI 

The Portfolio Committee on Health has embarked on a public participation process involving written submissions and public hearings around the new National Health Insurance Bill.

The bill promises universal health coverage to every South Africa, but will also act as form of ‘compulsory insurance’ as the NHI Fund acts as a single purchaser and single-payer of healthcare services in South Africa.

Under current legislation, a medical scheme member generally chooses the doctor, hospital and specialist and the medical scheme refunds that expense to the member, or for convenience directly to the provider of the service.

Under NHI, the Fund purchases the health care service “on behalf of the user” (mainly South African citizens and permanent residents) at accredited healthcare providers free of charge at point of care.

While the NHI is only expected to be introduced in several years time, government and regulators have already begun making major changes in preparation for the new system.

There has been heavy opposition to the bill from both opposition parties and the private sector and this is likely to continue into 2020.

Nationalising Reserve Bank

Parliament officially revived the bill which proposes the nationalisation of South Africa’s Reserve Bank in October 2019.

The bill – that spooked investors when first unveiled a year ago – comes at an awkward time for President Cyril Ramaphosa, who is on an investment drive to boost an ailing economy.

In August 2018, the EFF tabled the South African Reserve Bank Amendment Bill, which seeks to nationalise the central bank.

South Africa’s central bank is one of the few in the world that’s still owned by private shareholders.

The draft bill provides for the following:

• The State as the sole shareholder of the shares in the Bank;
• The responsibility of the President of the Republic in consultation with the Minister of Finance and Parliament to appoint the Governor, Deputy Governors and all other directors of the Bank; and
• The role of the Minister of Finance as a shareholder to exercise the rights attached to the shares in the Bank.

While the bill is a ‘private members bill’, it aligns with the ruling ANC’s own position on nationalising the Reserve Bank which means it may gain traction from the ruling party.

However, the government may ultimately decide to publish its own draft bill around nationalisation instead of using the EFF’s framework.

President Cyril Ramaphosa’s decision to sign the highly contested Traditional and Khoi San Leadership Bill into law has been criticised by at least one civil society organisation — and may even be challenged in court.

The announcement that Ramaphosa had signed the bill was made during a meeting of the National Assembly’s programme committee on Thursday, and a government gazette was published later on the same day.

But the decision was met with unhappiness.

“The Traditional and Khoi-San Leadership Bill seeks to provide a veneer of legality to partnerships of extraordinary greed and complicity that already exist between government and the mining sector. Instead of regulating mining to ensure that basic rights and the environment are protected, this bill signals that government is happy to jettison the most basic rights of the poorest South Africans in order to maintain the precarious status quo,” said Aninka Claassens of UCT-based Land and Accountability Research Centre.

Claassens said they had expected Ramaphosa to refer the bill back to parliament after two panel reports warned that provisions it contained were in breach of fundamental constitutional rights.

The first report, in 2017, was by a high level panel created by the Speakers’ Forum and chaired by former president Kgalema Motlanthe. Claassens was a member of the Motlanthe-led panel. The second was by the president’s own Advisory Panel into Land Reform, which reported earlier this year.

“Numerous submissions warned that the bill undermines the customary and informal property rights protected by section 25(6) of the constitution, and abrogates the decision-making authority that is the hallmark of citizenship for the 18 million South Africans living in the former homelands.

“The president therefore had strong legal grounds on which to refer the bill back to parliament. He chose to ignore these,” said Claassens.

She said the bill provides for traditional leaders and councils to sign deals with investment companies without obtaining the consent of those whose land rights are directly affected.

“No prior law in SA history, even during colonialism and apartheid, has enabled traditional leaders to dispossess people of their land rights without either their consent, or expropriation,” she added.

Claassens said while civil society has repeatedly lauded the fact that the bill takes steps to recognise Khoi-San leaders and structures, there is a concern about the cost at which this recognition has come. Khoi-San communities, too, will be subject to the rights abrogations enabled by the bill, she said.

The ANC has previously said it views the bill as part of the mechanism and instrument geared at correcting SA’s painful past and recognising the Khoi and San people by restoring their dignity, identity, language, leadership and their culture.

Among its contested clauses, is that it provides that “a (traditional) council may only enter into a partnership or agreement if the relevant community has been consulted and the majority of community members present at such a meeting have taken a decision in support of the partnership or agreement to foster transparent democracy and community participation on matters that affect them”.

But the ANC has defended the clause saying that, on the other hand, the bill makes it illegal for traditional leaders to act unilaterally and to enter into deals with the private sector such as mining companies without the consent of the community.

Claassens also questioned Ramaphosa’s timing in signing the proposed law saying the bill attempts to remove the consequence of legal invalidity for councils that fail to “transform”.

“Because many existing investment deals, particularly for mining, are legally precarious as the traditional councils that signed them were not legally compliant with the requirement to include some women and elected members”.

She said because two landmark judgments in 2018 uphold the right to tenure security in the context of mining in the former homelands — they provide that deprivation of informal land rights requires either the consent of those affected, or expropriation through due process of law —  the bill was amended shortly after the Maledu Constitutional Court judgment of October 2018 to attempt to get around this crucial new precedent.

Lawyers representing several rural communities wrote to Ramaphosa in September requesting him to send the bill back to parliament, charging that it was passed through unconstitutional means, it is substantively unconstitutional and cannot be signed into law.

In its report published in 2017, the Motlanthe panel called for an urgent review of both the Traditional Leadership and Governance Framework Amendment Bill and the Traditional and Khoi-San Leadership Bill, saying that based on the public contributions it received, current and proposed legislation on traditional leadership denied people living in areas under traditional leaders several constitutional rights, distinguishing them from those living in the rest of the country who enjoy the full benefits of postapartheid citizenship.

The newly signed laws were still being processed in parliament at the time the panel made its call. It said “such legislation poses a threat to social cohesion by entrenching and promoting ethnic identities”.

Article by Sunday times

Trade union Solidarity intensified its war against the government’s proposed National Health Insurance (NHI) and is now threatening to take the fight all the way to the Constitutional Court.

The NHI, which is before parliament for consideration, is the government’s plan to provide universal healthcare access to all South Africans. It is expected to be rolled out by 2026 and is estimated to cost R256bn.

“The NHI, should it come into effect, would bring an unprecedented disaster for South Africans,” said Morné Malan, a strategic specialist at Solidarity.

“We don’t know just how far government’s irrationality and insanity will go. We don’t know how many blows will be needed to stop the NHI, but we are ready to come up with as many blows as will be needed, and, ultimately, with even more as long as we can stop this disastrous policy,” said Malan.

“We are also ready to participate in all further processes, to lobby against the bill and to resort to court action right to the Constitutional Court should this bill ever be enacted.”

The trade union, which this week submitted its comments on the NHI representing a mandate of 30 000 people, reiterated its survey findings among health practitioners in the private and public sector.

“They are not being treated as individuals with rights but rather as resources and state assets that can be allocated as government deems fit. It is no wonder that our national survey among health practitioners shows that they are almost unanimous in agreeing that government will not be able to manage it and that health practitioners are not interested in working within such a system,” said Hennie Bierman, head of Solidarity’s Guilds.

The survey found that only 15% of respondents were of the view that the NHI could possibly be successfully implemented, while 84.5% indicated the implementation could destabilise the entire healthcare system.

“The NHI deprives health care practitioners of almost every freedom related to how and where they practice their profession; it turns doctors, nurses, pharmacists and all other health professionals into mere commodities, denying them their humanity, as it were,” said Bierman.

The deadline for written submissions on the NHI Bill closed on Friday, but oral submissions remain open.

The parliamentary portfolio on health, chaired by Dr Sibongiseni Dhlomo, conducted the final round of public hearings for the year in the Eastern Cape on Friday.

It is set to resume mid-January and end the first week of February next year.

The committee said in a statement that it is of the view that, both oral and written submissions received so far will contribute immensely in making the legislative framework which will lead to the achievement of the objective of the Bill.

“At the centre of this Bill is the preoccupation to ensure that there is quality healthcare system that caters for everyone. The quality and amount of written and oral submissions received from the people in Mpumalanga, Limpopo, Northern Cape, KwaZulu-Natal provinces have greatly enhanced the Bill,” Dr Dhlomo said.

Meanwhile, Finance Minister Tito Mboweni told the National Council of Provinces (NCOP) on Wednesday that the NHI system was the only opportunity for the SA public healthcare system to shape up, reported Fin24.

Replying orally to questions from members of the NCOP, Mboweni said he did not believe NHI should be considered the only panacea to the challenges dogging the public healthcare system.

“We don’t have to wait for NHI to be implemented to fix our public healthcare system. There are things that are within our power that can be fixed now,” Mboweni said.

Mboweni also urged MPs not to allow ideological persuasions to dictate their views around the NHI without considering the benefits it could yield for South Africans.

 – Compiled by Adiel Ismail

South African Airways (SAA) has spent its R5 billion government bailout in just one month but says it needs much more money to stay airborne.

Not too long ago, during his mid-term Budget Speech, Finance Minister Tito Mboweni begrudgingly admitted that government would, once again, replenish SAA’s beleaguered bank account with R5 billion.

SAA’s R5 billion blowout

Mboweni later said that the national carrier should be shut down as it’s a financial burden on the state. A month later, Adrian Lackay, the spokesperson for the Ministry of Public Enterprises, said that government was both unwilling and unable to continue bailing the embattled company out of its self-imposed financial despair.

Yet, the horror of Mboweni’s allowance announcement on 24 October has been overshadowed by the state owned enterprises’ spectacular spending spree.

By 10 November, SAA’s CEO, Vuyani Jarana, admitted that the company had already spent R3 billion of the bailout to cover urgent debts. Almost three weeks later, while addressing members of parliament, both Jarana and the airline’s CFO, Deon Fredericks, confirmed that the remaining R2 billion had been spent on further “practical capital requirements”.

While the R5 billion bailout was intended to pull SAA out of the doldrums of economic collapse, company executives have, once again, approached government, cap-in-hand, crying imminent financial ruin.

How much money does SAA really need to ‘turn it around’?
According to a report penned by Carol Paton and published by Business Day, SAA will require another R16.7 billion from the government in order to avert complete financial and operational collapse. This bailout is expected to take the form of both capital and loan guarantees.

SAA needs R3.5 billion immediately, as in, before the end of the year. The embattled airline needs a further R4 billion by March. The rest of the funds are to cover exorbitant debts which are expected to mature in four months.

As unbelievable as it sounds, this means that SAA will have burnt through R8.5 billion in less than three months.

More shocking is the fact that, even with these gigantic government bailouts, the national airline has pushed its projected ‘break-even’ date back even further. Fredericks explained that the company had banked on an average oil price of $45 a barrel, when, in reality, the price hovered around $75 a barrel for most of the year. SAA says it will begin to turn a profit in 2021.

During its parliamentary presentation, the SAA board explained that the airline was due to make a loss of R5.2 billion in 2019 and another loss of R1.9 billion in 2020.

article by The South African

Note: The original version of this article was published on 25 June 2019, with the international tax-to-GDP ratio figures based on data from the IMF. After discussions with National Treasury, it was agreed that tax-to-GDP figures from the OECD provide a more relevant picture when South Africa is compared with other countries, as the IMF data do not include social security contributions or provincial taxes. The article was revised on 12 July 2019 to reflect this.

Personal income tax has become more important as a source of government revenue in recent years. Stats SA’s latest publication provides a breakdown of the latest tax data from national government.

Personal income tax contributed over a third of the R1,22 trillion in taxes collected by national government in the 2017/18 fiscal year, according to Stats SA’s Financial statistics of national government report. The second biggest source of tax was value added tax (VAT), followed by company income tax (click on the image to enlarge).

The tax mix looked starkly different a decade ago. In 2008/09, national government collected about the same amount of personal income and company income tax: contributions that year were 31% and 30% respectively.

The 2008–2009 global financial crisis, which resulted in South Africa’s first economic recession since 1994, was particularly hard on businesses. Revenue from company income tax declined in 2009/10, and since then has grown at a much slower rate than the amount collected from personal income tax.

Tax revenue has been increasing despite weak economic growth. The tax-to-GDP ratio, which gives a sense of the tax burden, shows tax revenue as a percentage of gross domestic product (GDP). In 2017/18, South Africa’s tax-to-GDP ratio was 25,9%.1 The chart below shows how the tax-to-GDP ratio has grown since the late nineties, peaking at 26,4% in 2007/08.2 The higher the percentage, the higher the amount of tax collected relative to the size of the economy.

How does South Africa compare with other countries in terms of the tax-to-GDP ratio? Data are available from both the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD). The IMF places South Africa in the top 10 list of countries with the highest tax-to-GDP ratio.3

However, it is important to note that the IMF data exclude social security contributions and provincial/state taxes. The OECD data, on the other hand, do include these two items. Since some countries rely more heavily on social security contributions and regional taxes than South Africa, the OECD data provide a more relevant picture for making comparisons.

Compared with the 36 member countries of the OECD, South Africa finds itself at the lower end of the chart below, with a smaller tax-to-GDP ratio than the United Kingdom, Greece and Italy.4

Is having a high tax-to-GDP ratio a good or a bad thing? It depends on each country. For a nation that has a high ratio but where taxpayers are receiving good value for money, a high tax burden might not be that detrimental. Countries such as Denmark, Sweden and Finland have high tax-to-GDP ratios, but these nations report the highest standard of living.

A very low tax-to-GDP ratio can be problematic as it may be a sign of an inefficient tax system. A government will struggle to provide services, build infrastructure or maintain public goods if it fails to collect taxes during periods of strong economic growth. Indonesia, for example, has in recent years committed itself to raise its tax-to-GDP ratio from 10% to 15%.5

The tax-to-GDP ratio alone provides no indication of good governance, the efficiency of the taxation system in the country, nor the way in which taxes are used or distributed.