Archive | Cabinet,Presidential

Minister Nene maps survival route

Not so merry Christmas….


candlesWithout wishing to put a dampener on festive arrangements, the last few weeks of the closing parliamentary session, which included the medium term budget from minister Nene, have seen a difficult period, not in the least caused by fiascos in the National Assembly with the EFF. Baiting President Zuma, whatever the reason, has nothing to do with running a country.

Such hooligan behaviour completely demeans the status of Parliament but worse, it also denigrates all the real work that is going on the engine room of Parliament, the working committees.  Some observers are quietly happy that the ANC Alliance is being called to account on certain matters but the overall effect has been to take South Africa perceptually into dangerous waters.

Nkandla unpleasant diversion

The Nkandla issue has clearly damaged the political standing of Parliament as well as giving the media a field day, or a field month as the case turned out to be.  But in the parliamentary portfolio, ad hoc, finance standing and NCOP select committees, the work has gone on and it has been a busy and difficult period as a result of the necessity to approve finance minister Nene’s medium term budget.

Difficult because some fifty utilities, government departments and section nine companies had to declare their objectives, say how things were going and reflect upon the auditor general’s findings on each of them.   Difficult because cabinet statements are really giving no true direction on questions being asked every day in Parliament.   Difficult because it is still the first year of a new Parliament and everything is running late with new MPs.

Whilst the auditor general (AG) may have declared that government departments only received 15% unqualified reports, the balance of 85% are qualified to some degree by the AG.  A learning process. This means the working committees have seen it, everyone knows about it and the system works. This is the difference between weekend newspaper reporting and monitoring. It is not just a question of putting a positive spin on things but recognising that there is, indeed, a force working for morality and financial correctness.

Focus is on medium term budget

Nevertheless, minister Nene’s budget speech was still the key issue of the last month, not Nkandla as the perception might be.  Nene’s remarks that “business is a key area in fostering the ideal that the NDP becomes a reality” had the all too familiar ring of what Alec Erwin had to say twenty years ago when the ANC promised private and public partnerships on energy matters. Nothing happened of course, the ANC embarking upon ten years of infrastructure inactivity.

In fact major private sector participation in the country’s development was totally halted at that point and has since never really got going.

When is when?

Now the question is being asked once again as to whether the government will actually ever embark upon real hard core private/public investments, other than dishing out a few solar and wind power projects. This is the question being asked by opposition MPs in Parliament at working committee level, ignoring for the moment the embarrassing fracas upstairs in the National Assembly.

It is difficult to imagine in parliamentary terms that minister Rob Davies, minister Tina Joemat-Pettersson, minister Jeff Radebe, minister Lindiwe Sisulu and minister Lynne Brown will ever truly understand the tenets, motivations and passion that drive businesses, even perhaps the President himself.  South Africa suffers from bad politicians, not necessarily bad government.

Circus with no ringmaster

What the presidential national planning commission is actually saying to the cabinet is an issue that cannot be guessed at by anybody at this stage, such private messages certainly not being conveyed in Parliamentary papers. In fact nobody seems to be talking, the DA having as little knowledge as half the SA cabinet, it appears.

Consequently minister Nene’s hopes appear somewhat lame at this stage. To be positive however, it may be that as next year’s parliamentary oversight programme on service delivery targets gains momentum, as it has already, accompanied with all the political pain that will occur if voters remain dissatisfied, political reality may force the governing party to at last start walking the talk that minister Nene espouses.

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DTI gives warning on investment climate

High administered prices a threat…

42X90693In an apparent warning to the economic cluster, a deputy DG at department of trade and industry (DTI), Garth Strachan, warned that South Africa was reaching “a tipping point” where administered prices, either levied or taxed by the various state departments, were so high that it was making the cost of doing business in South Africa totally impractical.


There was neither an attractive climate for investors because of high state administered prices, he said, nor did it make any easier DTI’s developmental programme in support of the NDP and attracting investors.

In a frank presentation to the portfolio committee on trade and industry, he qualified DTI’s position during his candid commentary with the caveat that as far as the regulation of administered prices were concerned, such as electricity, port and rail freight charges, road transport costs and water tariffs, that these were not the core competencies of DTI although they were adversely affecting DTI’s current IPAP 6.

Undermining investment climate

He noted later in his talk that in the successive implementation of various IPAPs, including the current industrial plan, DTI had found that administered prices constituted a total impediment to economic development.   In fact, now in 2014, they were providing a “serious economic shock”, as he put it, to the viability and competitiveness of the manufacturing sector.

Garth Strachan commented that the addition of carbon tax could push South Africa to the ‘tipping point’, unless the proposals were with “carefully calibrated policy interventions.”

As far as electricity was concerned, it was DTI’s view that the actual problem lay in the funding structures of local government, especially where no allowance was made for infrastructure upgrading and maintenance. Water shutdowns were also an increasing problem, he said.

He told parliamentarians that in one instance a global investor had experienced 140 electricity and water shutdowns. He did not indicate over what period.

International comparisons

He said that on electricity tariffs, whereas in 2009 when compared to China, the USA, Canada/Quebec, Abu Dhabi, Kazakhstan, India and Russia to give a fair geographic spread, South Africa had been with a group that had the lowest in prices, it now had the “gold medal” for being the highest of all and by 2020 the situation would be exacerbated unless something dramatic took place.

Strachan said that in the World Bank Report of 2013, SA port charges were amongst the highest in the world; container charges being 710% more than the global norm and automotive cargoes costing a premium of 874% more than the global norm. This detrimental fact was compounded by port and rail freight inefficiencies to local destinations.

He told parliamentarians that in DTI’s view it was extraordinary that exports were virtually subsiding raw material exports such as iron and coal.  In the case of coal, this was 50% below the global norm and iron ore approximately 10%, according to 2012 figures, these being the latest DTI could get.

This led, Strachan said, to the unfortunate situation where the country exported iron ore at a net loss to the country but imported girders, cranes and containers, for example, at possibly the highest in the world.  It was impractical to have subsidies passed on to exporters of primary products penalising importers of necessary needs, he said.

On carbon tax, he dismissed any “one size fits all” programme as contributing to the overall problem by making things worse and on climate change generally, he said that DTI was already working towards the protocols agreed by South Africa “through a range of measures to support energy efficient systems and investment in energy.”    These were part of DTI’s manufacturing enhancement programme, he noted.

He said there should be a shift in pricing “in favour of less carbon intensive sectors which are more labour intensive and value adding”. He quoted particularly steel, polymers and aluminium, which he said should be considerably below import parity levels.

Nullifying NDP objectives

Garth Strachan concluded that with manufacturers already going out of business, the issue of administered prices was probably the most important issue facing South Africa at the moment in the search to create more jobs.

Parliamentarians noted with concern what DDG Strachan had illustrated in his review. Many called for a joint portfolio meeting on the subject with public enterprises, transport and energy, despite the subject of administered prices also not being a core function of the trade and industry committee. For example, it was noted, they had no parliamentary right to influence such bodies as Transnet and Eskom, nor deal with treasury on tax and tariffs.


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Parliament : some clarity on policy emerging

Departments brief new Parliament..


Again and again the words ‘certainty’ and ‘uncertainty’ have arisen in parliamentary working committees,  not only in terms of the foreign investment climate but also in terms of borrowing, building and direction of strategies to achieve growth and the creation of jobs.

More than anything else, uncertainty seems to be South Africa’s greatest economic stumbling block. Even public utilities, let alone investors, bankers and private sector industrialists, have made submissions asking for clarity on government policy and decision making.

Cabinet indecision could be the problem. Leadership could be the problem. Let the political commentators decide but from a parliamentary viewpoint this week one sensed the first elements of certainty and clarity.

IRP being finalised

No doubt the news that the integrated resources plan is finally happening will bring more certainty to the energy sector and the recent nuclear and hydro decisions have let everybody know where that sector is going.

Whether recent decisions are considered right or wrong in the health sector, Minister Dr Motsoaledi seems to have a firmer hand on the tiller.  Similarly in the transport sector, and more than just hopefully but certainly, the first Brazilian train is due to arrive and new coaches will shortly be going through some new stations that are being built.

Minister Pravin Gordhan has brought his experience with SARS to bear on local government and his unsmiling manner will no doubt rattle many a cage down the line and produce the necessary repayment plans.   He appears, from reports coming to Parliament, to be getting around the constitutional problem of local affairs being out of bounds to national affairs and will bring a number of errant provincial and local employees to court.

Saving the day

Although Parliament still cannot amend a money Bill but only debate same,  national treasury seem to have come to the party to plug the gap in certain instances, thus getting rid of expressions like “currently in negotiation on possible funding” in departmental and state utility reporting. But a what cost and will this be enough?  Be that as it may, the gap has been plugged.

Whether recent events are good or bad news according to the governing or opposition parties, confirmation of direction in government policy takes the crystal ball out of planning and strategy.   Decisions can be made.

We sense at the moment some direction in parliamentary affairs and in the coming weeks, whilst there will be surprises for some such as the Areva nuclear build award, disappointments for some such as no reversal of the decision to proceed with carbon tax and the worry of the decision to increase electricity tariffs despite the multi-year fixing, at least we are beginning to know for certain where we are.

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Nkandla vs NDP: the argument rages


Has the emperor got clothes on?….

Whilst the nation focuses on the Nkandla issue, which has now involved to a lesser or greater extent the parliamentary process on the subject of who reports to who in terms of the Constitution, the largest elephant in the room still remains. This, of course,is how far the ANC will go to protect President Zuma in terms of the law, aside from the Constitution.

Accordingly, we have not monitored the issue further until the subject once again reaches the level of parliamentary committee debate.

Nevertheless, there still remains a smaller elephant in the room. Whilst this issue does not reach the media in the same way, it concerns business, manufacturing and industry to a far greater extent than the Nkandla issue.

Reality check

This smaller elephant concerns the ever-present issue of how to create more jobs in South Africa.  It also concerns the manner in which South Africa goes about achieving the noble aspirations of the National Development Plan (NDP).    Meanwhile, unemployment has now reached a record 45%.

MPs across party lines are of two minds on this. There are two distinct camps of thought developing on these subjects and attitudes are hardening on which approach should be taken.  Firstly, to put it in question form, are the state utilities really the controllers of our destiny and will a massive infrastructure spend by state institutions alone, with emphasis on black procurement, turn the economic corner as far as jobs are concerned?

Or, is the answer to create a very much more enlightened environment for investors on the basis that we need their money and is this sufficient excuse to play down some more investor-unfriendly legislation and regulatory red tape and a place less emphasis on BEE with its sad and long history of black non-empowerment?

Problems, problems

In every parliamentary committee meeting one can sense this philosophical and ideological problem.   Indeed, if this is not the commercial and industrial elephant in the room, it is the dichotomy that ANC whips have to handle on a daily basis and work hard with every party MP involving strong messages coming down from Lithuli House.

Witness the confusion of the power of African traditional leaders, which clearly emanates from the President himself; the necessity to bulldoze through certain unworkable legislation on transformation which then gets returned to Parliament on good legal advice; and the fight between finance minister Nene to suck in more for the fiscus to finance social welfare and health budgets with ridiculous customs and excise tariffs at the expense of the national deficit.

Stay positive

mantasheWe cannot comment, only observe, but somehow we believe that many of Gwede Mantashe’s more obtuse observations do not represent all of ANC parliamentary thought patterns.   We sincerely believe that within the governing party machine and with added well-tuned opposition, there will follow a sensible compromise in order to survive.

We also believe that it may be discovered by adherents that the emperor may not have clothes on, despite what the praise singers say, and that also, and more importantly, a good investment climate can be balanced with social imperatives.

Hof Communications

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Parliament votes on 2014 budget

Editorial _

Men and women at work…

Parliament  is currently a place of learning, particularly bearing in mind the 2014 budget is the first oversight task.   With so many new parliamentarians and newly re-structured committees with new chairpersons, insofar as learning is concerned,  it is more than just simply a new school term but a new school term in a new school.

As in the past, it will be a little time before things settle down and MPs gather enough understanding to perform the role with which they are entrusted; the role of oversight.

Most are savvy enough to understand the separation of powers even though party whips can become quite intimidating at times.  In any case, the system soon sorts out those with nothing useful to say and those with critical and questioning minds.

Approving the budget

The learning curve is steep. Many have been thrust straight into a committee programme where the task of each committee is to approve the national budget allocated to each of the many government departments according to their performance for the last five years. All of this departmental knowledge MPs have to read up on, study their plans for the next five years and listen to the same departments giving briefings presented at working committee level.  This is  currently where Parliament is.

To not contribute and not to perform is a quick trip to political oblivion.

MPs must also understand the views expressed of the auditors general on the previous year’s financial performances of the particular department and of state utilities; how the plans interlock, or don’t interlock properly, into a cluster of associated departments; a fair idea of what the presidential ministry of performance, monitoring and evaluation thinks of them and the party line on the issues of the day dealt with by the particular section of state machinery.

At this stage in the new Parliament the whole question of current legislation in process has probably not arisen but shortly, for many MPs, it will just be a case of listening and absorbing viewpoints, particularly of those who drafted the legislation and why they did.

Implementation of NDP

Two important things are therefore happening at the moment. Each government is justifying not only its past performance but committing itself to a plan with targets for the next five years together with strategies for a longer term and medium and long terms budgets. Secondly, they will learn what legislation is in draft and in the pipeline and the policy reasons for such legislation.

Consequently, question time in debate is critical and whilst questions from MPs can range from probing enquiries to the frankly banal, the change is refreshing. Witness minister Hanekom’s turnaround on immigration visas; the cabinet turn around on independent power producers; and on the affirmation of nuclear power in the energy mix and the sending back of the improbable Gender Equality Bill – all as examples of changes in thinking.

More interesting are the questions being asked by new MPs. Such as the new ANC energy committee member when she asked candidly of the DG for clean energy whether he thought all the “greening” regulations and air quality capital costs might be scaring off investors. Or the EFF MP who demanded a list of all Eskom blackouts and the reasons for the interruption in service.

Where it happens

To a certain extent the questions might appear naïve but a more candid and new perspective does no harm.  The parliamentary system still remains the crucible of political policy and legislative debate, despite the undermining effect that can take place with a heavily weighted political opinion coming from a strong political majority.    Nevertheless, South Africa is protected by one of the strongest constitutions in the world and the parliamentary process fortunately basks in its strong light.

Once the budget vote is debated, the Appropriations Bill – a section 77 money Bill protected from amendment by any party but Treasury by the same Constitution – Parliament’s attention will move towards the legislative landscape, hopefully tackling with as much vigour some of more the contentious issues facing the country.



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Nkandla debate rekindled by DA

ANC played for time on Nkandla issue….

The ANC used its hefty majority in the last Parliament to filibuster any full debate on Public Protector Thuli Madonsela’s report on Nkandla by calling for such debate to be after the election and thus by a new ad hoc committee when and if the next Parliament formed such a body.

The DA has already called upon the new Speaker of the National Assembly, Baleka Mbete, to enable a fresh ad mbetehoc committee to be formed and the debate re-started.

The committee was originally established by the now past Speaker of the National Assembly, Max Sisulu, to debate the R246m upgrade to President Zuma’s homestead in Kwa-Zulu Natal.   The Nkandla issue is at present an inconclusive subject relying purely upon Thuli Madonsela’s findings and not that of Parliament.

Delaying by inaction

The ad hoc committee was established in terms of ATC notice 45 of 2014, dated 9 April, and a delaying tactic was used by the ANC whilst it took eight days of the allocated ten day mandate for the sitting just to name its seven representatives on the ad-hoc committee.

Eventually, only two days of debate took place, the first to elect a chairperson who turned out to be Cedric Frolick of the ANC, with seven MPs from the ANC, two from the Democratic Alliance and one each from the IFP and FF+.    The ANC maintained at the first meeting that they had received insufficient time to study the report.

They referred to the fact that the then Speaker’s notice called for the ad hoc committee to make its findings known by April 30, the date already then being late April.   Again much time was wasted in the first meeting around the decision to allow a COPE party MP to attend the meeting, participate in the debate but have no vote. The COPE member appointed had a legal and constitutional background.

Give money back

The IFP said it wanted the President to be called to expand on why, when the Public Protector had “castigated government officials in the way they handled the Nkandla development” and called on him to refund large sums of money, “it was necessary to wait for the Special Investigating Unit (SIU) to report before he responded”.   The IFP thought that the SIU should be called to Parliament as well to explain their findings.

The IFP questioned whether the committee would be able to give adequate attention to the matter by 30 April, time for input also being required from the Parliamentary legal advisors in summation. The DA also called for the Public Protector herself to give evidence, since she had already declared her willingness to do this.

President wanted by DA to appear

On the second day of debate, the DA, again represented by Lindiwe Mazibuko and James Selfe, called for the President himself to appear before the committee.   The IFP added the point that surely the President must have been aware of “things taking place in his back yard and… should not shy away from responsibility”.   The DA presented in writing a full programme for the committee to undertake urgently.

buti manamelaThe ANC, led by ANC  Buti Manamela, national secretary of the Young Communist League, then argued that the ANC also wanted to call certain parties to give evidence and as there was insufficient time left to handle all such visits, the DA’s suggestions were therefore impractical given the mandate of ten days.

To this the DA argued that they were only short of time because the ANC had taken eight days to nominate and co-opt members of the committee whereas all opposition parties had taken one day.   The ANC did not respond to this.

Mazibuko’s last appearance

In response to the ANC’s point that Thuli Madonsela, as Public Protector, had finished reporting and it was not for parliamentarians to query her findings,  DA’s Mazibuko said her party was outraged because the Public Protector herself admitted in her report there were a number of unanswered questions on which she was unable to get clarity. The DA said they would like her to articulate on this to Parliament.

Also, Mazibuko said, the President in his letter of response to the Speaker, Max Sisulu, had referred to “stark differences” between the findings of the Public Protector and the inter-Ministerial committee, which was also set up to investigate the issue.   Both therefore should also give evidence if the committee were to highlight what the President referred to as “differences”.

No time

At this point chair Cedric Frolick said there was indeed insufficient time left, whatever the reason, to undertake such a programme as envisaged by the DA.

After caucusing, the ANC members tabled a proposal for a vote that the matter should be closed for the present and left over for the fifth Parliament of South Africa to further, choosing not to vote on a DA proposal asking for the President to attend.    They said there was insufficient time before the elections took place and that opposition parties were “playing to the gallery” as part of electioneering.

Motion that President misled Parliament

The DA then asked that a further motion be adopted, if the debate was to be ended, demanding that the fifth Parliament investigate whether the President deliberately misled Parliament; whether he had violated the Constitution; whether he had benefited improperly from the work at his residence; any remedial steps to be taken and whether the President should be removed from office in terms of section 89 of the Constitution.

This motion was defeated by an overwhelming majority, the ANC arguing that the fifth Parliament could not be bound by such questions from outgoing members and the ANC motion instead was adopted….. “that although the ANC considered the matter as serious, there was insufficient time left and the matter be simply deferred for the fifth Government to decide on future action.”    This quashed any chance of further debate at the time.

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Parliament will reflect new cabinet structure

Waiting for the new arrivals in Parliament……

Political comment is not in the vocabulary of monitors such as Hof, but curiosity as to the background and qualification for national debate of some of those on the party lists to become parliamentarians is inevitable.

We wait with bated breath to see what the “new crop” comprises and the background of those nominated as chairpersons of the 54 odd NA and NCOP portfolio and select committees, based on the percentage of a presumed ANC win.

Also, bearing in mind that the National Chairperson of the ANC, Baleka Mbete, has talked of a shrinking cabinet and the abandonment of certain government departments with possibly a new department for small and medium business, changes in due course will occur in parallel with parliamentary committee structures.

Mbete to play major future role

Nobody would know better than Mbete, as a past Deputy President and previously Speaker of the National Assembly, that changes at ministerial level means changes in Parliament.    Perhaps all of this might wait for ANC conference in a few months, where our curiosity is again provoked as to the future of President Jacob Zuma.

We will admit that we assumed that when Parliament was closed we would have little to monitor or report on, other than the Nkandla debate for which a number of parliamentarians were recalled.    However, a paucity of subject matter is far from the case….. the various departments having taken the opportunity to finalise a number of policy documents affecting business and industry.

Policy champions

An example of this is the publishing of the paper on carbon tax offsets and Minister Davies’ next IPAP plan, all this being in the light of the fact that some of the ministers, who may be leaving, wish to bring to finality their objectives during their five year tenure.

Rumours abound as to which ministers will be staying and which will be going but our report this week is as much on retrospective proposed legislation that has stayed as an “in-tray”  task  for the new, fifth government of South Africa, as well as commenting on future policy changes.

This is not forgetting that government departmental targets for public servants will remain, regardless of election results.

These are interesting times in our country, bearing in mind a slow recovery in the Western economy and pressure on South Africa to get its infrastructure build programme underway.

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Parliament of South Africa closes for elections

Fresh start

NA with carsNow that the Fourth Parliament of South Africa has ended, there exists the assumption that the ANC will remain the governing party and there also, therefore remains the assumption the same application will be applied to South Africa’s economic problems in the form of the National Development Plan.

This is now backed up in fact by the Infrastructure Developmental Bill, passed in the last few days, giving additional powers to Economic Development Minister, Ebrahim Patel, to help push the sixteen special infrastructure projects (SIPs) and give a power push to the work of the Presidential Infrastructure Coordinating Commission (PICC) in coordinating inter-governmental and inter-departmental issues involving the NDP.

Little else was on the minds of parliamentary committees as they finished their term of office other than infrastructure development, health with its forthcoming national health insurance proposal and delivery to the poor, not only in basic education but in land restitution.

New crew

With the coming of a Fifth Government of South Africa in May, many new parliamentarians will arrive for the first time; portfolio committees in the National Assembly and select committees in the National Council of Provinces will be re-formed; most of those committees having new chairpersons guided initially by the legacy reports of the outgoing parliamentarians.

It will be noted that our list of legislation on this website has been reduced by some 75%, indicating the number of Bills passed in the last few frenetic weeks and now sitting with President Zuma for assent; some of them already promulgated as law with government furiously developing the regulations that will make each law work.

Whilst in many instances this will amount to more red-tape, during the Fifth Government developmental benefits should start kicking in.

SARS happy

 Already, Finance Minister, Pravin Gordhan, has said tax revenue remains “buoyant” and commented that preliminary outcomes of revenue collection for the 2013/14 fiscal year the overall revenue collected by South African Revenue Service as of midnight on Monday March 31, was R899.7-billion.

At this stage, this is R0.7-billion more than the revised estimate in the 2014 Budget which may go some way to reducing the huge deficit that seems to put a frown of the faces of so many in the banking world.

Energy, health, education, finance and land reform will remain the subject of much scrutiny by ParlyReport in the coming months, plus meeting and establishing relationsipswith those in the new parliamentary structures.


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Women Empowerment Bill being powered through

Women  Equality Bill could pass on emotional ride….

Further debate took place in Parliament before the Bill was passed to the NCOP for concurrence on the Women Empowerment and Gender Equality Bill, the discussions centering mainly on the minister’s powers to investigate and call for the plans of government departments, state utilities and certain public entities, as yet undefined, to achieve the objectives set out in the Bill.

It appears from reports that there are still minor amendments to be made according to the NCOP and the only way to get the Bill passed would be to recall Parliament.

50% gender equality

The objectives of the Bill are stated as a 50% gender equality provision in all private and public entities within one year and failure to satisfy the minister on attempts to meet the objectives of the Bill, or provide evidence that success in that direction was a practical reality, could result in fines or even or even imprisonment being imposed at the minister’s discretion.

Opposition member, Helen Lamoela (DA), said she and her party failed to even understand why the department of women, children and people with disabilities, which had no budget to implement and police such legislation or had the capability or even legal knowledge to regulate for such matters, had tabled the Bill as the document before them had no hope in passing constitutional muster.

ANC members maintained that because women’s equity in “decision making processes” was not even being remotely achieved as far as meaningful participation in the economy, that this is why such radical moves were necessary.

Rural needs of women

When asked if there should be two Bills, one for the empowerment of rural women where traditional laws gave all the benefits of land and ownership of goods to men and another Bill deal with women in “decision making positions”, the ANC rejected such a proposal saying that women in general in South Africa had to be immediately brought into the mainstream on a holistic basis.

They said that as there was no apparent move on the part of either business or government to achieve this, the department believed that in terms of their mandate, such legislation was necessary.

More than just B-BBEE

The DA reminded the committee of the BUSA submission of the effect that such a decision would have on both foreign investment, and an already overburdened compliance sector of South African business. DA, IFP and FF+ members said they were determined not to walk out of the meetings but rather try and convince the ANC and chair of the committee that not only did the Bill have no constitutional rationale but was bad for South African investment programmes.

The proponents of the Bill had already agreed to exclude churches at a request of the ACDP. It appears that the Bill failed the Nedlac process. The Democratic Alliance has focused on the effect such legislation would have on the formation of political parties.

Male jobs at risk

Nobody it appears, as one commentator noted, has focused on the effect of male black employment, already under extreme pressure to provide family support.

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Parliament closes with many Bills outstanding

The last dash…..

Houses_of_Parliament_(Cape_Town)As the ANC put it so succinctly on their website, currently there are twenty five Bills before National Assembly (NA) committees; plus four returned to the NA from National Council Of Provinces (NCOP) for concurrence; plus three on the NA order paper for second reading debate; and eleven before NCOP committees. “We believe Parliament should give special attention to ensure they are passed into laws”, they said. Time clearly is of the essence.

Two weeks before Parliament closed therefore there were forty odd Bills which, in the normal process, should be passed before the elections so that the current government, who tabled them, can see finalisation of their intent.

SONA promises “radical” legislation

Parliament has now been through the critical period of the State of Nation Address during which President Zuma promised “more radical Bills with the coming of a new government”; a Budget which was neutral to the point of being understated and, now, a rush to get through a raft of legislation before the current session of Parliament ends.

The usual warning to forgive political rhetoric in the hectic period before elections is this time tempered by the concern that the “fast tracking” of legislation can lead to laws, and consequently regulations, that have either unintended consequences or are overlaid with the need to achieve political ends without regard to business consequences, or the need for free flow of foreign investment.

There are two schools of thought on this.  One is that South Africa must lead others in the fight to achieve both redress for the past and correct the imbalance between rich and poor. The other is that to achieve growth and create jobs, the private sector has to flourish and feel comfortable in its environment.

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Infrastructure Development Bill modified and passed

Minister responds on land issue….

ebrahim patelThe Infrastructure Development Bill recently tabled by Ebrahim Patel, minister of economic development, appears to have avoided major confrontation as a result of re-wording of the provisions it contained regarding expropriation of land for major projects, the Bill having originally granted the state the right to expropriate land where a development project, declared as a Special Infrastructure Project (SIP), was concerned.

The Bill was passed by the National assembly and recently went to the NCOP for concurrence. Recent reports indicate it was passed.

Most submissions criticising the Bill said that the new proposals completely overstepped the mark on the question of expropriation but minister Patel has now assured all parties that such expropriation, if it took place because of a SIP, would be in terms of existing legislation when it came to the acquisition of land needed.

PICC oversight will cost project

In terms of the Bill, each SIP is to have a steering committee which will put in place time frames; attempt to deal with regulatory delay challenges; address project management and ensure the coordinated issuing of permits and licences but the PICC budget for the particular SIP would have to be funded out of the departmental budgets or those of the state-owned companies responsible for managing a project.

The Bill also gives the stamp of approval to PICC, the body which has adopted the National Infrastructure Plan of 2012 that intends to “transform the SA economic landscape while simultaneously creating significant numbers of new jobs, and to strengthen the delivery of basic services by planning and developing enabling infrastructure that fosters economic growth.”

Expropriation to be as presently defined

But the Bill as introduced into Parliament overstepped the mark on the question of expropriation when it came to ensuring that a SIP became a national priority and the minister has indicated that a new cause has been drafted to make it clear that any expropriation required in terms of the strategic integrated projects will be carried out in accordance with the provisions of current legislation.

Minister Patel told parliamentarians that all thirty written submissions had been received and noted and the Infrastructure Development Bill had, as a result of these public hearings, strengthened the constitutionality of the work of PICC, reduced ambiguity on the subject of SIPs whilst ensuring that public consultation had led to transparency.

He said the Bill was important as it involved some R1-trillion on infrastructure since 2009 and the Bill in giving legal standing to the work of PICC was a “milestone in South Africa’s economic development”.

Environmental impact overlooked by Bill

Another complaint was that despite the fact that, if passed, the Bill would co-ordinate some of the biggest infrastructure projects in South Africa’s history, the provisions  make no reference to the need for infrastructure development to be environmentally sustainable other than a clause acknowledging that the SIPs will still need environmental authorisation under the National Environmental Management Act (NEMA).

South Africa has a comprehensive environmental impact assessment (EIA) regime and the department of water and environmental affairs, over the past five years, had spent time and parliamentary effort to improve, streamline and speed up EIA processes, the minimum period for such clearances going no faster than 300 days for clearance on EIAs as far as NEMA is concerned, under any circumstances, in the national interest.

The idea of PICC being allowed to reduce this environmental clearance to 250 days, or even shorter time frames for mega-projects, has the environmental world in a stir it seems, the shortening process, they say being impossible to manage to and which renders EIAs meaningless.

Environmentalists say that decisions about big projects that will affect the whole nation for generations to come must be made using comprehensive information about social and environmental impacts in compliance with NEMA and this takes time, the minimum possible being 300 days as envisaged by NEMA.

It seems that minster Patel has solved the land expropriation issue but has not satisfied the environmentalists who still complain that in its present form the Infrastructure Development Bill will not achieve its aim as far as fully integrated development in the national interest is concerned.

The Bill is headed for promulgation sometime in the mid year, and was passed before the end of the present session in an extended session of the NCOP.
Earlier articles on this subject:

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Equity quotas court ruling affects BEE legislation

Employment equity quotas as numbers only struck down….

On equity quotas, the Employment Equity Act, as anchor legislation, and thus the recently approved Employment Equity Amendment Bill, has come under query as a result of a recent case heard in the Supreme Court which has found the Act is in default where numerical formulas only are applied to racial quotas in order to comply with regulations.

In fact numerical quotas are illegal, said the Court. In dealing with case before it, the Court found that this had been applied, the appellant failing to achieve an appointment based the fact that racial quota targets had been applied in terms of black empowerment legislation.  The defendant was the minister of police.

The court further found the Act in contradiction of itself by being unfair if it regulated itself to achieve employment equity with just numbers, as distinct from “preferential treatment and numerical goals” being applied, as has been applied in government circles elsewhere.

A whole host of applications applied by many government departments would therefore seem to be in contravention of the Act, since many departments rigidly use number quotas to achieve equity targets across a wide range of the public service.

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Treasury proposals on debt control approved

Tough measures on debt approved by cabinet….

squeeze To counter what is feared in some quarters as a minor debt “bubble”, as occurred in the United States and set of a major run on banks, National Treasury have had approved by cabinet tough proposed measures to assist over-indebted households and prevent consumers from becoming over-indebted in future.

A number of ministers have supported Pravin Gordhan’s observations, stated in his Medium Term Budget Statement, that the curbing of reckless lending is a priority for government. Growing debt issues in middle to lower income groups has been an issue with rating agencies.

Over-debtedness the issue

Despite fierce opposition to a credit amnesty earlier, which was perceived as simply contributing to such a “bubble”, the measures that were approved by cabinet recently include an “immediate set of comprehensive steps” to tackle over-indebtedness in lower and middle income situations.

Such measures include insisting on affordability criteria in place for retail lenders and prohibiting reckless loans; ensuring that the provision of credit is suitable for each circumstance and reviewing National Credit Act pricing caps; there will be a “strengthening of regulation and enforcement to prevent unregistered credit providers and a review the regulatory framework for credit insurance policies.

The expression “controlling access to the payment system” was used.

Whole household approach considered

Government is also considering providing assistance to households labouring under a debt burden. No details emerged on this particular issue but some of the proposed measures included steps include reducing borrowers’ installment burdens; the setting up of voluntary debt relief measures within major lenders and regulating debt-collection firms.

Most importantly, employers will also be encouraged to investigate the legitimacy of all emolument attachment or garnishee orders in force against their employees. Treasury says such measures will be implemented within the public sector early next year; the department of trade and industry working with Treasury.

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Gigaba answers critics on infrastructure build

Minister appoints infrastructure manager…..

malusi gigabaIn final questions before Parliament closed, answers were supplied by minister of public enterprises, Malusi Gigaba, to a parliamentary question on the effectiveness of Eskom and Transnet to achieve their infrastructure-build programmes. The Minister replied that he had appointed of Chief Director: Project Oversight, to specifically handle such issues with an infrastructure projects manager.

The minister said that the department of public enterprises (DPE) has established the office and who will be putting in place “policies and systems to enhance the rigour of the DPE oversight of the build programme”.  This would include the establishment of an information technology-based reporting system which will highlight progress and risks relating to all SOC strategic projects.

The DPE is planning to establish a dedicated “projects office”.

The minister said he had also established an internal task team that is systematically reviewing the policy and regulatory environment relating to state owned entities “with the objective of making clear recommendations as to how the environment can become more supportive in relation to an SOC delivering on their strategic mandates, particularly regarding their investment programs”

DPE, he said, was working with a National Treasury infrastructure task team “that is busy with a diagnostic exercise that will inform the process of enhancing SOC balance sheet capacity.”

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Infrastructure Development Bill legislates for growth path

 New Infrastructure Bill gives muscle to PICC….

An Infrastructure Development Bill was tabled in Parliament during November 2013 just before Parliament closed which is the empowering document for the presidential office to realise the New Build programme for South Africa. The Bill is published for comment.

According to the cabinet statement released at the time, the bill will aim to:

•    Implement integrated projects of significance for South Africa and the region
•    Promote public-private partnership making use of private sector skills
•    Set up steering committees for each project
•    Put in place time frames for implementation of strategic integrated projects (SIP)
•    Address project management and regulatory delays challenges
•    Ensure coordinated issuing of permits and licences

The bill will also allow for the continued existence of the presidential infrastructure coordinating commission (PICC). The PICC was set up by cabinet in July 2011 to bring together the three spheres of government to drive increased levels of infrastructure development.

Kgalema Motlanthe, deputy Vice-President, said at time,  “PICC interventions are cross-cutting yet targeted, seeking to crowd-in investment and mobilise efforts. We are integrating and phasing investment plans across 18 Strategic Infrastructure Projects (SIPs) which have five core functions: to unlock opportunity, transform the economic landscape, create new jobs, strengthen the delivery of basic services and support the integration of African economies.”

The PICC document describes eighteen Strategic Integrated Projects (SIPs) which have been identified and approved to support economic development and address service delivery in the poorest provinces. The new bill also sets down the requirements for SIPs.

Each SIP comprises a large number of specific infrastructure components and programmes. Such infrastructure development is seen as a key jobs driver in the new growth path planned for the country.

The new Infrastructure Development Bill is thus the anchor document behind the presidential process, even to allow for the acquisition of land where an SIP, one of the sixteen, has  a necessity to acquire such.

The document sketches the integrated approach embarked upon to create an enabling environment for faster infrastructure development and contains key elements of the PICC plan.

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Reserve Bank briefs SA Parliament

Export or die, Marcus tells Parliament…

gillmarcusIn what she described as “a difficult international environment with the real possibility of outwards flows of capital”, Gill Marcus, bank governor of the Reserve Bank of SA, said lifting exports remained a key necessity to avoid the “turmoil in the financial markets”

Brian Kahn, adviser to the Reserve Bank, said that “South Africa’s continued fiscal deficits added to the need to reverse the trends which were developing in export side of SA’s financial affairs”  and with continued “tapering” in US domestic policy with no intention of the US, it seems, to provide its own stimulus, Reserve Bank could not see any raising of SA interest rates until 2015/6.

Exports had fallen by 7.6%, he showed, which measured against the SA deficit of around R19bn, South Africa was keenly attempting to build up its gold and foreign exchange reserve holdings, a recommendation which had come directly from the International Monetary Fund and which had been a monetary policy at the bank for some time at the Bank.

Emergent market possibilities

Marcus said that whilst growth in emerging markets was slowing, South Africa had look a lot more positive than most but with Brent crude oil process in the Middle East looking so volatile, the position for South Africa was rocky, tempered perhaps by some growth in domestic production but this was countered by a slowdown in domestic consumption.    Growth was needed at 5% to be of any recovery value but whilst the SA quarterly figure was 3%, the country was still looking at an annual growth of only 2% rising to 3.6% in the next two years.

Petrol prices particularly were “exerting inflationary pressure” and monetary policy at the bank had to be figured around the “fragile growth numbers and the upside risks of inflation”. Inflation patterns were slightly unusual in the last quarter, Kahn noted, but were expected to flatten out and remain in the 3-6% range.

Back to the jobs problem

Of extreme concern to SA Reserve Bank, Kahn said, was the slow employment growth figures, not even having reach pre-2008 figures. It was not an easy decision to make to decide on such issues as cutting imports by decree, since mostly this was being incurred by the current infrastructure build programme, so there was, he said, “only one route and this was to increase exports”.

Mining strikes and car strikes were not assisting in this process, was the comment from opposition MPs.
Refer to articles in this category

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Parliament gears for elections in South Africa

The last of the old order

national assemblyIt is a time of change in South Africa when its Parliament has to consider elections and when politics tends to take over the tiller on the ship and the various captains of the political parties call their followers together to make up their minds on their future; how to compete in the next election and what the pecking order will be in each party.

It is also a period of much posturing and dangerous economic rhetoric and, as a result, a whole lot of cliff hanging goes on in the area of foreign relations and the banking world. Hopefully countries outside our borders will ignore most of what is said on the basis of the fact that this is exactly the same that happens in their own countries at election time, should they be democratic institutions of course.

So, for a while over the Christmas period and leading up to it, Parliament is forgotten.

Party conferences all set to chose

At this moment, parliamentarians are now thinking only of the part they will play in various political conferences and the newspapers now take with extraordinary headlines as the various new personalities emerge, say vote catching things and personality issues emerge, such as the Thuli Madonasela matter, which involve in-fighting and posturing.

Meanwhile, minister’s lose interest in governing and government departments just soldier on, trying to meet their third quarter budget targets for the last budget of the old government. Watching minister Joemat Petersen address Parliament just recently, one realizes that ministers do not really care if people read newspapers or not.

One more hurdle

In South Africa, we shall see little change in January/February 2014 in Parliament with the same 400 parliamentarians easing their way back into the seats of the National Assembly and the 90 into their seats in the National Council of Provinces, in the knowledge that they know at least where they stand with their own parties but not with the electorate.

The last parliamentary session of the expiring government which gets going for earnest in early February is always an odd one, as the parliamentary machine tries to clear all legislation through Parliament, bearing in mind that the governing party will put fast-tracking emphasis any legislation that gets votes and debate endlessly that which does not.

It is the new government after April that will have the thorny job of sorting out some of the most contentious issues issues, mostly on energy, environment and black empowerment, introducing themselves to the existing government departments working on the last mandates provided.

Hot issues

Sadly some of the most serious issues such as the mess in home affairs; the lack of getting anywhere on education; the inactivity of human settlements and the vacuum in health will take much longer that even one more four-year period of government to sort out, so much of this will be put on the side burner, as it were, in a political sense.

Nobody will want to discuss these subjects before the elections much other than answer embarrassing questions put the ministers in the question and answer system, which again we shall monitor.

Overwhelming backlog of legislation

Meanwhile there is an overwhelming backlog of promised legislation on all issues in the pipeline as South Africa heads towards the most important budget statement it has ever had in the light of global economic tensions.

Tracking and monitoring the last session in Parliament will be a mighty challenge – that period being from the end of January until whenever the election is declared – and establishing what is stormed through and on what basis, and what issues are carried forward for possible new chairpersons of parliamentary portfolio committees to tackle in a new government.

Working on the unlikely basis that not all chairpersons of the parliamentary portfolio committees will necessarily be ANC but that there will be a considerable number of changes in what members serve on what committees in the future, their exit statements from the committees will be interesting.

Furthermore, what global financial situation faces the last parliamentary situation in January/February before the budget provides much food for thought.

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Lock in at Parliament with budget speech

Gordhan Pravin with limited choices…

pravin gordhanRarely does a medium-term budget statement  in Parliament attract the kind of attention as has the current speech by South African finance minister, Gordhan Pravin.

He has been in a most difficult position. He is in fact juggling with the country’s “twin peaks” budget deficit numbers in order to come up with something that does not surrender the nation to movement down to a much lower position amongst the coterie of developing and emerging economies.

To amplify on the importance of what he says and how the newspapers and news agencies – and therefore world trading markets – depend on timeous information on this speech and perhaps it is worth pausing to note how the system in Parliament works.

Lock in part of parliamentary process

At a defined time a few hours in the morning preceding the speech that afternoon, all accredited financial journalists and those associated with news dissemination, gather in an allocated parliamentary meeting room and security is, to use the American phrase, “locked down”.  The doors are actually locked.

Even cell phones, i-phones, satellite phones and any form of communication device that has been invented since Graham Bell first telephoned anybody, has to be surrendered to parliamentary officials.      At that point round about 11.00am or mid-day, everybody gets to see the speech to be made by the finance minister Gordhan Pravin, scheduled for 15.00hrs, the same day.

This gives all those in the “lock in” the few hours needed to disseminate, consider and write what they wish to communicate on the budget itself, at that point the media being the only members of the public, especially the financial markets (and the rating agencies), to have any knowledge of what is to be said. There are no wi-fi facilities for laptops.

As the minister speaks……

At precisely the same time as the minister utters his first words in the House reading the Medium Term Budget speech, the doors are unlocked, cell phones returned, all journalists and media may release their material to the markets and well before the minister has finished his speech, Reuters, et al, have released their statements to the markets.

All of this, however utterly childish it may seem at the time, gives an indication of how important budget speeches are and the value of the message that is sent by the accumulated force of financial journalism – this particular budget speech being a sensitive one.

Of course, all would hope that in a perfect world minister Gordhan puts a freeze on public service pay packets for two years; announces further massive infrastructure spends with international funds for education, road and harbours; offers soft incentives to encourage exports with a weak rand and speed up the National Development Plan with ideas to counter the US resurgence. But all of this is unlikely.

Certainly on the left

ParlyReport is not a newspaper, so we confine our observations to monitoring government plans, department by department, in next issues but it is worth noting that finance minister Gordhan, himself a committed socialist and dealing with a cabinet that includes many a communist and certainly a number of trade unionists, will walk the tightrope with an election coming and votes needing to be collected, especially in the Northern Cape and Gauteng.

Our guess is that minister Gordhan will be forced to “talk the talk”, not “walk the talk”, talking his way through this one with South Africa in the grip of sluggish economic growth and an election coming. We should not expect too much from this speech other than bravery and it is hoped that minister Gordhan will resist pressure from the unions.

Our report therefore now relies upon the mundane and the “inside track” as usual and we await, like all, the results…….  although attending the “lock in” is an enjoyable process of watching the parliamentary system working and the financial markets re-acting.

Headlines to our clients this week were:

•    Codes of Practice given one year installation period
•    Nuclear stakeholders meeting avoids objections
•    Intellectual Property Bill aimed at medical patents
•    Shale gas regulations out for comment
•    Home Affairs in the mire
•    PetroSA keeps them all guessing
•    Minister of Finance tables Bill at halfway year budget
•    Central Energy Fund emerges from the shadows
•    Marcus steadies the ship
•    Land rights takes another step with new Bill
•    Department of energy reports for the year

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