Tag Archive | BUSA

Lumka Yengeni

National minimum wage hearings completed

Labour committee to get consolidated report…..

ncop

 

In the light of the fact that any legislation to be considered on the subject of a national minimum wage would involve all undertakings on a national basis and a major cross section of its citizenry, Lumka Yengeni, chairperson of the parliamentary portfolio committee on labour, finalised the provincial stage of her hearings.  Localised hearings were held in the Northern provinces last year and now in the balance of provinces after Parliament re-assembled.

The reason for this laborious process is that any such labour legislation would come under section 76 of the Constitution, which demands that debate and approval is not only at national level within the National Assembly (NA) but also with the concurrence of the relevant select committee of the National Council of Provinces (NCOP).

Hearing the people……

Such legislation has to have the approval of each of the nine provincial legislatures and such mandates are passed back to the NCOP and have to be found in tandem with any NA approval.   Yengeni is therefore sounding out the market place, as it were, for the idea of a national minimum wage

Whether it would require a separate Bill or an amendment to the LRA is a premature thought at this stage, probably the former in the light that it would need another commission, another departmental structure, probably a tribunal, enforceable laws with penalties and very specific regulations.

ANC seems set on changes

BUSA, Chamber of Mines, labour brokers, Agri-SA and others have already made submissions on a national basis before Parliament closed and the extraordinary thing was that a parliamentary committee should have taken upon itself to debate the whole issue just before meetings on the same subject scheduled by Deputy President, Cyril Ramaphosa.

Nevertheless, Agri-SA, in responding from one of the most problematic perspectives, told parliamentarians that a minimum wage set at a higher level than at present as part of a national application would result in a “considerable number of structural changes within the farming industry to accommodate what would undoubtedly be a call for higher wages in many spheres at many different levels of training and expertise.”

They warned that “to adjust and maintain their competitiveness and profitability” such a policy would be characterised by the shedding of jobs, increased mechanisation and the consolidation of farming units” – as had happened in the past they said.

FAWU zeroes in on agric

Food and Allied Workers Union said that any comparison to the minimum wage in nearby countries “was an insult” and said that that South African farmers on the whole were paying “poverty wages”. The cost of food to poorer families became a major debating area during the hearings, although there seemed to be tacit acceptance that the issue was to become an accepted fact on the labour horizon.

During the hearings recently in Gauteng, COSATU now seems to be suggesting remuneration somewhere in the area of R7,000 per month, submissions also coming from major industrial players in South Africa’s heavy industry sector. COSATU comments after the hearings where finally completed and in interview seemed to come “poker style” to an admittance that a minimum to them was seen at about R4,500.

Other articles in this category or as background
Agri-SA gives views on minimum wage – ParlyReportSA
Parliament debates national minimum wage – ParlyReportSA
Labour committee ignores strikes – ParlyReportSA

 

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Lumka Yengeni

Parliament debates national minimum wage

Sector views on national minimum wage ….

editorial …  Feisty or not, Lumka Yengeni of the parliamentary portfolio committee on labour certainly knows how to advance her career. Whether all her recent parliamentary activity is in line with what Lithuli House wants one never knows but whatever she does seems to attract attention.

The recent hearings on the possibility of a national minimum wage (NMW), which the ANC has stated as a policy imperative, caught most by surprise by the wide ranging topics brought up in debate.  Lumka Yengeni seems to have latched on to ANC policy and summonsed many parties to Parliament to give their views on the subject, including BUSA, the Chamber of Mines and Agri-SA.   Invited to the debates in many cases were also the appropriate union affiliates to that particular sector

Reports on the consequent debates are with clients and will be posted on our website in a fortnight’s time, since immediacy is the purpose of our reports to them.

Maximum pressure for NMW

 The unusual thing about these meetings, as South Africa pivots on the edge of economic direction, is that Parliament should take it upon itself to debate the whole issue of the national minimum wage when the subject also has been scheduled by Deputy President, Cyril Ramaphosa  for a national gathering.

Whether this is naiveté on the part of Lumka Yengeni or plain political upstaging only those close to her will know but the experience of the apple farmers in Elgin over labour broking will testify to the fact that she knows the art of political theatre.

Perhaps, on such a difficult subject, forewarned is forearmed.

Other reports in this category

http://parlyreportsa.co.za//labour/labour-committee-turns-away-strikes/

http://parlyreportsa.co.za//labour/labour-relations-act-changes-passed/

 

 

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Customs Duty Bill cuts out inland ports

Customs Duty Bill allows only for coastal ports…..

city deepIn dealing with the Customs Duty Bill, and its two tandem enabling Bills,  and talking to representatives of SARS and those advising them, there can be no doubt that SARS is working on the basis that current losses to the fiscus due to fraud and avoidance on matters regarding customs duty must be in the region of R4bn to R5bn, based on conservative estimating.  A weak link in the customs collection chain is cited as the line to City Deep and the terminal itself.

No official statement on an estimated figure however can be given, such issues are unproven and unquantifiable, they said, but if current SARS customs revenue is estimated this year at R50bn then a simple loss of 10% will produce such figures.

The massive Bill, drafted purely by SARS, clearly defines that the customs system in South Africa will change and customs clearance will have to be at a coastal port and that the present system of allowing uncleared goods moving to an inland port will cease.

Treasury going ahead

In responding to all the points made during public hearings, Kosi Louw, chief legal advisor, SARS, stated that it will proceed with its tabling on the basis that clear procedures for all stages of the supply chain are set out, monitoring of all stages are more easily monitored by SARS and that the increase in penalties are necessary.

A major concession allowed made by SARS is to include a “fallback” clause; in other words, if the new system imposed by SARS is found not to work or should fail in practice, then SARS would allow automatic reversal to the original situation; i.e. to allow inland ports. Kosi Louw said, however, that he was convinced that the new system would not only work but save the country a lot of money.

BUSA,JCCI opinions rejected

Most of the points raised by BUSA and JCCI were rejected by SARS in the light of the fact that the national interests that arose simply because of the vast amounts of revenue that were being lost to the fiscus. The new Bill brought about few changes in the trading positions of both importer and exporter, they said. 

SARS is insistent that it does not wish to close inland ports, stop container flow, congest the ports or discourage the use of rail or disrupt legitimate trade. However, now that so much digital flow of information is in the form of electronic transmissions rather than paperwork, it is time for SARS to undertake better risk assessments, Louw said, asking for more information that can be easily provided and to provide earlier information to traders and stakeholders so as to plan their supply chains, working on a basis of 1-2% interventions representing investigations.

Goods cannot continue to move purely on the basis of a manifest to an inland port, such manifest not containing tariff, value and origin to determine risk, they said. Thus with no manifest, the goods must in future be cleared by the importer at coastal locations and goods imported by them, not the supplier. Liability therefore becomes an importer’s issue as the ship docks.

Importers will have to pay from port

On the JCCI issues raised that traders will have to change their contracts of sale; sellers will be reluctant to sell goods under the new terms; importers will be badly affected and that delays and congestion will occur at ports, SARS has rejected all these points.

On the issue of CIF determinations, supply contracts and bills of lading, SARS confirmed that they had taken legal advice from Prof, Eiselen, a trade law expert; a maritime law expert, Adv Pammenter SC and Adv, Joubert SC, a customs law expert and no process of importation will be affected at law, they were advised.

A problem was ‘grouping” where say five parties shared a container to import goods where they could not fill a container alone. All five must submit customs clearance forms at coastal points and if one member of the grouping had a problem, then the whole container would be stopped, said Kosie Louw but this only represented 1% of all containers used, they noted.

WTO isues raised

On the issue that JCCI raised that the new Bill was in contravention of World Trade Organisation (WTO) treaties, SARS disagreed, They were party to the discussions with WTO and it is quite clear, they said, that any importation was subjected to national regulations imposed.

The moves in South Africa followed similar moves in Canada, the UK and Russia where specific information is now obtained. Where long distances by road and rail to inland bond points occur, enormous losses to the fiscus in those countries were occurring. The losses at City Deep, Johannesburg, are as high as 26%.

Penalties after three days

Three days are required for a clearance of goods that arrive by ship and penalties will arise after three days.

The implementation of such changes will be delayed by 12 months once the Bill is passed and “a clause will be inserted to allow for consideration of unintended consequences”. Freight forwarding associations and ship operators and their agents also supported the Bill, SARS said, as did Transnet.

In conclusion SARS said that they cannot allow the movement of goods to such a points as City Deep without proper information, such systems now being purely electronic moving from any manual paperwork.

In answer to questions, Louw said that customs control officers at the port no longer would make the decision whether or not to allow through a container. The containers themselves would be cleared or would not be cleared by the new electronic system that received the importer’s information, even interventions would be instructed by the system.

Under questioning, SARS repeated that the seller’s risk ceases at the point of loading the ship in a foreign port after CIF is paid. The only thing that will change is that there is no manifest to clear goods required but a new customs clearance procedure at point of landing by ship at the SA coast or at a border. The first stage of clearance will be in advance, or provisional, and a final release then issued.

SARS convinced that fiscus losses paramount

Finally, in answer to the question as to whether SARS felt that the Bill would damage in any way South Africa’s trade relations or trade figures, SARS denied that it would. It was “just a question of SARS getting better and smarter in the fight to raise more for the fiscus”. The whole system was predictable for all parties, Kosi Louw said, and all carriers have said it will make no difference to trade.

There was no change to the legal status of inland ports, SARS, said. Final rules and regulations can only be issued once the Bill under debate was passed but at this stage the Bill looks set for final approval. Refer previous article in this report.

There is no doubt that all three linked Custom Duty Bills will be passed before Parliament closes
Earlier articles on this subject:
http://parlyreportsa.co.za//energy/fueloilrenewables/illegal-diesel-coming-in-from-mozambique/
http://parlyreportsa.co.za//finance-economic/one-stop-border-post-with-mozambique-almost-there/

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New Customs Duty Bill opposed by BUSA

SARS customs duty bill to close inland ports…

portsharboursThe newly tabled  Customs Duty Bill, with its two enabling Bills, were the subject of  vehement objections from Johannesburg Chamber of Commerce (JCCI) and Business Unity SA (BUSA), who both led the charge against the SARS proposals tabled by National Treasury.

This was in the  in the form of the vehement objections to the Customs Duty Bill, the Customs and Excise Amendment Bill and the Customs Control Bill, which propose that the principle of inland ports be scrapped and all clearances for imported goods be conducted at SA coastal locations.

Nevertheless, the Bills were eventually passed before the present government ended after an extended session of the NCOP to provide concurrence.

JCCI said that this would not only upset SADC and sub-Saharan  importers but also cause unintended consequences such as the “death of such inland ports as City Deep in Johannesburg” aside from inconveniencing local importers generally.

They said that many importers having now to be responsible for the movement of goods up the Durban/Johannesburg corridor would switch from rail to road freight to complete the import journey, thus placing further strain on Durban /Johannesburg road systems.

Transnet to become nonviable

Such unintended consequences , it was felt by JCCI, whilst of no consequence to SARS who were obviously only interested in the current losses of tax revenues by evasion, illegal imports  and corruption would result in serious strain for existing importers and make Transnet targets impossible.

Also, they said in their submission, the moves would cause further congestions at coastal ports and that the SARS proposals were in conflict with normal practices allowed for by the WTO.

Currently, JCCI told parliamentarians, only 20% of imports were being received through the Durban/Johannesburg corridor destined for movement by Transnet, who were in the process of spending enormous sums of money on infrastructure and rolling stock to change this imbalance. Now was not the time to encourage more road freight, they said.

BUSA weighs in

BUSA said that such radical changes of insisting that the three day customs clearance required by importers at port of entry, if construed as coastal only, was an unacceptable arrangement and although two alternative options were offered by SARS, neither had been found to be acceptable.

It was the wrong time to make such changes, said BUSA, and SARS should re-consider its approach and new ways found to reduce their losses of revenue in duty.

Also BUSA complained of the high penalties proposed for late clearances of goods if the proposed three day notice was not met and that new approaches should be considered generally that incorporated and embraced the concepts declared by the minister of trade and industry who has stated he wants to increase South Africa’s sub-Saharan business.

The concept of removing City Deep as a customs clearance point was akin to changing a practice that had existed for 37 years, JCCI noted.

SARS unmoved by the arguments presented.

(SARS responses to these submissions is in a later story on this website)

Earlier articles on this subject:
http://parlyreportsa.co.za//energy/fueloilrenewables/illegal-diesel-coming-in-from-mozambique/
http://parlyreportsa.co.za//finance-economic/one-stop-border-post-with-mozambique-almost-there/

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Infrastructure Development Bill possibly to be altered

Infrastructure Development Bill gets SALGA, BUSA criticism….

The Infrastructure Development Bill, tabled in Parliament during November 2013 just before Parliament closed, has had three days of public hearings, the Bill being an empowerment document for the presidential office to realise the New Build programme for South Africa.

The Bill was published for comment and the hearings over three days represented by an early opening of parliamentary portfolio committee activity. The Bill was tabled by minister of economic development, Ebrahim Patel.

The majority of those presenting before Parliament with submissions regarding the Bill, mainly state utilities and entities such as the Institute of Municipal Engineers, pointed to what many realise is the actual crisis facing South Africa – that of lack of skills at local government level and a lacking of will to get projects even underway, let alone completed, being the main hurdles.

Objectives of Bill

According to the cabinet statement released at the time, the Bill aims 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 pledges support for the Presidential Coordinating commission (PICC) set up by cabinet in July 2011 to bring together the three spheres of government to drive increased levels of infrastructure development. A number of bodies presenting gave examples of the complete lacking of any knowledge of the maintenance of national assets, particularly an infrastructure project was completed and handed over.

SIPS are to be driven by PICC

PICC interventions will be carried out, it is planned and a number of the presentations to Parliament will go to the PICC as examples of where cross-cutting and mobilisation across all levels of government is badly needed with specific regard to the 18 Strategic Infrastructure Projects (SIPs) identified by the Commission.

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 as far as allowing for the acquisition of land where an SIP may require this option.

Environmental issues “ignored”

In contrast, the constitutionality of, and the need for the Infrastructure Development Bill was questioned in a presentation by the South African Local Government Association (SALGA) who clearly felt “toes were being trodden upon”. University of KwaZulu Natal warned that a clause in the new Bill imposing that any delay process that goes over 250 days will be over-ridden was totally discounted on the basis that an environmental impact assessment cannot be completed within 300 days.

Also Business Unity South Africa (Busa) whilst agreeing with the whole idea of the need to get projects going expressed the view that rather than trying to ‘cut through’ through bureaucratic problems that might be causing delays, the new Bill may add yet another layer of red tape on government project managers and confuse the roles and responsibilities of the three spheres of government.

They cautioned that the department of economic development, with all the goodwill in the world, may add confusion and further congestion and that no amount of legislation could add value to the actual problem; lack of skills at local government level and an inability of one department to talk to another.

Bill driven by ANC to empower PICC

Lack of consultation in the preparation of the Bill was also cited as having been insufficient on the bill but the Bill is known to have the support of the ANC, service delivery and infrastructure build projects that create jobs being their manifesto promise.

COSATU, Telkom and Transnet were all in favour of the Bill in broad principle but most expressed concern that the Bill might add rather than detract from bureaucratic delays and great care that this did not happen, they said.

Telkom also raised queries with regard to the granting of rights to PICC to expropriate land but minister Ebrahim Patel, minister of economic development who was present for most of the submissions, chose not to debate the issue presumably because such matters were separately under debate with other legislation.

There was little disagreement amongst opposition members that minister Patel would have to make considerable revisions to the Bill as presented, particularly on the issue of land acquisition in terms of existing law.

Further reports on this Bill in later meetings have been published for clients and will be posted on this website in due course
Previous articles on this subject
http://parlyreportsa.co.za//cabinetpresidential/infrastructure-development-bill-legislates-growth-path/
http://parlyreportsa.co.za//cabinetpresidential/infrastructure-development-bill-to-cut-red-tape-2/
http://parlyreportsa.co.za//energy/global-shockwaves-must-not-stop-infrastructure-programme/
http://parlyreportsa.co.za//uncategorized/president-zuma-calls-for-2012-as-year-of-infrastructure/

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Discussion Paper Next Step On Carbon Tax

Finance Minister Pravin Gordhan is reported to have told lawmakers in Cape Town that a revised carbon tax policy paper is definitely due sometime in the course of 2012 and that government has agreed in principle to the need to price carbon emissions and on the phasing in of a tax based on such a pricing structure.

According to reports, BUSA has, in the meanwhile, called upon the cabinet for relevant ministers to engage further on a framework before implementing any such proposals on a carbon tax, especially given recent electricity price hikes and rising costs to the consumer.

Similarly, the Manufacturing Circle said it “would welcome the opportunity for engagement”, with the caveat that a carbon tax, if not applied suitably, would “hurt manufacturing and jobs”.

National Treasury has argued previously that such a tax was necessary to create incentives for the public and industry to change behaviour and to encourage cleaner-energy technology and energy-efficiency amongst the public.

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Uncertainty is the only certainty in 2012: BUSA

In presenting an “economic perspective” on 2012 – presented one week before the Budget- Prof. Raymond Parsons of BUSA told the NA economic committee in Parliament that the “only certainty in 2012 was the continued uncertainty in the global economy.”

He said the situation in the Eurozone highlighted how continued procrastination by economic leaders led to all kinds of uncertainty and therefore in the case of South Africa, the year of 2012 had to be “a year of implementation” and delivery.

High interest rates in South Africa had led to an influx of foreign capital in 2011, he said, keeping the rand strong but, in contrast its strength and volatility had to some extent hampered exports.

Parsons said that BUSA saw South Africa lagging behind developing economies in 2012 and it was not helping that the country had dropped its positioning on the global table of countries with a good record “of ease of doing business”.

BUSA had also noted a recent Grant Thornton survey, Parsons said, that recorded that “over-regulation and red tape were the “biggest constraints to expansion in South Africa” and he believed, like BUSA and many respected business groupings with him, that SMMEs are the best hope in such times for job creation and innovation.

South Africa had to boost its SMME activity since “80% of new jobs could come from this direction.”   He told parliamentarians that “South Africa’s fiscal space was shrinking” and that focus had to be on “structural factors” that would give economic returns in the long run.

Balancing welfare payments against a limited tax base would a major problem in the coming year, Parsons said, and an outcome of the nationalisation debate was critical he said in order to settle down an unsure foreign investing market.

As growth would be insufficient to meet socio-economic challenges, Parsons commented that co-operation with the private sector became all that more important in 2012.

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