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Parliamentary Overview 12 June 2019….

 

Changing the guard…  

Plenty of note for business has happened legislatively during the parliamentary recess but perhaps none so important as the re-structuring of Cabinet. As a result  there will be a change in the appropriate portfolio committees to reflect any changes and a consequent shift in portfolio responsibility for various Bills held over from the previous Parliament.    In the areas of energy, trade and industry and communications this will be particularly interesting of who gets to be the chairperson in the light of differences emerging within ANC structures.

Parliament will choose its portfolio committee chairpersons for the National Assembly and select committee chairpersons for the National Council of Provinces on 27th June, two days after the State of Nation Address ANC party chairpersons.  These appointments reflect how a government governs on policy and legislation. Through the chairpersons.

Read more..Parliamentary overview 12 June 2019

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Gigaba pushes for control of border posts

Treasury, Home Affairs at odds on customs issues

Parliament will be debating in the new session in August the Border Management Authority Bill.   What the Bill proposes is a single state entity known as the Border Management Authority (BMA) to oversee all aspects of the movement in the import/export of goods and to control movement of all persons either leaving or entering the country.

The idea is that all border law enforcement functions along South Africa’s fragmented 5,000 kilometres of border will be the responsibility of the BMA.   Read More……    Border Management Bill July 2018 PDF

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Border Management Authority around the corner

SARS role at border posts being clarified ….

In adopting the Border Management Authority (BMA) Bill, Parliament’s Portfolio Committee on Home Affairs agreed with a wording that at all future one-stop border posts, managed and administered by the envisaged agency and reporting to Department of Home Affairs (DHA), were to “facilitate” the collection of customs revenue and fines by SARS staff present.

However, on voting at the time of the meeting, Opposition members would not join in on the adoption of the Bill until the word “facilitate” was more clearly defined and the matter of how SARS would collect and staff a border post was resolved.

Haniff Hoosen, the DA’s Shadow Minister of Economic Development said that whilst they supported the Bill in general and its intentions, they also supported the view of National Treasury that the SARS value chain could not be put at risk until Treasury was satisfied on all points regarding their ability to collect duty on goods and how.

Keeping track

Most customs duty on goods arriving at border controls had already been paid in advance, parliamentarians were told; only 10% being physically collected at SA borders when goods were cleared.

However, with revenue targets very tight under current circumstances both SARS and Treasury have been adamant that it must be a SARS employee who collects any funds at border controls and the same to ensure that advance funds have indeed been paid into the SARS system.

The Bill, which enables the formation of the border authority itself, originally stated that it allowed for the “transfer, assignment and designation of law enforcement functions on the country’s borders and at points of entry to this agency.”

Long road

It was the broad nature of transferring the responsibility customs of collection from SARS to the agency that caused Treasury to block any further progress of the Bill through Parliament, much to the frustration of past Home Affairs Minister, Malusi Gigaba.   It has been two years since the Bill was first published for comment.

DHA have maintained throughout that their objective is to gain tighter control on immigration and improve trading and movement of goods internationally but Treasury has constantly insisted that customs monies and payments fall under their aegis. The relationships between custom duty paid on goods before arrival at a border to Reserve Bank and that which must be paid in passage, or from a bonded warehouse was not a typical DHA task, they said.

Breakthrough

It was eventually agreed by DHA that SARS officials must be taken aboard into the proposed structure and any duties or fines would go direct to SARS and not via the new agency to be created or DHA.

This was considered a major concession on the part of DHA in the light of their 5-year plan to create “one stop” border posts with common warehouses shared by any two countries at control points and run by one single agency. More efficient immigration and better policing at borders with improving passage of goods was their stated aim.

Already one pilot “one stop border post”, or OSBP, has been established by DHA at the main Mozambique border post by mixing SAPS, DHA and SARS functions, as previously reported.

To enable the current Bill, an MOU has been established with SAPS has allowed for the agency to run policing of SA borders in the future but Treasury subsequently baulked at the idea of a similar MOU with SARS regarding collection of customs dues and the ability to levy fines.
Bill adopted

At the last meeting of the relevant committee, Chairperson of the PC Committee on Home Affairs, Lemias Mashile (ANC) noted that in adopting the Bill by majority vote and not by total consensus, this meant the issue could be raised again in the National Council of Provinces when the Bill went for consensus by the NCOP.

Objectives

The Agency’s objectives stated in the Bill include the management of the movement of people crossing South African borders and putting in place “an enabling environment to boost legitimate trade.”

The Agency would also be empowered to co-ordinate activities with other relevant state bodies and will also set up an inter-ministerial committee to handle departmental cross-cutting issues, a border technical committee and an advisory committee, it was said.

Mozambique border

As far as the OSBP established at the Mozambique border was concerned, an original document of intention was signed in September 2007 by both countries. Consensus on all issues was reached between the two covering all the departments affected by cross-border matters.

Parliament was told at the time that the benefit of an OSBP was that goods would be inspected and cleared by the authorities of both countries with only one stop, which would encourage trade. In any country, he explained, there had to be two warehouses established, both bonded and state warehouses.

Bonded and State warehouses

Bonded warehouses which were privately managed and licensed subject to certain conditions, were to allow imported goods to be stored temporarily to defer the payment of customs duties.

Duties and taxes were suspended for an approved period – generally two years but these had to be paid before the goods entered the market or were exported, MPs were told. The licensee bore full responsibility for the duty and taxes payable on the goods.

State warehouses on the other hand, SARS said at the time, were managed by SARS for the safekeeping of uncleared, seized or abandoned goods. They provided a secure environment for the storage of goods in which the State had an interest. Counterfeit and dangerous or hazardous goods were moved to specialised warehouses.

Slow process

MPs noted that it had taken over six years for the Mozambique OSBP to be finalised. SARS said there were many ramifications at international law but added two discussions with Zimbabwe for the same idea had now taken place. It was hoped it would take less time to reach an agreement as lessons had been learnt with the Mozambican experience.

On evasion of and tax, SARS said in answer to a question that losses obviously occurred through customs avoidance and evasion, so it was consequently it was difficult to provide an overall figure on customs duty not being paid, as evasion was evasion. Smuggling of goods such as narcotics, or copper, which could only be quantified based on what had been seized.

The same applied to the Beit Bridge border with Zimbabwe where cigarette smuggling was of serious concern and through Botswana.

In general, it now seems that Home Affairs is to adopt an overall principle of what was referred to as having one set of common warehouses for one-stop declaration, search, VAT payment and vehicle movement with a SARS presence involving one common process for both countries subject to a final wording on the SARS issue before the Bill is submitted for signature.

Previous articles on category subject
Border Authority to get grip on immigration – ParlyReportSA
Mozambique One Stop Border Post almost there – ParlyReportSA

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Liquor licensing may have impractible conditions

DTI gets tough with age limits

...sent to clients 17 Oct…..   In what will be a tough ask, Minister of Trade and Industry, Robliqour-store Davies has proposed a number of changes to the National Liquor Act, the most contentious being to raise the legal minimum age for purchasing liquor from 18 to 21 years of age. The call for public comment on the draft National Liquor Amendment Bill as gazetted closed on 30 October.

The Department and Trade and Industry (DTI), who deal with liquor licensing at a national level, state that South Africa has globally the worst figures for alcohol related accidents and anti-social incidents involving liquor abuse.

Drastic steps had to be taken to gain control of alcohol related injuries, illnesses and abusive behaviour that were costing the state some R40bn a year, the Minister said.

Younger age groups

The Bill focuses specifically on youth since DTI maintains that alcohol abuse specifically damages the development of the brain making youth vulnerable. Liquor advertising aimed specifically at young persons will be prohibited under the Act and revised rules set down on broadcast times and content. Advertising billboards aimed at youth will be banned from high density urban areas.

Minister Davies called for “robust public engagement on the issues raised in the Bill” as it dealt with matters “that are of significance to South African society.” He noted that South Africans consume alcohol related products at double the world average rate.

On the question of the age threshold proposed in the draft Bill is a minimum purchasing age, not as has been widely reported a “minimum drinking age”. The onus of establishing age will fall upon the supplier who must take “reasonable steps to establish age” when dealing with a young purchaser.

Pressure point

A civil liability will now fall upon the manufacturers and suppliers as well who knowingly breach the new regulations, Minister Davies said, believing that this was the only way to get the problem understood and the new rules adhered to.

sab-youth-beer-adThe draft Bill states that responsibility will also fall upon the seller not only not to supply liquor to a person visibly under the influence of alcohol but that the seller could be in addition asked to show reason why they should not bear costs for damage incurred as a result of a subsequent accident involving that person who made the purchase.

On the problem of community issues, such as tackling foetal alcohol syndrome which is considerably worse in South Africa than elsewhere in the world and alcohol related crime, the onus of proof will shift not only to a supplier but also to manufacturers to show that reasonable steps were taken to ensure that liquor is not sold to illegal or unlicensed outlets. Which brings up the issue of liquor licences.

Distance from community

Licensing is a provincial matter and there are a number of changes that the amending Bill police-raidwill make to the anchor Act which will have to be abided by. Particularly notable is the proposal that licences cannot be granted to an outlet less than 500 metres from any school, recreation facilities and places of worship.

Provinces are stated as “having an obligation” to be far stricter in granting licences in highly urbanised areas, giving due regard for the need for stricter business hours and for the need to deal with noise pollution in stressful living conditions.

Previous articles on category subject
New health regulations in place soon: DoH – ParlyReportSA
Licensing of Businesses Bill re-emerges – ParlyReportSA
Medicines Bill : focus on foodstuffs – ParlyReportSA

Posted in Justice, constitutional, Security,police,defence, Special Recent Posts, Trade & Industry, Transport0 Comments

Green Paper on rail transport published

sent to clients 12 October…..

National rail policy mapped out…..

metrorailA Green Paper on South Africa’s National Rail Policy has been published for comment naming the country’s challenges in rail transportation, recommending policy direction and containing broad proposals for the way forward to develop the current rail network.

Gazetted recently, the Green Paper represents work commenced in 2010 and says the document “Seeks to revitalise the local railway industry by means of strategic policy interventions”.   Not only is freight rail included in the proposals but long-distance rail passenger and localised commuter services.

Road dominates at a cost

Minister Peters said in a media statement at the time that railways in South Africa had operated for almost more than a century without a proper overarching policy framework to guide development.   “The railway line and its railway stations have played a pivotal role in the day-to-day lives of communities, especially those in the rural areas, but as far as freight is concerned, 89% of freight is still transported by road and the future of commuter rail conducted on an ad hoc basis”.

roadsThe emphasis of road transport is costing the country millions of rands annually in road maintenance, money that could have been well spent on developing freight rail, she said.

The process

Cabinet last month approved the release of the Green Paper for public consultation. When all is finished, a final White Paper on National Rail Policy will be released to guide and direct development of infrastructure and develop more modern commuter systems. A National Rail Act will be the final result of the White Paper.

These interventions, according to Minister Peters, will reposition both passenger and freight rail for inherent competitiveness by “exploiting rail’s genetic technologies to increase axle load, speed, and train length.“

Lining things up

railway lineWider-gauge technologies are on the cards.   The government has said it is converting 20 000km of track to standard gauge from the narrower Cape gauge. This would bring the network in line with an African Union resolution on the subject and at the same time would boost capacity of goods carried, with longer trains and a reduction in transportation costs.

With both passenger and freight rail falling within its scope, part of the envisaged national transport policy includes involvement by the department of transport (DOT) in the local government sphere to create capabilities to move more passengers by rail with infrastructure, more rail line and technical assistance.

Creating local commuter rail

Secondly, once the localised capacity is in place, DOT says it will be able to appropriate subsidies for urban commuter rail, the management of the mini-systems then being devolved to municipalities themselves.

The Green Paper talks of investment and funding, private sector participation, inter-connection with the sub-Continent, skills planning, investment strategies and the start of a regulatory system.     Part of the master plan at operations level would include a branch line strategy with the private sector involved to improve connection between cities with towns and industrial areas.

Other articles in this category or as background

Transnet improves on road to rail switch – ParlyReportSA

South Africa remains without rail plan – ParlyReportSA

Minister comments on taxi and rail plans – ParlyReportSA

PRASA gets its rail commuter plan started – ParlyReport

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South Africa remains without rail plan

 Feature article….

Minister Peters fails on rail policy…

dipou Peters2In a written reply to Parliament on the whereabouts of the promised Green Paper on rail policy, transport minister Dipuo Peters told her questioners that such a document which has the intention of outlining South Africa’s rail policy was to be presented to cabinet in November. GCIS statements for cabinet meetings for November and the final cabinet statement in December 2014 made no reference to any such submission having been made – alternatively, the minister might have failed to have it put on the agenda. The country therefore went into Christmas recess once again without an established government policy on both freight and passenger rail transport matters, worrying both industrialists, investors and, not the least, built environment planners.

Just talking together

A draft Green Paper was first submitted to cabinet a year ago but cabinet instructed that more consultation on the proposals was necessary, particularly interchange between the transport and public enterprises departments. The portfolio committee on transport stated that policy on freight rail upgrading and infrastructure development was unclear, plans for commuter and long-distance passenger services confused and no clear picture had emerged on Transnet’s promised policy of structural re-organisation. Subsequent to this, the department set up a national rail policy steering committee to oversee the consultation process and introduce the required changes to policy. It has also divested itself of a number of non-core assets but no clear picture has emerged in statements on the promised policy of giving direction on the privatisation of branch lines.

Since time began…

According to the minister at the time, cabinet’s concerns had also involved the adoption of a standard gauge, private sector participation and economic regulation.  Subsequently, DoT indicated that standard gauge has been selected as the most suitable gauge for the South African rail network and as a result a final revised Green Paper was tabled before the steering committee in October 2014. Nothing has emerged. In the absence of any agreed policy, particularly to meet the proposed idea of rail freight re-assuming its dominant role over road transport in the light of the deteriorating national road picture, a number of developments have indeed taken place with regard to the purchase of diesel and electric train stock, signal systems upgrades and station re-building and passenger coach rolling stock manufacture. Nevertheless, no clear picture has emerged on the road ahead with regard to the freight/road picture, branch line privatisation, commencement dates for full long distance passenger services nor satisfactory plans and targets expressed on domestic commuter rail services.

All said before

Jeremy Cronin, when deputy transport minister, told Parliament in April 2011 that by establishing a local manufacturing base for the new rolling stock, benefits would ensue by creating a substantial number of local jobs. He added that as a result of the redevelopment of rail engineering capacity, skills that have been lost over decades of underinvestment in the local rail engineering industry would be recovered. The then deputy minister also said, “We are currently (2011) in the Green Paper phase with the primary objective of preparing the way for effective stake holder engagement. We are poised to reverse the decline in our critical rail sector that began in the mid-1970s and gathered pace in the late 1980’s.” In April 2015 therefore the country will be the fourth year of waiting for South Africa to outline its rail policy, “a system critically in decline” according to minister Cronin.

Recent update from Maties

A few months ago, a most important paper on rail transport, now in the in the hands of DoT, was published and out into the public domain by Dr Jan Havenga, director: centre for supply chain management, department of logistics, Stellenbosch University, who led a team of transport logistics experts to complete this erudite and informed report. The report is entitled “South Africa’s freight rail reform: a demand-driven perspective” and opens with a definition of government’s responsibilities in rail transport matters. “The role of the government is, primarily, to facilitate the development of a long-term logistics strategy that optimally equilibrates demand and supply through ‘anticipation’ of the market character.” “The definition of a national network of road and rail infrastructure and their intermodal connections will flow from this, presupposing neutrality across modes by taking full account of all relevant social, environmental, economic and land-use factors.” “This ensures that the mix of transport modes reflects their intrinsic efficiency, rather than government policies and regulations that favour one mode over another. The strategy is subsequently enabled by a clearly defined freight policy, a single funding regime for the national network and, lastly, the establishment of appropriate regulatory framework.”

Volume of freight critical

The report notes that “the American Trucking Association (2013) forecasts that intermodal rail will continue to be the fastest-growing freight mode in the next decade. Only the very busiest railway networks, which can exploit the density potential of volume growth, are likely to generate sufficiently high financial returns to attract substantial risk capital in long-term railway infrastructure.” “The Association of American Railroads as well in 2013 also highlights the impact of density on efficiency, revenue and, ultimately, the ability to reinvest.”

Lacking in market intelligence

Dr Havenga says, “The failure of South Africa’s freight railway to capture this market is attributable to a lack of policy direction regarding the role of the two modes (road and rail) in the surface freight transport industry and according to the Development Bank of Southern Africa, caused by the absence of sufficient market intelligence to inform policy.” He goes on to confirm that “one of the key requirements for an efficient national freight transport system is better national coordination based on market-driven approaches.”

Pressing need

“To avoid the ad hoc policy responses of the previous century, which led to sub-optimisation, increasing complexity and decreasing end-user quality, the pressing reform issue for South Africa, therefore, is agreement on the design of an optimal freight logistics network based on a market-driven long-term strategy that holistically addresses the country’s surface freight transport requirements.” Dr. Havenga’s final comment in the report, only a few weeks old, states that South Africa’s freight task is expected to treble over the next 30 years, with further concentration on the long-distance corridors. He points out that the country desperately needs a profit-driven market related core rail network to serve industry and manufacturing, as well as a developmental-driven branch line network to serve rural development. Other articles in this category or as background //parlyreportsa.co.za/transport/minister-comments-taxis-e-tolls-road-rail/ //parlyreportsa.co.za/finance-economic/prasa-gets-its-rail-commuter-plan-started/ //parlyreportsa.co.za/uncategorized/transnet-says-freight-rail-operations-coming-right/ //parlyreportsa.co.za/uncategorized/rail-is-departments-main-focus-in-year-ahead/

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Troubled bus industry goes to Parliament

SA bus industry operators in trouble

lowveld-bus-The South African bus system is on the verge of collapse, says the Southern Africa Bus Operators Association (SABOA) and, as the second largest mode of transport in SA behind only taxi transport, this fact was bad news for both commuters and those in industry and commerce whose workers use it extensively, Parliament was told.

Professor Jackie Walters, of the University of Johannesburg and strategic advisor to SABOA, told the portfolio committee on transport that, by its nature, the bus industry in South Africa was partially subsidised and was one of the only countries in the world that seemed to manage on month-to-month contracts.

Subsidies out of date

The bus industry in the past, in order to receive it’s subsidies, worked its calculations on the basis of commuters carried but the industry had slowly switched to contracts where kilometers covered are now the basis for calculation, a preferable system in the industry.  However there had been no extensions or expansion allowed in kilometers covered by subsidies for thirteen years.

Prof. Walters maintained that the bus industry performed a critical role in balancing demand and the pricing system within the public transport system.

The policy applicable to the commuter bus industry was founded on the White Paper on National Transport Policy of 1996, and in a number of other documents such as the Moving South Africa Strategy (MSA), the National Land Transport Transition Act of 2000 (NLTTA) as well as a Model Tender Document and the Heads of Agreement (HOA) between organised labour and the Department of Transport (DOT).

Money disappearing

He told parliamentarians that it was the Southern African Bus Operators Association (SABOA) that regulated aspects of the tendering system but the industry was under stress due to the unintended consequences of Division of Revenue Act (DORA) and the bus contracting system to the government, which was supposed to provide financial stability for industry. Whilst funds may be allocated under DORA to provinces, what happened after that was out of control of central government.

The financial stability intended for the bus industry to provide for commuters was a theory but on the ground quite the opposite was happening, he maintained.   This short-term horizon for the industry made longer-term investment decisions difficult and banks were reluctant to provide funding because of the uncertainty over the future of the contracts.  “No industry can operate on this basis‚” Prof. Walters said.

No windfalls, no shortfalls even

He attributed the problem again to the negative effect of DORA, which left it to provinces to make up the difference between the public transport operations grant allocated to provinces by national treasury and an agreed-upon escalation rate‚ which was linked to increases in the consumer price index.  Provinces continually claimed that they did not have the money to make up the shortfall.

Prof. Walters said the government had not taken into account at any stage the onerous operational cost increases that bus companies had to bear; namely 44% for labour‚ 28% for maintenance and the national escalation on fuel. There had to be risk sharing between government and the operators, he said.

 

No conformity

There were different types of contracts in the industry, he went on to explain, some which were seventeen years old and which were supposed to have been transformed after three years with competitive tendering and negotiation of contracts.

He said that in all there were 39 interim contracts in operation, 66 tender contracts and 10 negotiated contracts. The contract types in operation were based on a user-pays principle regarding the subsidies.

In conclusion, Prof Walters said that above all it was important to get national treasury to acknowledge the contracts and not leave things to the provinces.

DOT to investigate

MPs generally agreed that in the longer term, common ticketing systems over all services in the country generally had to be introduced, similar to that in the BRT system but a short term answer also had to be found to keep the industry alive in terms of the explanations from Dr Walters. 

DOT was told to  report back to Parliament.

Refer previous articles in this category
//parlyreportsa.co.za//energy/transport-subsidies-to-business-are-wrong-says-parliament/
//parlyreportsa.co.za//bee/all-not-well-in-the-trucking-industry/

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Bumpy road for e-tolling Bill continues

E-tolling finally makes it through Parliament…

Discontent was expressed once again regarding the Transport and Related Matters Bill regarding e-tolling when opposition members complained that the Bill had been classified as Section 75 for national competence only, therefore denying the National Council of Provinces the process under section 76 of the Constitution whereby the Bill and its contents could be debated and approved at provincial level.

Johannes Makgatho, department of transport, told parliamentarians of the select  committee on transport, NCOP, that when the South African National Roads Agency Limited (SANRAL) Act was promulgated, electronic toll collection (ETC) was not envisaged in its current form. The development of the Gauteng Freeway Improvement Project (GFIP) had necessitated ETC and the Bill was necessary.

Sanral goes big on bonds

road tollsThe Bill was described by DoT as being of vital importance for the collection of tolls, the lack of which would have a negative impact on the ability of government to raise capital for their infrastructure projects. SANRAL had issued bonds to the tune of R24bn and the inability to collect tolls to repay the bonds would imperil the state guarantee provided to SANRAL, Makgatho said.

Ms Suraya Williams, Principal Law Advisor from the Office of the State Law Advisors, told the committee that that the regular ‘substantial measure’ test was applied to the question of whether the Bill should be tagged under section 76 for provincial debate but according to this established constitutional process, the Bill had been found to be a Section 75 Bill.

Who has heard of Cross Border Agency?

The Democratic Alliance said that it did not object to e-tolling in principle but considered there was a lack of public participation on the project and the process of e-tolling as a whole and this was unacceptable. Also all funds were to be collected by a body known  as the Cross-Border Road Transport Agency, which they said was a relatively unknown entity and were deeply concerned that this body was competent.

The DA added that this state entity had already been found unable to handle its own finances and got into difficulties handling just cross-border taxi industry matters. Mr Alex van Niekerk, Manager of the Gauteng Freeway Project for SANRAL, said the Cross-Border Agency had indeed experienced much difficulty initially with vehicles entering the country and travelling on roads which had not been tolled, but they had now built up experience with e-tolling and were ready for GFIP and national e-tolling as it built up.

Like cellphones

Mr van Niekerk explained that e-tolling would replace conventional toll plazas and that tolls would be recorded electronically in reference to barcodes which recorded the type and status of the vehicle in the same manner as prepaid airtime on cell phones. Existing toll plazas would remain but rather than manual payments, the plaza would read the tag and give access if there was credit on the account.

He said the principle of tolling did not change at all, only the mechanism of tolling changed and “non-compliance at the time of travel could therefore be remedied after the fact.” No profit, he added, would be made by SANRAL in the collection of toll revenue and he added that technology for the GFIP was considered “cutting edge”.

The Bill has now achieved NCOP concurrence and has gone forward for final reading. It then goes to President Zuma for assent.
The following articles are archived on this subject:

 //parlyreportsa.co.za//finance-economic/transport-laws-bill-on-e-tolling-amended/
//parlyreportsa.co.za//cabinetpresidential/outa-goes-to-supreme-court-of-appeal-against-bill/

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