ACSA wasting money while the country is in an economic crisis

The Transport state owned entity, the Airports Company South Africa (ACSA) will celebrate its 25th anniversary with a gala dinner this evening. The total cost of the event could run into millions of rands.  This expenditure on the part of ACSA comes while the South African economy is in dire straits.

The DA was informed of this lavish function last week. It’s due to take place in the expensive Sandton Convention Centre.  The DA has submitted urgent questions to the Minister of Transport, Blade Nzimande, in this regard.

This extravagant dinner is particularly concerning due to ACSA being one of the SOEs that have been mentioned by name in the Zondo Commission on state capture.  This is nothing more than a squandering of money that should  be better used elsewhere.

The DA will also be writing to the Minister requesting him to explain how such an unnecessary expense could take place when the money could be put to better use to improve South africa’s airports.

The DA will not allow wastage of taxpayer’s money to go unchallenged so that such abuse can be reduced in future.

ANC must pay back Bosasa proceeds of corruption

Former ANC Treasurer-General, Zweli Mkhize has conceded that the failing ANC did in fact accept payments from Bosasa while they were fully aware of the corruption surrounding the company.

This concession cannot simply go with impunity. The ANC must pay back every cent it received in Bosasa kickbacks.

Reports indicate that an estimated R40 million in public money has allegedly been spent by Bosasa in the form of donations, sponsored ANC events, funded rallies in the run-up to the 2014 elections and even the controversial R500 000 paid to Cyril Ramaphosa’s presidential campaign. This figure excludes the billions which have been siphoned by the ANC government over the years.

These latest revelations are an indication that Bosasa has acted as a front for ANC corruption for decades. It is clear that it is not only former President Jacob Zuma who has been embroiled in corrupt activities, but that the entire ANC is rotten to the core.

The ANC is an organisation without virtue which uses the proceeds of bribery to advance their failing political agenda.

South Africans have not recovered from the consequences of Zuma’s calamitous 9 years in office which brought carnage and destruction to our country, leaving over 9 million South African citizens unemployed and with dwindling prospects of finding a job.

It is becoming increasingly evident that Zuma’s 9 years was only a waste for everyone but those connected to the ANC and its corrupt networks.

The Democratic Alliance is the only party that holds its own accountable regardless how tough the decision. All South Africans who have been hamstrung because of ANC’s corruption must use their vote diligently, by making sure they vote to bring in a DA government that is serious about fighting corruption

Budget 2019: A budget speech of bailouts not for the people of South Africa

Finance Minister, Tito Mboweni’s maiden speech reveals a major increase in the gap between revenue and expenditure that has been caused primarily by the Eskom financial crisis.

The Eskom crisis is only partly being dealt with by allocating bailouts of R23 billion each year over the medium-term totaling R69 billion. This will kick the can down the road until after the May General Election when we expect a more substantial funding of Eskom to be announced in the 2019 Medium Term Budget Policy Statement (MTBPS).

Economic growth for the 2018 year has been maintained at the 2018 MTBPS projection of 0.7% but the outer years have been revised down in 2019 from 1.7% to 1.5% through to 2021 from 2.3% to 2.1%.

For the first time post 1994 the debt to GDP level is predicted to breach the 60% level at 60.2% in 2023/24. This the tenth year in a row that the debt stabilisation has been pushed out by a further year and makes a mockery of the annual commitments from various ministers of finance to stabilise debt.

Tax revenue shortfall has grown from R27.4 billion in the 2018 MTBPS by R15.4 billion to R42.8 billion.

Whilst the Minister asserts that there will be no income tax rate increases the lack of any inflation-linked increases in personal tax brackets is effectively an income tax rate increase that will raise an additional R12.8 billion.

Another effective tax increase is the failure to give an adjust the medical tax credit for inflation and will raise an additional R1 billion in tax revenue. This will be very hard on pensioners particularly those on a fixed income.

As we predicted the Fuel levies will be increased by 29 cents/lt on petrol being 15 c/lt increase in the general levy, 5 c/lt on RAF and 9 c/lt in the form of a new carbon tax.

The expenditure ceiling has been increased by R16 billion which increases the 2019/20 deficit from 4.4 % in the 2018 MTBPS to 4.7% in the 2019 main budget. Another solution must be found to deal with the Road Accident Fund losses in place of continually increasing the fuel price.

What would on the surface appear to be a robust statement that the public sector wage bill is unsustainable and the move to reduce the public sector wage bill by R 27 billion over the three years relies solely on natural attrition together with an early retirement program seemingly to be partly funded by the Government Employees Pension Fund (GEPF).

This attempt to reduce the public sector wage bill will not make a meaningful reduction and is clearly an indication that a negative reaction from the unions is feared if the required reductions in the wage bill were to be seriously addressed.

By sleight of hand the bailouts for SAA, SABC, Denel and other failing SOE’s has been placed in the provision of a R13 billion contingency reserve. There is no doubt that these SOE’s will be bailed out and it is disingenuous to camouflage them in the contingency reserve.

The Minister again asks the question of whether we need the failing SOE’s but then goes ahead and provides for their bailouts.

The Minister has made a valiant effort to produce a budget that meets the demands from multiple players but which in the end effectively kicks the main issues to touch till after the May 2019 election and probably into the lap of yet another new finance minister.

Ultimately, this budget is dominated by bailouts to failing SOEs and will do nothing to ease the lives of ordinary South Africans.

Public Service Commission nepotism probe finds Faith Muthambi broke the rules

Former Public Service and Administration Minister Faith Muthambi has been found “to have failed to adhere to regulatory prescripts” by the Public Service Commission (PSC) for possible abuse of office when she had expanded her private office to 40 people, some of whom included family and friends.

The findings follow a request by the Democratic Alliance (DA) on 2 February 2018, to the PSC for an investigation into the hiring practices and composition of the former minister’s private office.

While we welcome these findings, we will be writing to the current Minister Ayanda Dlodlo to request that the PSC report into these findings are made public. It is rather peculiar that the contents of the report were shared only with the President and the Minister of Public Service and Administration and not with the DA – who requested the investigation. The DA has been provided only with a letter which presents the findings in vague terms.

The DA will not stand for this report to gather dust on President Cyril Ramaphosa or Minister Dlodlo’s desks. The fact that Faith Muthambi is no longer a minister does not absolve her from accountability. In fact, she still remains an ANC Member of Parliament and must be held to account.

The fact that Muthambi, despite all the corruption allegations leveled against her,  is still an ANC Member of Parliament speaks to the caliber of leaders in the ANC ranks. The failing ANC never holds its public office bearers accountable for wrongdoing, but rather reward them with key positions in government and parastatals.

Contrary to the ANC the DA is no such party. We take the hard, often unpopular decisions of holding government official accountable. Now, more than ever, it has become clear that good governance will never be achieved by the ANC.

The DA is the only party that is committed to take up the important task of building One South Africa for All.

Mboweni has a tough job but changing the fortunes of the country will happen at the ballot box

 

The following remarks were delivered by DA Shadow Minister of Finance, Alf Lees MP in Parliament today.

Introduction

Nothing can illustrate the dire state of the South African economy better than the state of Eskom. The Budget for 2019 is going to extend this illustration, by painting a picture of South Africa in the dark, with 9.7 million people who are out of work and have no hope of seeing a job in the 2019 Budget.

The Minister of Finance should be making the robust decisions necessary to hold the fiscal line, but will likely simply not have the support of cabinet and the failing and fractured ANC nor indeed fiscal room to manoeuvre. The Minister is faced with financial crises at every turn and no matter the maladministration, thievery and thuggery that brought these about, they cannot be wished away.

Finance Minister Tito Mboweni will be dealing with the biggest financial crisis since the advent of a democratic South Africa. This time the crisis is not the making of the apartheid regime, but by a democratically elected ANC government that included President Cyril Ramaphosa.

When Minister Tito Mboweni makes his maiden budget speech, the Minister will have to deal with the following key issues:

  • Weak economic growth – by presenting a credible plan to boost economic growth to an average of at least 3%;
  • A Revenue collection shortfall – by at very least announcing the name of a new credible SARS Commissioner;
  • Cost Containment – by providing expenditure reductions to ensure that the expenditure ceiling is not breached;
  • Ballooning national debt – by providing a credible plan that will stabilize national net debt and ensure that it remains below the 52.1% of GDP level forecast in the 2018 MTBPS.
  • Zombie” state-owned enterprises – by providing credible funding plans to deal with the cash crunches that exist at Eskom and others, and
  • An ever-growing list of long-term fiscal risks – such as the Road Accident Fund’s massive R206 billion excess liabilities and the uncertainty of the cost structure for a possible National Health Insurance and Fee Free Higher Education.

What will define the success or failure, of the Minister’s “maiden” main Budget will, in the end, be whether he can give hope to the 9.7 million people who do not have jobs or have given up looking for jobs in South Africa.

  • Economic Growth

A credible plan to boost economic growth by an average of at least 3% will need to be presented. However, to boost economic growth and create jobs it requires a fundamental change in economic policy in South Africa. That is why South Africa needs a “policy shock” to boost economic growth and create jobs in South Africa.

The Minister should announce a package of structural reforms designed to boost investor confidence, and consumer confidence, and therefore private sector investment.

There will be no way of dealing with creating jobs and decreasing poverty unless there is a recognition that the current policies have failed, do not work and will not work. There has to be a new mindset that prioritizes economic growth and job creation in the forefront of all policy formulation.

  • “Zombie” State-Owned Enterprises

Zombie State-Owned Enterprises will once again be a focus point on the Budget and will continue to drain South African resources. The biggest risk at this stage is Eskom and its mountain of debt. Due to maladministration and corruption under the ANC, South Africans will have to pay in some form or the other:

  • The first option may be a part bailout by doing a debt for equity swop in the region of R100 billion – this would constitute the biggest bailout in South Africa’s history
  • The second option may be for the sovereign to take over the debt service obligations only, and not the actual debt itself

An additional factor to consider is the fact that Eskom has applied for large tariff increases for the next three years, which if granted, would amount to a 56% accumulative increase over the next three years.

In the end there is now no escaping massive bailouts in some form to save Eskom financially, and South Africans will once again be forced to pay for the wrongdoings of the ANC.

When Eskom fails, the economy of South Africa fails. This cannot be allowed to happen, even if it has been brought about by theft, corruption, maladministration and incredibly foolish ANC policies.

  • Revenue Shortfall and Ballooning National Debt

On top of the R27.4 billion tax revenue shortfalls announced at MTBPS 2018, we expect that the tax revenue shortfall will increase by an additional R8.4 billion since MTBPS 2018, bringing the total tax revenue shortfall since Main Budget 2018 to R35.7 billion.

Even before additional expenditure pressures, such as bailing out SOEs, the shortfall will inevitably increase the budget deficit, borrowing requirements and the already ballooning National Debt, which is estimated to exceed R3 trillion this year. This once again pushes debt stabilization out in terms of the timeframe, and up in terms of the level of stabilization.

This repeated pushing out the achievement of a stabilization of debt levels has persisted year after year for the past nine years and makes a mockery of the intention, repeatedly stated by the many successive Ministers of Finance, of achieving debt stabilization in the outer year of each budget.

The implication of this is that South Africa is projected to pay R247.2 billion in 2021/22 on merely servicing this mountain of debt. This will mean that South Africa will at least spend on debt service costs:

  • Twice what we will be spending on Police Services;
  • 24 times what we spend on Home Affairs;
  • 9 times what we spend on Job Creation and Labour Affairs; and
  • 4 times what we spend on Law courts and prisons.

Clearly, resources are deviated from productive investments such as creating fair access to jobs, protecting our borders, fighting crime and service delivery. For that reason, the Democratic Alliance has introduced a private members bill called the Fiscal Responsibility Bill that sets limits on the allowable debt levels for South Africa.

  • Cost Containment and Asset Sales

Given South Africa’s financial position, we need to embark on cost containment measures.

Immediate cost containment measures that could be embarked on in the 2019/20 financial year include amongst others:

  • Limiting the increase on current expenditure to be in line with inflation, this alone will bring about R26.2 billion in savings;
  • Reduce the cabinet by about 20 ministries, which will could save an estimated R670 million in 2019/20;
  • Block all incoming ministers and deputies of the sixth parliament from;
  • Buying new cars;
  • Upgrading ministerial houses;
  • Purchasing new office furniture.
  • Running the provincial legislatures more efficiently, which could save an estimated R1.9 billion in 2019/20; and
  • Reducing the number of foreign missions by 69 from 125 to 56.

The Minister should also be looking seriously at the sale of non-core assets as has been frequently professed by other finance ministers before him.

The following are a few obvious candidates for sale relatively quickly and could realize R29.4 billion:

  • Telkom shares = R14.9 billion
  • Gripen fighter jets = R14.5 billion

Conclusion

 South Africans are faced with having to fund the consequences of ten years of the failing ANC’s maladministration, corruption and policy chaos. It is not directly the fault of South Africans – but they have no choice but to bite the bullet and foot the ANC’s bill.

What the Minister of Finance must do is to minimize the impact on ordinary South Africans, especially the 9.7 unemployed South Africans, by taking a robust position to reduce current expenditure to make funds available to fund the legacy of ANC excesses- such as keeping Eskom’s lights on, so that the South African economy does not collapse and will rather grow and create jobs.

In our response to the budget speech, we will put forward even more solutions to the problems facing the economy of South Africa but ultimately, the power to change South Africa’s fortunes lies in the hands of every voter on the 8th of May.

Hawks decline to act on suspicious payment to ANC Youth League

The Directorate for Priority Crime Investigation, or “Hawks”, have confirmed in a letter that they have declined to prosecute the former president of the ANC Youth League (ANCYL), Collen Maine, on charges of corruption.

In September 2017 I laid charges against Maine and Joe Singh from Just Coal, after the latter confirmed that R500,000 was paid to the ANCYL in anticipation of an extension to a coal contract with Eskom. The 2014 contract to supply Eskom with coal was terminated in 2016, despite this payment to the ANCYL.

In their letter to me, the Hawks state that there is “no reasonable prospect of successful prosecution” because there was no corroborating evidence to support the allegations that the R500,000 was paid to the ANCYL “to assist in receiving a further Eskom contract”.

But this only poses the obvious question: why would Just Coal give R500,000 to the ANCYL? And why would Singh lie about his intentions in making this payment?

Just Coal’s R500,000 payment to the ANCYL is reminiscent of the R500,000 paid by Bosasa to President Cyril Ramaphosa to support his campaign to be elected ANC president in 2017.

We now call on the ANCYL to do what Ramaphosa did: concede that the payment was dubious and pay it back immediately. Maine cannot claim ignorance of this payment as he personally lobbied Singh to contribute financially to the ANCYL.

The Hawks decision to let Maine off the hook is disappointing, but we will not allow this dubious payment to be swept under the rug. Indeed, Eskom is set to come under the spotlight at the Zondo Commission of Inquiry into State Capture this week and Parliament will similarly focus on the “Eskom energy crisis” with my urgent debate on Thursday.

The DA will continue to fight State Capture and corruption in all its forms and with the same single-mindedness with which we are working towards building One South Africa for All.

SAPS must probe DA’s Eskom billboard vandals

Today, the Democratic Alliance (DA) laid criminal charges at the Parkview Police Station following the vandalising of a DA billboard highlighting Eskom and ANC’s failure to keep the lights on for South Africans.

Those who are involved in destroying our billboard are guilty of malicious damage to property which is a crime punishable by law. Moreover the suspected burning of our billboard is in violation of the Section 92 of the Electoral Act, which states:

From the date on which an election is called to the date the result of the election is determined and declared in terms of section 57, no person may deface or unlawfully remove any billboard, placard or poster published by a registered party or candidate

We call on the South African Police Services (SAPS) to investigate the matter and take the necessary action against the individuals involved.

The sabotage of the DA billboard does not change the fact that under the failing ANC, Eskom poses the biggest economic risk to South Africa. The people of South Africa have once again been plunged into darkness while those implicated in state capture corruption keep their illicit gains.

The DA will fix its billboard, as no amount of arson or sabotage will deter us from exposing the ANC and Eskom’s failures. South Africans know that the ANC is out of its depth and has no clue how to fix the problems at Eskom.

The DA is the only party with its cheaper electricity bill that can turn what is currently a besieged Eskom into a thriving power utility.

Minister Gordhan should condemn Eskom’s plans to retrench skilled white employees

The Democratic Alliance (DA) notes with concern reports that Eskom plans to retrench skilled white employees, among them engineers and managers, in order to meet its affirmative action targets.

While transformation of the workforce is crucial in our country, these retrenchments come at a time that Eskom requires skilled and experienced technicians, irrespective of their race, to bring stability at the power utility.

Furthermore, Eskom cannot simply retrench employees based on the colour of their skin. The South African constitution is clear about discrimination on the basis of race. If this is indeed true, Eskom will not only be in contravention of the Constitution, but they would also be shooting themselves and the South African public in the foot.

I will therefore write to Minister Pravin Gordhan to urgently clarify and condemn the comments which have allegedly been made by Eskom. He needs to categorically state if this is a government position.

Needed now more than ever is for stability and policy certainty in this entity. We cannot afford a racial witch-hunt which is both illegal and detrimental to Eskom’s future.

It cannot be that Eskom, which poses the biggest economic risk to South Africa, would target hard working employees at a time of such a major crisis.

South Africa has been plunged into darkness by Eskom under the leadership of the failing ANC.

The job of turning around Eskom requires skilled and experienced workers who will ensure that the lights are switched back on. It certainly does not need a task team led by Deputy President David Mabuza who turned Mpumalanga into a failed state through massive mismanagement and corruption and a massive labour dispute to compound matters.

The DA is the only party, through its cheaper electricity bill, with a plan to fix Eskom and transform it into a thriving power utility.

DA welcomes Bosasa’s voluntary liquidation application

The Democratic Alliance (DA) welcomes Bosasa’s application for voluntary liquidation following various banks closing their accounts. Bosasa has been, for the past 20 years, at the heart of overseeing the capture of the ANC government. Although this liquidation is to be received with great celebration, it does not absolve the ANC government for their role in their seemingly corrupt relationship with Bosasa.

This liquidation provides President Cyril Ramaphosa with a public opportunity to fire Mokonyane, Smith, Mantashe and all other implicated parties from the ANC-Bosasa benches.

It is also of utmost importance that all remaining government contracts with Bosasa be audited or cancelled with immediate effect.

The DA hopes that the announcement of this liquidation will be delivered in hand with a plan to recoup the billions stolen from taxpayers by the Bosasa scandal. South Africans deserve a government that will hold itself accountable for its mistakes, capture and corruption, and that will return every stolen or captured cent to its citizens.

Furthermore, President Ramaphosa must also make public the terms and conditions of Andile Ramaphosa’s contract with Bosasa.

Only the DA can build One South Africa for All, and will protect citizens from corrupt and captured government officials who prioritize their personal financial incentives above the lives of citizens. A DA government would institute a 15-year jail sentence for those found guilty of corruption, as those chosen to lead should never steal from those who have placed their trust in them.

DA’s Manifesto centred on building One South Africa for All

Today, Democratic Alliance (DA) Leader, Mmusi Maimane, kicked off the Party’s manifesto mobilisation week in his hometown of Soweto, Gauteng, ahead of the party’s Manifesto Launch at the Rand Stadium in Johannesburg this Saturday, 23 February. Maimane went door-to-door, engaging with residents and encouraging them to join this coming Saturday where we will make history and unveil our agenda for change. Pictures are attached here, here, here, here and here.

Our manifesto is grounded on our offer to bring immediate change that builds One South Africa for All where there’s a job in every home, our communities and streets are safe, our borders are secure, basic services are delivered to all, and corruption is crushed. The manifesto is a strong plan with implementable solutions to rescue our economy, and we believe that our offer will resonate with South Africans who want immediate change.

Over the coming days, DA public representatives, MPs, MPLs, Mayors, Councillors, and activists will cover every corner of Gauteng mobilising citizens to fill the Rand Stadium this coming Saturday.

The choice that lies before South Africans when they cast their votes on 8 May this year is a choice between another 5 years of talk shops, summits, corruption and empty promises from the ANC, or DA’s agenda for immediate change that builds One South Africa for All.