Parliament agrees to the DA’s request for a debate of national importance on Coronavirus

The DA welcomes the Speaker of the National Assembly, Thandi Modise’s decision to grant a debate of national importance on the state of South Africa’s readiness to deal with COVID-19, also known as the Coronavirus.

This request was made in accordance with Section 130 (1-8) of the National Assembly rules. Today, the Programming Committee agreed that the debate will take place on Thursday 5 March 2020.

A debate of national importance will afford the Minister of Health, Dr Zweli Mkhize, an opportunity to address Parliament and the nation on the readiness of the Department of Health to deal with this global pandemic. Additionally, it is crucial that the executive tables an inter-ministerial strategy on this issue.

The reality is that the Coronavirus continues wreak havoc across the globe and most recently on the continent. This has health, economic and international relations consequences for the country. This is why an inter-ministerial plan is critical in order to ensure that all bases are covered.

Globally, more than 82 000 people have been infected with the virus, with more than 2 800 confirmed deaths. Although the virus has mainly spread through China, cases have been confirmed in Algeria and Egypt. On Tuesday, the World Health Organization (WHO) warned that the window of opportunity that Africa has had to prepare for the novel coronavirus is fast closing.

In addition to the broader plan by the executive to deal with this Coronavirus and its implications, Minister Mkhize should take the nation into his confidence about the readiness of the selected facilities that would quarantine patients and the screening protocols that are in place at all our ports of entry.

The South African health system is under severe strain as it is. A health crisis like this one could very well dissipate our ability to function. That is why every measure must be taken to ensure that we are prepared for every eventuality. While early detection is key, it is critical that the health system readies itself for a full flown outbreak.

South Africa is a global country and a big player on the world stage. Our government must be responsive to such issues and Parliament is the appropriate platform for the Minister and other members of the executive to showcase their plans.

NDZ’s department a basket-case but pays performance bonuses

Despite two consecutive audit disclaimers, the Department of Cooperative Governance and Traditional Affairs (COGTA) paid its officials almost R4 million in “performance rewards” in the last financial year.

Facing the COGTA portfolio committee on Tuesday evening, Minister Nkosazana Dlamini-Zuma offered no explanation of how this was possible.

She also told the committee that the contract of the previous Director-General of the department had been “shortened”, but was evasive about whether this involved a payout, a redeployment, or both.

The collapse of the department responsible for the oversight of local and provincial government seems to mirror the collapse of ANC-controlled provinces and municipalities across the country.

In the last financial year the Auditor-General could not find sufficient evidence to support most of what COGTA claims as its achievements, and for which managers were richly rewarded. This includes the following:

• Whether new work opportunities were actually created in the department’s Community Work Programme (CWP).
• Whether any work was done to justify the hundreds of million of rand paid to CWP participants and supposedly non-profit companies appointed to administer the programme.
• Whether appointments of senior managers in municipalities were actually vetted by COGTA in terms of the Municipal Systems Act.

The Community Work Programme is a duplication of the Expanded Public Works Programme, and the source of more than R1 billion in accumulated irregular expenditure since 2015. The DA has long suspected that its only purpose is to make ANC membership and activism a lucrative prospect in poor communities.

But Minister Dlamini-Zuma’s department is also failing at its core mandate – to check that local and provincial government perform their constitutional obligation to deliver services.

The DA will insist that the minister explain to Parliament how officials that have looked on while municipal services have collapsed in large parts of the country came to be paid performance bonuses, and what the terms of the former DG’s departure are.

SAA business rescue plot thickens

It should probably come as no surprise that Les Matuson and Siviwe Dongwane, the SAA Business Rescue Practitioners, have requested that the SAA creditors extend the time available to them to produce a business rescue plan for SAA.

It illustrates the lack of urgency on the part of the Business Rescue Practitioners but also on the part of creditors.

This lack of urgency is no doubt a product of the R5.5 billion commercial lender and Development Bank of Southern Africa loans already provided to SAA since the start of the SAA “business rescue” process on the 5th of December 2019 as well as the R 16.4 billion taxpayer bailouts announced by Tito Mboweni, the Minister of Finance, in his budget speech yesterday.

Matuson and Dongwane have advertised for creditors to vote for or against a proposed request for yet another extension for the publication of a business rescue plan that is required in terms of section 150(5) of the Companies Act, No 71 of 2008.

If SAA were not a company being artificially kept going, despite massive losses, with massive taxpayer bailouts there is no doubt that creditors would by now screaming for the plan to be presented and the business rescue practitioners would be under enormous pressure to produce such plan.

In the case of SAA there does not seem to be any such urgency, probably because creditors correctly believe that the ANC Minister of Public Enterprises, Pravin Gordhan, has no intention of ever allowing SAA to be liquidated and that therefor SAA payments to them is guaranteed.

The DA urges all creditors to vote against the extension for Les Matuson and Siviwe Dongwane, the SAA Business Rescue Practitioners, to publish a business rescue plan that is required in terms of section 150(5) of the Companies Act, No 71 of 2008.

DA welcomes Speaker’s announcement that our motion for removal of Public Protector is accepted

The Democratic Alliance (DA) welcomes the decision by the Speaker of the National Assembly, Thandi Modise, to accept our fresh motion for the initiation of removal proceedings against the Public Protector, Adv. Busisiwe Mkhwebane.

The DA initially submitted a motion initiating removal proceedings against Mkhwebane in December 2019. Since then, new evidence has come to light that strengthens our case.

The DA believes that it is of the utmost importance and in the interests of justice and the rule of law that the position of Public Protector is filled by a person who is indisputably fit and proper. Mkhwebane, as demonstrated by the particulars set out in the annexure to our motion (see here), is in our view guilty of misconduct and/or incompetence on several charges including the SARB and Estina Dairy Farm investigations.

To put the best possible case before the independent panel that will evaluate whether or not grounds for removal exist, we submitted a fresh motion last week, and we are happy that the process continues without delay.

The DA will put forward candidates for the independent panel forthwith.

We hope that South Africans may soon be rid of a seemingly politically captured Public Protector, who have not done her high office, or the South Africans she is meant to serve, any justice.

Mboweni embraces DA proposal to cut the public wage bill; now is time for action

The Democratic Alliance (DA) welcomes today’s announcement from finance minister Tito Mboweni that he supports the DA’s proposal to stave off a debt crisis by cutting the public wage bill by over R160 billion.

The DA has long argued that salary freezes for millionaire managers and reducing the number of managers in the public service by a third while protecting inflation-linked increases for frontline service delivery heroes like teachers and nurses, is the only way to prevent fiscal implosion.

Taken together, the DA’s measures will save R168 billion without raising any new taxes on overburdened South Africans. It is the only way out of this crisis.

We are however deeply concerned that Mboweni made this announcement even though the government has not even started the actual work of renegotiating wages. While we welcome Mboweni’s support for our proposal, they are currently just empty words. This government is already facing a huge credibility gap as a result of its failure to implement its past promises. Mboweni’s agreement with the DA today that we need to urgently cut the wage bill is, thus far, just the latest in a long line of promises devoid of any concrete action.

We have already seen that both Cosatu and Nehawu have rejected Mboweni’s embrace of the DA’s proposal, viewing the proposed wage cuts as a “declaration of war.” While we reject the unions’ response with contempt, Mboweni’s unilateral announcement of his support for the DA plan in the absence of any preparatory groundwork does severely undermine the credibility of his undertaking.

We will soon find out whether more words devoid of action will be enough to stave off the final downgrading of South Africa’s credit rating to junk by Moody’s Investor Services.

Following Mboweni’s embrace of the DA proposal, President Cyril Ramaphosa can now no longer delay one of the central choices that will define his presidency. If he chooses South Africa, he will implement Mboweni’s planned wage bill cuts even at the cost of splitting his own governing alliance. But if he again chooses his party over the country by buckling under pressure from the unions, he will condemn our country to fiscal doom.

While the DA has serious concerns over the complete lack of action to date, we welcome minister Mboweni’s embrace of our position and will support any effort to stare down the unions and protect our country from fiscal implosion. We will also be holding Public Service and Administration Minister Senzo Mchunu’s feet to the fire to immediately take action. Mchunu must now immediately implement the R37.8 billion cut announced by Minister Mboweni for the upcoming financial year.

R16.4 billion spent on SAA vanity project is madness

The whole business rescue of SAA was clearly a farce on the part of the ANC in an effort to prevent liquidation and keep control of SAA.

Over the past week Pravin Gordhan, Minister of Public Enterprises has made it clear to both the SCOPA and the PC of Public Enterprises that he remains in control of SAA despite the implementation of the so-called “business rescue” of SAA.

Nothing has really changed and SAA will continue to be a massive drain on state revenue.

The extent of the SAA farce is born out by the massive bailout of R 16.4 billion for SAA announced by Tito Mboweni, the Minister of Finance, in his budget speech today.

It is outrageous that funds desperately needed to stimulate the economy and the creation of jobs is to poured into the SAA vanity project.

This, whilst the child grant is to go up by a measly R 20 to R445 per month –  an amount well below the amount required to provide a healthy diet for a child, let alone for the basics of clothing and other necessities.

The ANC and its trade union alliance partners should hang their heads in shame for wasting money on the SAA vanity project.

Mboweni raises the white flag on debt stabilisation

Growth

Finance Minister Tito Mboweni is right to identify economic growth as the only antidote to South Africa’s financial crisis. Growth brings more revenue to pay for more basic services, and growth helps bring down debt over time.

He confounded expectations of further tax increases and in fact gave some small income tax relief. This is welcome news, especially for working families who have been struggling to make ends meet with successive tax increases in recent years. More money in citizens’ pockets means that they can spend more, or save more, and both of these are good for growth.

He also indicated an intention to reduce corporate tax rates over time. This too is a positive, pro-growth announcement.

Debt

However, the Minister’s primary job remains to rein in our ballooning national debt. He did not do this.

In fact, Treasury admitted defeat, conceding that government will not meet its deficit target, and debt will not stabilise over the medium term. Indeed, far from stabilise, debt will grow to 71.6% of GDP, or R4.4 trillion, by the end of 2022. Minister Mboweni has often committed himself to stabilising debt. Now he has raised the white flag of surrender.

This means we will spend R229 billion this year alone on paying interest on our national debt. That is the same as we will spend on healthcare (R229 billion), more than we will spend on social grants for the poor and elderly (R221 billion) and more than double what we will spend on policing (R106 billion). This shows that unless we get debt under control, we will continue to spend more on interest, and have less and less for basic services.

This ever-mounting debt underscores the need for the DA’s proposed Fiscal Responsibility Bill, which which would introduce a new legislative fiscal rule to stabilise debt, by preventing the government borrowing more each year without the permission of Parliament. We will be tabling this Bill in Parliament and call on all parties to support it.

The deep cuts to public services now being proposed are a direct result of too much debt. Debt must come down, so that social spending can go up.

Wages

The Minister did announce a R160.1 billion cut to the public wage bill. This is welcome movement in the right direction. But his tough talk lacks credibility, because the government has only just begun negotiations with unions. So while the Minister has already budgeted for the full cut, there is no guarantee whatsoever that this cut will actually materialise.

Even with this cut pencilled in, debt is still growing. That means that if the full wage reduction is not achieved, debt will be even worse than now projected.

Bailouts

The Minister talks tough on zombie SOEs. But far from ending support for zombie SOEs, he announced another huge R16 billion bailout for SAA. This too is a white flag of surrender. Treasury has still not imposed any conditions on Eskom for the bailouts they continue to receive.

While the basic services on which the public rely are being cut, more money is being spent on failing SOEs. This is an indefensible choice.

DA proposals

The DA has also proposed an Emergency Solar Rebate to incentivise households to install solar power, easing the load shedding crisis and helping businesses stay open. We are disappointed an incentive scheme like this was not included in the Budget.

In summary, the longer that we allow debt to spiral out of control, the more cuts we will have to endure in future years. It would be wiser and more prudent to take the tough action necessary to stabilise debt now. Unfortunately Minister Mboweni did not do this, instead raising the white flag of surrender.

DA condemns Minister of Employment and Labour for soft-pedalling claims crisis at Compensation Fund

Minister Thulas Nxesi put on a shameful display at the Portfolio Committee on Employment and Labour this morning, soft-pedalling the monumental claims crisis at the Compensation Fund.

The Compensation Fund, which compensates radiologists, physical therapists, orthopaedic rehabilitation specialists and other medical practitioners to the tune of R5 billion every year for treating injured workers, has not settled most of the claims lodged with it since 1 October 2019.

At that time, the Compensation Fund migrated to a new electronic system, called CompEasy (S4i). But the website that is used to report accidents and lodge claims is almost completely dysfunctional.

Every day, my DA colleagues and I on the Portfolio Committee on Employment and Labour are inundated with desperate pleas from healthcare practitioners who cannot submit claims and who are therefore not being paid.

According to one large industry survey, less than 3% of injured workers have been able to have their claims submitted since October 2019 and less than 1% of claims have been processed and paid, compared to 80% on the old system.

As a result, some medical practices have had to shut their doors, leaving their employees jobless and injured workers without the help they need.

In the circumstances, Minister’s Nxesi’s statement that there are “glitches” in the system that will be “sorted out” is a colossal understatement and a vague and empty attempt at reassurance.

The Minister intimated that the Compensation Fund’s problems are caused by “third-party operators” who don’t have their paperwork in order. This merely demonstrates the depth of his ignorance.

The Compensation Fund is experiencing a full-scale IT systems failure. And if anyone, including Minister Nxesi, pretends that it isn’t a major crisis, they are sticking their heads in the sand.

Instead of being defensive and tilting at windmills, Minister Nxesi needs to take the Compensation Fund crisis seriously and announce a comprehensive action plan to deal with the claims backlog as well as the payment of claims going forward.

PIC losses R1.1 billion to bankrupt Madibeng municipality

In a briefing before the Standing Committee on Public Accounts (SCOPA), Auditor General for the North West, Success Marota, confirmed that the Public Investment Corporation (PIC) loaned R1.1 billion to Madibeng municipality in 2010 and the municipality has since refused to and in any event, is unable to pay back the money.

The Democratic Alliance (DA) will, therefore, be submitting parliamentary questions to the Minister of Finance, Tito Mboweni, asking him to provide details on the relevant due diligence that was made by the PIC before a decision was taken to give the loan to an obviously insolvent municipality.

The PIC’s inability to recoup the loan, despite a court ruling that the municipality pays back the money, raises concern about the deteriorating prudential safeguards in the management of PIC assets. The asset manager has essentially become a piggy bank for subsiding corruption in government institutions.

Madibeng is one of the municipalities that lost taxpayers’ money in the VBS scandal, and even before that the red flags were present to warn any alert financier that the municipality was in no position to finance a R1.1 billion loan.

Public servants, who invest their hard earned money to save for retirement deserve to know who made the decision to give Madibeng such an amount of money, using what criteria and how did they hope to recoup the money?

The DA hopes Minister Mboweni will take active steps to ascertain how this loan was approved and to hold those responsible to account.

Mantashe dithers again!

Minister of Mineral Resources and Energy, Gwede Mantashe, has accused the DA-run Western Cape and City of Cape Town of behaving like “spoilers” for taking him and his department to court over the city’s bid to purchase electricity directly from independent power producers.

In an interview with energy expert Chris Yelland, Mantashe is quoted as saying: “The City of Cape Town must talk to us instead of going to court.”

The reality is that this court case is years in the making. The City followed all due process, and applied for a section 34 determination to allow it to purchase directly from IPPs in November 2015, and was met with obstruction and unwillingness on the part of various ministers and the Department of Energy.

The Democratic Alliance (DA) is committed to ensuring that all residents and businesses receive the electricity they need. We are committed to an open and transparent electricity market where all power producers (including Eskom) compete on a level playing field.

It is for this reason that we introduced the Independent Electricity Management Operator private member’s bill to parliament, to allow IPPs to sell to the grid and to allow those metropolitan municipality with the capability and resources to purchase directly from IPPs.

The fact of the matter is that Minister Mantashe is all talk, and no action. He claims the City must withdraw its case and interact with him. But for 5 years, he and his predecessors have blocked every attempt to move forward and allow the City to secure its own energy supply.

If it takes a court case to get him to move on this issue, so be it.