DA calls on Minister Patel to justify to Parliament e-commerce restrictions

The Democratic Alliance (DA) has written to the Portfolio Committee Chairperson for Trade, Industry and Competition, Duma Nkosi to request that we invite Minister Ebrahim Patel to justify the restrictions around e-commerce during the level 4 risk-adjusted approach.

During the hard lockdown, we were told by the Minister that e-commerce could not be allowed because it would be “unfair” to spaza shops as they were closed. This turned out not to be true.

To date, no logical rationale has been provided to South Africans and businesses by the Minister. Instead, we were told by the Minister during a parliamentary committee meeting on Friday that “directions may permit the incremental expansion of e-commerce, taking into account the need to limit the extent of movement on the road, contact between people, law-enforcement challenges and the impact on other businesses”.

It is critical that Minster Patel takes South Africa into his confidence and details what these “directions” are and when they will be issued.

The continued rejection of unfettered e-commerce is simply unsustainable and without reason. Further to this, South Africa is a real outlier when compared to other countries that are relying on e-commerce to get goods to consumers in a safe way to reduce the risk of Covid-19 transmission.

It is time that we start walking the talk when it comes to the fourth industrial revolution and embrace e-commerce. Parliament has made much of this new revolution and now is a perfect opportunity to use its oversight powers to compel the Minister to justify his views and demand a way forward.

Sisulu and her top aide hit panic button

The Democratic Alliance (DA) notes Water and Sanitation and Human Settlements Minister, Lindiwe Sisulu’s media statement, released after 21h00 on Saturday evening, 2 May, noting that an urgent decision has been taken to end the term of office of the current interim Amatola Water Board and to appoint legal administrators to manage the Board’s affairs.

Interestingly, the Minister noted that decisions taken by the Board would remain valid and in force – including an investigation into the current CEO, who was recently suspended with full pay.

The Minister concluded her statement by noting that there are similar on-going investigations into Lepelle Northern Water and that further announcements will follow.

The Minister has since released a further two statements this morning, the last of which, as a pre-emptive measure, warns social media users against the circulation “fake news”.

It is clear the Minister is in a panic.

Shortly prior to the her announcement last night, my office received dossiers of information from two separate whistle blowers, relating to a number of matters concerning Sisulu’s department that are of national importance. These will all be aired publicly in coming days.

Most importantly, the DA can confirm that we are in possession of two sworn affidavits, drafted by the Chief Executives (CE) of both Lepelle Water Board and Amatola Water Board, Phineas Legodi and Vuyo Zitumane.

Zitumane is the suspended CEO as referred to by the Minister.

The CE’s affidavits were drafted in terms of the terms of the Prevention and Combating of Corrupt Activities Act 12 of 2004 and both note the same serious allegations of political interference within their respective Boards’ activities, by a top Ministerial aide, closely linked to Sisulu.

This aide is well known to the media, having served in previous Ministries headed by the Minister, in the capacities of Chief Director, Stakeholder Relations Head, and whom now occupies a senior position on yet another Ministerial Advisory Committee, reported on by the DA on 5 March.

The allegations contained in both CE’s affidavits are of an serious nature, and are substantiated with annexures of recorded evidence. They relate to allegations of egregious impropriety on the part of the Minister’s Advisor in relation to emergency procurement processes and tenders, specifically focused on sand water extraction during the periods of disaster relating to both the drought, and subsequently, the Covid-19 crisis.

The DA is of the view that Sisulu’s late night press release on Saturday evening, as well as two subsequent statements issued by her office this morning, are pre-emptive measures designed to place the Ministry on the front foot of this developing story, and nullify the bona fide and incredibly serious allegations contained in the affidavits drafted by the respective Chief Executives of both the water boards concerned.

The DA has also confirmed that one of the CEs has now laid criminal charges against the Minister’s advisor in relation to the undue interference that has allegedly been exerted on the Board’s procurement processes.

Given that criminal charges now abound, the DA cannot at this point report on the intricacies of the allegations contained in both affidavits, save to say they beg serious questions that must now be answered in a court of law.

The DA will today refer this matter, along with supporting documentation to the Office of the Public Protector, and to Parliament’s Standing Committee on Public Accounts.

We further commend the bravery of all whistle-blowers and send our encouragement to officials whose images are deliberately tarnished as a result of their attempts to expose government maleficence.

DA to submit PAIA applications to compel release of Covid-19 provincial data

Note to Editors: Please find attached English and isiXhosa soundbites by Siviwe Gwarube MP, DA Shadow Minister of Health.

The Democratic Alliance (DA) provincial spokespersons on the health portfolio will be submitting Promotion of Access to Information Act (PAIA) applications to the provincial health departments compelling them to release daily, detailed Covid-19 statistics.

Of the 9 provinces, only the Western Cape and Gauteng (although in a limited fashion) are releasing daily stats which are broken down into regions, fatalities and most importantly tests conducted.

The DA has repeatedly raised the issue of credible, consistent and accurate data which gives the country a complete picture of community transmissions in the fight against Covid-19. There seems to be a desire in some provinces to withhold data from the public for no reason at all. As an example of this absurdity, the KwaZulu Natal provincial government is claiming that these statistics are embargoed. Other provinces are either inconsistent in the sharing of this information or it does not happen at all.

I have raised the issue of uniformity of data with the Minister of Health, Dr Zweli Mkhize so that we can understand how many tests are conducted per province and what proportion of the national testing figures does this represent. I have also made the case for transparency with regards to provincial testing strategies so that we can be assured that each province is testing enough people in relation to their population.

The crisis in the Eastern Cape where less than 10 000 tests were conducted in 5 weeks was discovered much later than it should have because there was no requirement for public release of testing figures. This is an important accountability tool.

The Western Cape has been transparent with this data for weeks and has consistently made known their testing strategy. The province began – weeks ago – to conduct targeted testing, tracking and tracing which is yielding an accurate reflection of community transmissions.

They are screening and testing in clusters where positive results have been found and the virus is likely to have spread. Epidemiological evidence suggests that if you have a far more targeted approach like this, as opposed generalized screening effort, you are likely to identify the requisite interventions swiftly and eventually flatten the curve.

In addition to this, the Western Cape accounts for a large number of all tests conducted in the country. Information released by the National Institute for Communicable Diseases (NICD) this week revealed that in the period between 4 March and 27 April the Western Cape conducted 541 tests per 100 000 people followed by Gauteng that conducted 439 per 100 000 people and lastly by the Free State that conducted 284 per 100 000 people. We welcome the release of this information and trust that the NICD will be making it available weekly.

This information from the NICD underscores the importance of having reliable and consistent provincial data. This is critical for public accountability and also guides urgent interventions that are needed almost in real time. Information about a global pandemic that is wreaking havoc in our country should never be considered classified. That goes against Section 32(1)(a) of the Constitution which determines that everyone has a right of access to any information held by the State. This is more so information relating to a global health crisis.

The DA will continue fighting for this information to be made public so that we can ensure that we are not shooting in the dark. Every province must have a targeted approach to testing, tracing and tracking while meeting their daily testing targets. These PAIA applications will help us determine that in the next coming weeks.

DA requests full details on Gordhan and unions SAA Leadership Compact

The Democratic Alliance (DA) will write to the Minister of Public Enterprises, Pravin Gordhan, to request the full details of the Leadership Compact he has entered into with the unions representing South African Airways (SAA) employees. We will also seek a commitment that the ANC Government will not make any further bailouts to SAA nor provide any further Government guarantees or any other form of security to the airline.

The Minister, by way of a media statement on Friday, confirmed the agreement with SAA unions. This agreement may well be a breakthrough but unfortunately, the media statement is scant on detail. The question that all South Africans will be asking is whether or not this deal includes yet more billions of rands in bailouts to keep the bankrupt airline going and whether or not majority ownership of SAA will be transferred to private equity?

It is astounding that the unions and the Minister of Public Enterprises think that they can enter into a Leadership Compact that apparently has no details and that the Business Rescue Practitioners (BRPs), Les Matuson and Siviwe Dongwana, are then expected to implement. This agreement also seems to override the decision by the BRPs that employees were required to decide on a retrenchment package by the 1st of May 2020.

Furthermore, the media statement does not make a single reference to the BRPs except that it implies that Minister Gordhan has seemingly taken control of them by establishing “very demanding timelines for the development of the Business Rescue Plan….” – something that only Matuson and Dongwana can legally do. This demonstrates once again that the Minister believes that he is in charge and what is worse the BRPs are seemingly delinquent by apparently allowing the Minister to dictate what they must do. It is unbelievable that Matuson and Dongwana can allow themselves to be sidelined in this way.

They have a legal obligation to follow sections 128 to 155 of the Companies Act. The legal mandate of the BRPs is to either devise an acceptable business rescue plan or, failing that, to apply for liquidation. In some five months, Matuson and Dongwana have failed to come up with a business rescue plan of any sort. Despite the failure of the BRPs to produce a business rescue plan within the time limits contained in the Companies Act, they have also failed to apply for liquidation as is required by the Companies Act.

The Matusan and Dongwana need to get their acts together and resist any interference from Minister Gordhan. The public deserves clarity on the future of SAA and the full details of any agreements the Minister has entered into and a guarantee that public money will not be wasted on a lost cause, especially during this time of crisis.

The DA stands strongly opposed to any further bailouts either in cash or Government guarantees as working capital for SAA. Any funding required in terms of the negotiated Leadership Compact must be raised from investors and not from the taxpayer.

Tourism needs a phased opening up approach to prevent more job losses

The statement made this week by the Minister of Tourism Mmamoloko Kubayi-Ngubane that the domestic tourism season “will likey only start in December” and that no international tourism would occur this year, is most concerning. Her statement implies that any tourism recovery plan that government may implement will not apply a phased or staggered approach.

Unless certain sub-sectors of the travel and tourism sector start opening up soon, there will be nothing left to start in December.

It is estimated that a million jobs within the sector have already been lost thanks to government doing nothing to jump-start it or create the conditions for the sector to do so. The Minister speaks of the Tourism Relief Fund as if it is the be-all and end-all for recovering the sector, when it is only one aspect.

A recovery plan should start with the opening of the hospitality industry within the parameters of meeting hygiene and social distancing protocols. Doing this would reduce further job losses and the termination of additional hospitality establishments.

Yesterday Hong Kong was the first region in the world to announce a tourism recovery plan. Considering that the region is relatively close to the source of Covid-19 on mainland China, there should be no excuse for government not to consider opening up tourism using a step-by-step phased approach. Not doing this will have dire consequences for the sector, the economy and jobs.

The Democratic Alliance will be asking the Minister about a tourism recovery plan at the Tourism Portfolio Committee meeting next week.

DA will closely monitor Education Departments until after the opening of schools, universities and colleges

On Thursday the Ministers of Higher and Basic Education, Blade Nzimande and Angie Motshekga, both confirmed that the opening of institutions to learners and students will not take place during May but at a later date.

But a major disjuncture emerged in their joint press conference between the approach of the two Departments, which could lead to serious problems in the smooth transitions that the system requires.

The Democratic Alliance (DA) intends to monitor both Departments rigorously, to ensure that learners and students are neither subjected to health risks, nor to risks to their education resulting from disjunctures between the timetables of schools, colleges and universities.

Schools will probably open to Grades 12 and 7 learners on 1 June, said Minister Motshekga, delayed from the original opening date of early May. The DA welcomes this postponement. The remainder of the learners will return in a phased manner, grade by grade. We trust that these phases are relatively widely spaced so that schools have time to adjust to the intake of each grades, given the health protocols that will be required.

We also welcome the stated intention of Minister Motshekga that her Department will devote much of the month of May to the preparation of schools for opening. This preparation will need to be extremely detailed and highly organised, across thousands of institutions and involving thousands of teachers and other staff. Systematic and vital health and safety requirements will be required of each school.

But the DA is concerned about some of the provinces’ capacity to implement these requirements in time, throughout the system. Each school will need to be ready to manage a strict, detailed set of protocols designed to protect learners and teachers against infection by Covid-19 before any learners are admitted. Whether this can be done adequately in all parts of the country, so that our 13 million learners and thousands of teachers are properly protected in the 25 days of May set aside for it is uncertain.

The DA will therefore be monitoring schools in every province to ensure that the implementation of these plans takes place; and we will ensure that the Basic Education Portfolio Committee receives progress reports weekly from the Department itself.

The opening date for universities and colleges remains a mystery, although the Minister did hint that it also could take place on 1 June.

But worryingly, Minister Nzimande’s plans, unlike those of Minister Motshekga, seem not to include a detailed plan for health protocols after re-opening. Rather they focussed on the issue of the stop-gap until re-opening – online teaching – and the difficulties of making this work across our wide range of institutions. It became clear that the obstacles to this remain immense. The Minister has plans to obtain laptops for all NSFAS students – some 800 000 of them. Surely this is an impossibility in the short time available.

We reiterate our view that online teaching on its own is a poor substitute for face-to-face teaching, and works best when ‘blended” with face-to-face methods. It remains essential that, like schools, universities and colleges need to re-open as soon as possible within the health parameters defined by the Department of Health. This is of particular importance for those doing courses with practical components, many of them professionals such as engineers, architects, various medical programmes, art and music.

Thus focussing on a definite date for re-opening, and planning for that, would probably be a better use of the Ministry’s time than searching for the Holy Grail of online teaching. Improving our online capacity is an excellent thing to do, but it is surely not as important as getting students back into the lecture halls, libraries and laboratories.

The DA will be monitoring this Department too, to ensure that its plans for reopening come to the fore and that the preparation of institutions for protecting the health of incoming students and staff is as detailed and focussed as possible.

DA calls for tax relief for working from home and pension lockdown loans

Under lockdown conditions, many taxpayers are required to work from home and have already seen a reduction in their earnings as companies deduct pay for days not worked and not covered by available leave balances, or limit the number of days worked.

This is creating financial hardship that requires urgent intervention.

The Democratic Alliance (DA) will propose changes to the Income Tax Act to allow deductions for home office expenses for all periods worked at home during the lockdown.

This would include expanding the definition of a home office to include any workspace used or a deemed portion of a home.

Expenses such as rent, interest on mortgage bond, repairs to the premises, rates and taxes, cleaning, wear and tear and all other expenses relating to the house, internet connectivity, telephone, stationery and repairs to printers should be permissible deductions.

Any capital gains tax implications on the sale of the house for which deductions are claimed during lockdown should be waived.

When an employee must work from home, they are unable to travel and therefore claim their usual travel allowance deductions. The Democratic Alliance will propose that, during any lockdown period, a deemed amount of travel should be added to the deductible kilometers travelled or that the deductible amount per kilometer travelled be increased for the period of the lockdown.

Although these tax relief measures will lighten the burden on our already overtaxed citizens, a much bolder intervention is required to enable Pension Fund members to access accumulated pension assets without requiring a disinvestment from the market.

Pension Fund (including Retirement Annuity) members must be enabled to leverage their accumulated financial asset as the crisis bites into household cashflows.

Disinvesting via a partial withdrawal at this time would lock in significant, most probably temporary, declines in value and would also attract punitive tax deductions. Accessing the funds at this time thus comes at a significant cost to members and puts their financial well-being in retirement at greater risk than it is already.

To leverage accumulated pension assets without making a withdrawal, the DA will propose a private members’ bill to amend section 19 (5) of the Pension Funds Act of 1956 to extend pension backed loans. Currently, Pension Funds are permitted to provide collateral for housing loans only.

The DA proposes the introduction of a pension backed Lockdown Loan, to be utilized for any purpose by fund members.

The Lockdown Loan facility would operate as follows:

  • The Fund would partner with a banking institution to offer a Lockdown Loan to a member equal to not more than 75% of their current pension fund value. This would ensure that the balance in the fund provides enough collateral for the bank in the event that the member defaults on the loan.
  • Banks would agree to offer a very competitive interest rate to these Lockdown Loans. The risk to the bank is minimal, given that sufficient collateral exists in the balance of the pension fund. It is also acknowledged that the banking sector needs to do more to assist our economy during the COVID-19 emergency. This contribution can include offering Lockdown Loans at rates well below the current 7.75% prime interest rate.
  • To further ease the financial burden on households, the banks would offer the loan over an extended period – such as the member’s full remaining term to retirement date and defer the start of the loan repayment.
  • Where a pension-backed Lockdown Loan is provided to a member, the agreement can include a once-off withdrawal from the pension fund during the period of the loan to fully settle the loan.

Designed this way, the loan provides urgently needed cash to members who will spend it into the economy, the banks make an additional contribution during the emergency, members do not need to disinvest from their pension funds at or near the bottom of the market and do not need to compromise their well-being in retirement.

The DA will ensure that government provides the necessary financial support to all of our citizens during this global crisis. Proposed tax relief measures and Lockdown Loans will help achieve this objective.