Cadre deployment memo confirms that state capture remains official ANC policy – DA lays complaints with Zondo Commission and PSC

Please find attached an English soundbite by the DA Shadow Minister of Public Service and Administration, Dr Leon Schreiber MP

The Democratic Alliance (DA) has today submitted a second formal request to the Zondo Commission of Inquiry to urgently examine the ongoing role played by the ANC’s policy of cadre deployment in capturing, corrupting and collapsing the South African state. The DA has also laid a formal charge with the Public Service Commission (PSC), requesting the PSC to investigate a leaked cadre deployment memorandum apparently sent by the ANC to all government departments.

In the memorandum, which is in the DA’s possession, the governing party insists that it has the right to interfere in the appointments of all Directors-General, chairpersons, CEOs, and boards of all state-owned enterprises. The memo explicitly instructs ministers that “no appointment should be taken to cabinet without passing through the deployment committee first.”

The memo also stipulates that ANC deputy secretary-general, Jessie Duarte, “should be informed of all posts prior to them being advertised and be sent the advert once they have been published.” The ANC further instructs members of the executive to submit to the party’s cadre deployment committee a list of abridged CVs of all applicants, a shortlist with complete CVs, and a list of recommended candidates.

The contents of the memorandum once again confirms that state capture has long been, and remains, the official policy of the ANC. Through cadre deployment, the ANC has completely undermined the separation between party and state, thereby ensuring that its cadres are appointed to powerful positions in the state in order to serve the financial and political interests of the party, rather than serving the people of South Africa. Cadre deployment not only fuels the ongoing massive looting of public resources by the ANC, but has also drained the state of skills by rewarding political loyalty to the ANC above skill and merit.

Despite an attempted denial by ANC spokesperson Pule Mabe, media reports over the weekend quoted at least five “highly placed” sources within the ANC who confirmed that the memo was authentic. One source even objected to the leaking of the memo “because government appointments should appear to be fair.”

Cadre deployment is at the root of the corruption and collapse of our state, and the DA will not rest until the practice is eradicated. In addition to the complaints filed with the Zondo Commission and the PSC over the latest cadre corruption memo, the DA is also fast-tracking the development of our Capable State Bill to outlaw cadre deployment and replace the ANC’s corrupt state with a DA-style capable state where appointments are based on skill and demonstrated merit, not on cronyism and political corruption.

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Farm Murders: When will you speak up, Mister President?

The Democratic Alliance (DA) calls on President Cyril Ramaphosa to tell South Africa what his government will be doing to address the long-ignored and again increasing numbers of farm attacks and farm murders. Or is he going to continue to pretend that they are not happening, as he did in an infamous 2018 interview?

Since the DA requested a debate of national importance in the National Assembly last week, there has not been a peep from the side of government indicating that it is paying this problem any attention. Unfortunately, this is not out of character for a government that likes to praise farmers when they need them but is never forthcoming with assistance of any kind to the farming community when it is in crisis.

It is as if farmers and farm workers have been declared persona non grata. They are needed to ensure food security but is left to try and solve any and all problems they might encounter on their own.

According to the African Centre for Food Security the underlying issue of food insecurity is contributing to the spike in crimes on farms. Millions of poor South Africans are in despair due to the continued Covid-19 lockdown and ill-conceived regulations.

In South Africa, one of the things people across socio-economic circumstances have in common, is the fact that almost no-one feels safe in their own home. Violent crime is rampant, but few crimes seem to illicit such a poor response from government than farm attacks. The victims of these attacks are often tortured in the most brutal ways, and most are considered lucky if they escape with their lives. Yet the government remains quiet.

According to TLU SA there have been 59 farm attacks and 12 murders since 1 April 2020. There has been no outcry from government. No possible solutions tabled, no campaigns launched to ensure the safety of those living in rural areas, or engagement with them.

Last week the DA undertook to action some measures in the fight against these heinous crimes. This includes:

  1. We will report, when called for, farm attacks as Hate Crimes, as well as report those who glorify farm attacks on social media.
  2. Dedicated DA Councillors or activists will track investigations and court proceedings related to all farm attack cases and report back to farmers to ensure they never miss a court date, or that the case never stalls.
  3. We will work with the Agricultural Unions and do oversight on the farm patrols, assisting them to be organised and formalised.
  4. The party will continue to drive land ownership and the financial support of emerging farmers in order to foster increasing agricultural contribution to the economy.
  5. We will work for an improved SAPS/farmer relationship, in terms of firearm licences, firearm training, farm patrols, and perpetrator apprehension, in all areas to decrease the trust deficit currently experienced.
  6. The DA will continue to push for the establishment of fully outfitted Specialised Units dedicated to protecting rural communities and apprehending any perpetrators who enter farms with the intent to attack or steal.
  7. The DA will ask that the investigative capacity at rural SAPS stations be increased, to ensure that farm attackers are apprehended.
  8. We will request that SAPS re-categorise rural attacks as priority crimes and
  9. The DA will continue to fight the amendment to Section 25 of the Constitution that would allow Expropriation Without Compensation.

It is long past due for the government to pay serious attention to this other plague infecting South Africa. It will not simply disappear because government wishes to bury its head in the sand and ignore the plight of those living in fear in rural communities and on farms.

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Patel buckles under DA pressure and agrees to release NLC Covid-19 Relief Fund Beneficiaries 

In response to an oral question asked by the Democratic Alliance (DA), the Minister of Trade, Industry and Competition, Ebrahim Patel, has agreed to release the list of the National Lotteries Commission (NLC) Covid-19 Relief Fund Beneficiaries to the Portfolio Committee on Trade, Industry and Competition.

This is the despite the best efforts of ANC portfolio committee members and the NLC, who have prevented this information from being made public.

According to his response, Minister Patel stated that: “The National Lotteries Commission (NLC) went out on a call for applications for Coronavirus (Covid-19) Relief Fund to the amount of R150 million and received over five thousand applications from non-profit organisations countrywide. At this stage, adjudications are underway and allocations are still being done on the R150 million to different applicants. Therefore, the process has not been completed as yet. The NLC estimates that the whole process will be completed by the second week of July 2020 (17 July 2020). Only after that date can the NLC be able to provide a list of projects funded as part of Covid-19 relief”.

This is a victory for transparency as it means that taxpayers will now be able to see how their money is being spent by the public institutions they entrust with this responsibility.

The DA will hold Minister Patel to his assurance that this information will be provided to the portfolio committee on the 17th of July 2020.

Failure to do so will result in the DA considering the appropriate legal action to ensure that this information is made public.

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Mkhize must place Eastern Cape Health under administration or accept responsibility for preventable deaths

Over the past few weeks, we have seen a systemic collapse of the Eastern Cape health system which has placed thousands of lives in mortal danger. That is why the Democratic Alliance (DA) had written to the Minister of Health, Dr Zweli Mkhize, two weeks ago, making the case for the Eastern Cape Department of Health to be placed under administration according to Section 100 of the Constitution. The pace of intervention in this province is causing more senseless loss of lives.

In an effort to escalate this matter, the DA will now include the Leader of Government Business, Deputy President David Mabuza and make the case for urgent intervention in the province.

This morning, the DA conducted an oversight inspection at Cecelia Makiwane Hospital (CMH) to see first-hand the issues which the hospitals in the province are grappling with, over and above the surging numbers of the pandemic. Issues such as chronic staff shortages, dangerous lack of oxygen supply, insufficient personal protective equipment (PPE) are only some of the key matters.

During our visit this morning we were also made aware that CMH is only operating with 2 ICU beds dedicated for Covid-19 patients. While there are plans to add 12 more ICU beds, this has yet to happen despite the rising numbers. Just this morning, it was reported that hundreds of Covid-19 test kits with patients’ details were found dumped on the N2 between East London and Mdantsane. It is unclear where these specimens came from, but this issue points to the utter chaos that is unfolding in the eastern Cape.

As I move across the Eastern Cape, it is clear that more people will lose their lives if urgent action is not taken. It is simply not enough for Minister Mkhize to send in a few people to support the province. An entire operational team is needed that will support facilities as a matter of urgency and close management is needed to prevent people from dying senselessly.

This government cannot simply ignore the plight of thousands of people in the Eastern Cape who are dying due to years of neglect of the health system. As the various parts of the country experience the crushing effects of this pandemic, every effort must be made to ensure that the system serves people as much as possible. Failure to do so is in direct contravention of the Constitution. The right to health is not being realized due to sheer state neglect.

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DA awaits report on Vrede Dairy investigation as Public Protector loses appeal.

The previous version of this statement was released without the following attachments: a soundbite by Dr Roy Jankielsohn and a copy of the Supreme Court ruling.

Last week the Supreme Court of Appeal dismissed the Public Protector’s (PP) attempt to appeal the previous High Court judgements against her relating to the controversial R350 million Gupta-linked Vrede Dairy Project investigation report. This ruling adds to the PP, Busisiwe Mkhwebane’s, poor track record in court and speaks to her inability to interpret the rule of law.

In the first case the DA took the initial investigation report under judicial review. In her judgement of 20 May 2020, Judge Tolmay found that the PP contravened the Public Protector Act and the Constitution, the very instruments that should have been used to investigate, expose and remediate the bureaucratic and political malfeasance in the Vrede Dairy Project. It is for this reason that Judge Tolmay declared that the PP report regarding the Vrede Dairy Project be “set aside and declared unlawful, unconstitutional and invalid”.

The PP attempted to obtain leave to appeal this judgement which was denied by the same court on 13 December 2019. The PP then attempted to appeal this judgement in the Supreme Court of Appeal. On 21 June 2020, Justices Wallis and Schippers of the Appeal Court dismissed this application indicating that there was “no reasonable prospect of success in an appeal and there is no other compelling reason why an appeal should be heard”.

There is no longer any reason for the PP not to finalise the investigation report and release her findings on the Vrede Dairy Project that include issues relating to both the ongoing side-lining of the rightful beneficiaries and the role of politicians in the malfeasance that took place there. The PP’s continuous legal attempts to prevent further investigation and findings on this project raise serious questions about her motives and her ability to take objective decisions in this regard.

The DA will scrutinise the final report on this project to ensure that all the controversial aspects relating to the project were investigated and that the findings correspond to this. The side-lining of beneficiaries for the past seven years remains a serious concern since not only have they been robbed of the promise of a better life, but a project of this nature cannot legitimately exist without beneficiaries. The politicians who continued to fund this project after a National Treasury investigation found substantial irregularities there soon after its initiation, and then authorised a R106 million payment to the Gupta-linked Estina company after the contract was cancelled, must be held accountable for this.

This project remains a prime example of how the ANC-run government has abused land reform projects for corrupt purposes and to benefit cronies, while emerging and subsistence farmers are robbed of improved livelihoods and left in poverty. The DA in the Free State Legislature have been vigorously pursuing justice in this project since its inception and will not rest until justice has been served.

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Department of Basic Education has no plans to employ additional teachers as more learners return to school

The Democratic Alliance (DA) can reveal that Department of Basic Education (DBE) will not be bringing in additional teachers into schools to assist in teaching split classrooms or substituting for teachers with comorbidities. And teachers will not be paid overtime for the increased workload resulting from split classrooms and absent colleagues.

In a parliamentary question, the DA sought answers from the Minister of Basic Education, Angie Motshekga, on the plans her department has in place to ensure that there are enough teachers to teach all the split classrooms of the different grades, in light of increased Covid-19 health protocols and the expected absence of teachers with comorbidities. The answer was – there are no such plans.

We heard last week how this Department’s budget has been severely cut and funds transferred to other Departments such as the Army and the Police. This is no doubt one of the results of this cut.

The Covid-19 pandemic has placed huge additional pressures on schools and teachers. With more learners expected to be phased in to schools in July and August, there is going to be an increased demand for social distancing that will result in more classrooms being split. This will no doubt require more time for teaching due to the alternate times, days, and/or weeks of attendance. In addition to this, there will be an increase in the absence of teachers with comorbidities.

The DA calls on Minister Motshekga to provide clear directives on plans to fill the gap that might be left by teachers with comorbidities, who are at a higher risk of complications if they contract Covid-19 and might be required to self-isolate.

The department therefore has a responsibility to ensure that more teachers are available in schools, to avoid causing any further burden on the teachers who are able to teach.

Last week, we heard how this department’s budget has been severely cut, and funds transferred to departments such as the Army and the Police instead of being reallocated for additional salaries of teachers or other educational needs.

The DBE is shortsighted in its planning, and Treasury should be making a budget allocation for such gaps.

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Provisional liquidation may be imminent for SAA

Six months after South African Airways (SAA) was placed under business rescue the process has not been completed and if the plan is rejected as appears imminent – SAA will be placed in provisional liquidation.

The plan, supported by the Department of Public Enterprises (DPE) requires National Treasury to confirm that it will provide funding for the new SAA. However, the spoke in the wheel of DPE and the Minister’s plans are the absence of any money set aside in Finance Minister, Tito Mboweni’s supplementary budget.

Add to this a breakdown of Minister Parvin Gordhan’s much touted Leadership Compact, involving labour and the DPE, and the road to liquidation, delayed in the vain hope that a new airline would emerge – with additional support from the fiscus after decades of bailouts –  now appears to be firmly on the cards.

The Democratic Alliance’s (DA) call for the liquidation of the bankrupt entity which predates the many additional millions spent on Business Rescue Practitioners (BRPs), consultants and subsequent bailouts appears now to be the only responsibly practicable way forward.

Years of delay and throwing good money after bad could well have been avoided if the DA’s advice was heeded – still, better late than never.

Hitherto profitable private sector players in the local aviation industry that have been severely impacted by Covid-19 would be better candidates for financial support, allowing them to fill the gap, absorb and provide skills and jobs as the sector cautiously embraces a return to some normality.

Of course, this would remove the dead hand of state control and ownership of an airline, which accounts for Minister Gordhan and the DPE’s reluctance to let go as they oppose a diversion of support to players that have more than a fighting chance to deliver sustainability and progressively expanding services as the market reopens.

The Minister has instead staked his credibility on an irrational commitment to flight a new airline out of the ashes of SAA, tarnishing his previous record at the South African Revenue Service (SARS) and his sensible opposition to attempts to embark on a costly nuclear power programme.

In doing so he has become the weak link in Treasury’s programme of reform as as two major ratings agencies warn that South Africa could be on track for further downgrades if it does not deliver on its promises to rein in debt.

It is clear that South Africa Inc is living on borrowed time and that tough decisions need to be made. The liquidation of SAA is but one necessary step. The DA will continue to make the case for pragmatic prudence in the face of fanciful forays that further falter any steps towards sustainability.

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Stabilizing our debt: the hippo in the room

The Covid-19 pandemic and the government’s mishandling of it has brought our growing debt problem to a head. How we approach it now will determine what life in South Africa will be like for generations to come. Either more and more people slip into grinding poverty, or more and more people get onto the ladder of opportunity. This is a pivotal moment in our history.

In his emergency budget speech, Finance Minister Tito Mboweni faced up to this problem: “Our Herculean task is to close the mouth of the Hippopotamus! It is eating our children’s inheritance. We need to stop it now!”

Unfortunately, he did not and could not present a credible plan to put South Africa on a path to debt sustainability and growing prosperity. Credit rating agencies are therefore more likely to move South Africa further into junk status than back towards investment grade.

We were already caught in a low-growth, high-debt vicious cycle before the government implemented the blunt instrument indefinite economic shutdown. Having dropped from 49% of GDP in 1994 to 22% by 2008, our debt was set to breach 70% in the next three years. This terrible starting point was reflected in the unemployment figures released this week which reveal 334 000 job losses in the first quarter of 2020, before the pandemic hit.

But now the cycle is that much more vicious. Collapsing tax revenues and increased spending needs have doubled the expected budget deficit (the amount by which our spending exceeds our revenue) for this year, from 7% to 15% of GDP. The result is that debt is expected to be R4 trillion, 82% of GDP, by the end of this fiscal year.

In 2020, 21c of every tax rand goes to paying back the interest on our loans. This is more than we spend on social grants, health, or policing. This number will soon surpass even what we spend on education. The hippo is indeed eating our children’s future.

The minister set out two scenarios, passive and active. On the passive path, we stay on our current trajectory with debt-to-GDP rising to 140% by 2028. This all but guarantees a sovereign debt crisis, meaning we are unable to raise any more debt. At that point, South Africa is either a failed state like Zimbabwe and Venezuela, or the IMF steps in and takes over decision-making. Either way, there’s a lot of unnecessary suffering involved.

On the active path, debt will stabilize at 87% in three years’ time and then slowly decline. This requires us to implement economic reforms that enable growth. (I have listed some of these at the end of this newsletter.) No matter how the government chooses to spin it, South Africa’s runaway debt is a direct consequence of bad policy choices. It can only be remedied by changing direction on these.

Genuine commitment and active steps to implement growth-enabling economic reform will increase our ability to pay back debt while also bringing down the cost of that debt, because lenders charge less the more confident they are that it will be repaid. Sustained economic growth is the only pathway out of poverty and towards broad prosperity in a more equal society.

Mboweni himself strongly supports economic reform. Indeed, he published a paper last year setting out these reforms in detail. His calls for reform are widely supported, including by Reserve Bank governor Lesetja Kanyago, the Democratic Alliance and other opposition parties, business organisations such as Business Unity South Africa and Business Leadership South Africa, economists, international lending institutions, and the major credit rating agencies.

Yet despite this vast weight of support, South Africa remains on the passive path to debt crisis. The few promises Mboweni did make – zero-based budgeting, restructuring Eskom – have a high risk of failing on implementation or delay.

The hippo-sized stumbling block is Mboweni’s own party. The ANC remains committed to the failed socialist ideology of state-led “development” that got us into this debt-trap in the first place. In the face of dwindling popular support, the party has been forced to appease vested interests in the ANC alliance – public sector unions and politically connected business cronies – to ensure its survival.

The public sector wage bill consumes 58c of every tax rand and this number will rise to 61c if unions have their way.

Realistically, either reformists unite to build pressure for political change, or we live the horror story that unfolds on the current dangerous and unsustainable debt trajectory.

The DA is committed to building a country that works for everyone. Financial management is measurably better where we already govern. This week, the auditor general reported that 27 out of the 30 municipalities in DA-run Western Cape achieved clean or unqualified audits. In Gauteng, the only municipality that achieved a clean audit was DA-run Midvaal.

In the end, voters need to start being realistic about what does and doesn’t work.

The DA proposes the following focus areas for economic reform:

  1. Stem the immediate bleeding by ending the lockdown and replacing it with a standard set of evidence-based safety rules and guidelines, where each regulation is directly linked to reducing the spread of covid-19. A standard set of high-impact safety rules will improve compliance and enforcement and raise economic activity. This will protect lives and livelihoods.
  2. Cut the public sector wage bill over the medium term and grow public sector productivity by: freezing wages for non-frontline workers for a three-year period; reducing head-office management staff by one third; introducing performance management systems across all sectors; appointing and promoting on performance rather than race, gender or other criteria. The money spent on salaries is crowding out productive investment in public infrastructure.
  3. Sell or shut down state-owned enterprises that are not able to survive without bailouts,and redirect the funds to service delivery and social welfare. South Africa cannot afford vanity projects such as SAA or a new nuclear build.
  4. Make electricity cheaper and more reliable for households and businesses by ending Eskom’s monopoly and opening the electricity market to competition. Municipalities must be able to buy directly from producers.
  5. Make it easier to get and create jobs by freeing up the SMME labour market. Small businesses should be exempt from the more stringent labour legislation including from agreements reached by bargaining councils.
  6. Reject investment-killing policies of EWC, NHI, prescribed assets and SARB nationalisation. Each of these policies may be well-intended, but the real-world result is to scare off investment, capital, and scarce skills.
  7. Abandon BEE system and target redress policies at disadvantage rather than race. The DA’s position paper on redress sets out the policies South Africa should pursue to remove the underlying inequalities that still exist because of past dispossession and discrimination. Abandoning BEE will make state spending vastly more efficient, which is strongly in the interest of the poor.
  8. Auction digital spectrum to bring down data costs for individuals and businesses.
  9. Reform visa regulations to enable more scarce skills to enter South Africa.
  10. Tackle corruption in the private and public sectors by establishing an independent, well-resourced corruption-busting body – effectively reestablishing the Scorpions.

Minister Nxesi must come clean on UIF imbroglio

The Minister of Employment and Labour, Thulas Nxesi, must come clean on the reasons why the Unemployment Insurance Fund (UIF) has still not opened June applications for the Covid-19 Ters benefit.

There is clearly something desperately wrong at the UIF that goes beyond mere “systems glitches”.

The Fund’s tardiness in disbursing benefits, which is having a devastating impact on the livelihoods of millions of workers and their families, raises a critical question: Is the UIF running out of money?

Last week, it was revealed that R5.7 million in UIF funds, intended for hundreds of workers impacted by the national lockdown, was paid to a single person. The money was then rapidly disbursed to friends and business associates of the recipient over the course of five days.

This instance of fraud and money-laundering, which surely required the involvement of UIF officials to succeed, is probably only the tip of the iceberg.

Most public institutions in South Africa are regarded as a private piggy bank for venal officials, and it would be surprising if the UIF were any different.

So far, of the R40 billion that was set aside for the Covid-19 Ters benefit scheme for the months of April, May and June, the UIF has paid out roughly R26 billion. Many workers have still not received their payments for April. Only about R6 billion worth of benefits have been disbursed for May, compared to R20 billion for April.

Even taking into consideration the fact that more workers would have been allowed to go back to work on full pay as the lockdown eased, this suggests there are substantial backlogs at the UIF.

A recent reply to a parliamentary question indicated that – according to the UIF’s own actuaries – if the unemployment rate peaks at 41.4% (which is likely) and Covid-19 Ters benefits cost between R48- and R68 billion, then the UIF will become financially unsound and will have to borrow money. If the unemployment rate peaks at 53.7% (which is not impossible) and Covid-19 Ters benefits cost between R48- and R68 billion, then the UIF won’t be able to pay all claims when due.

The UIF is already struggling to pay Ters on time. Minister Nxesi needs to take the nation into his confidence, announce when the applications for June benefits will open, and be honest about whether the UIF can honour its obligations.

Click here to contribute to the DA’s legal action challenging irrational and dangerous elements of the hard lockdown in court

South Africans to pay the price for Nersa’s “mistakes”

The Democratic Alliance (DA) calls on the Auditor General of South Africa to audit the National Energy Regulator of South Africa’s (Nersa) pricing and regulatory account determinations on an annual basis.

Nersa has reportedly withdrawn oppositions in two court cases against Eskom and conceded to having made mistakes in calculating tariffs for the parastatal, costing Eskom billions in revenue. In a third court case, fault against Nersa has already been determined, and the fourth case before court will likely follow suit.

Nersa’s “mistakes” will cost the South African public dearly.

The entity has become overly complicated and bureaucratic in its processes, leading to errors such as this. And once again consumers will have to bear the brunt of the burden.

Are we to trust that this was Nersa’s only mistake, or could this open the door for a review of all Nersa’s pricing determinations, spiking further increases?

South Africans can barely afford electricity prices as it is. The economy is in free fall due to the extended Covid-19 lockdown and years of state abuse. Unemployment numbers are soaring, and businesses of all sizes are closing their doors permanently. To top this all off Eskom is suggesting a price hike of 15% to recoup the loss that Nersa’s error has cost them.

Now more than ever, South Africa needs an Independent Electricity Management Operator, as proposed by the DA’s private member’s IEMO Bill, currently before parliament for consideration. This would level the playing field by creating an independent grid operator, which would be at liberty to purchase from all generation sources (including Eskom and independent power producers) at market related rates.