Fatally flawed labour bills promise jobs bloodbath

The DA today voted against the Basic Conditions of Employment Amendment Bill, the National Minimum Wage Bill, and the Labour Relations Amendment Bill in the National Assembly.

The DA has been very clear during deliberations on these bills in the Portfolio Committee of Labour that the bills have not been subjected to proper public consultation and will push hundreds of thousands of people into unemployment.

Indeed, many provisions contained in the Labour Relations Amendment Bill, specifically, are a significant departure from what had been agreed to at National Economic Development and Labour Council (Nedlac), an objection raised by many labour unions during committee deliberations.

Nedlac was created as the “vehicle by which Government, labour, business and community organisations will seek to cooperate, through problem-solving and negotiation, on economic, labour and development issues”, but the ANC has reduced this important forum to just another talk shop in its unseemly haste to deliver on the unachievable promises made by President Cyril Ramaphosa during his State of the Nation Address (SONA).

The voice of organised labour and business has been silenced through this side-lining of Nedlac. This is to say nothing of the voices of South Africa’s 9.5 million unemployed which have never been heard in the discussion over national minimum wage.

As a consequence, the labour bills will take away labour unions’ right to collective bargaining, replacing it with Ministerial discretion on recalling sectoral minimum wages that have been meticulously negotiated over years. Furthermore, the labour bills will give the Department of Labour extensive enforcement powers to deal with transgressions and non-compliance, but without any concomitant plans to capacitate an already under-resourced Department and its entities.

There is little point in passing legislation knowing full well that implementation is impossible. It is inexcusable that the proposed bills have not been subjected to a thorough social-economic impact assessment. National Treasury concluded, in 2016, that the bills will result in some 715,000 job losses and a 2.1% economic contraction. The real number of job losses is certain to be even higher.

The labour bills currently before Parliament are the most important changes to South Africa’s labour regime in more than two decades. The process cannot be rushed and should be subjected to proper public participation, feasibility studies and detailed modelling on the anticipated job losses. The DA will continue to fight for those who have been excluded. These bills in their current form do little to improve the labour market, instead will contribute to massive job losses.

Government must fulfil its mandate of providing scholar transport to all learners that need it

Please find pictures attached here, here and here.

Today, DA Shadow Deputy Minister of Basic Education, Nomsa Marchesi MP, accompanied by DA Member of the Basic Education Portfolio Committee, Sonja Boshoff MP, Provincial Spokesperson on Education, Jane Sithole MPL, and Provincial Spokesperson on Public Works, Roads and Transport, Bosman Grobler MPL, walked with learners to Lugebhuta High School in Schoemansdal, in Mpumalanga’s Nkomazi Local Municipality, to highlight their daily struggle of getting to school.

The lack of effective scholar transport in this country is an indictment of the ANC government. The fact that in 24 years of democracy, there are learners who are walking long distances just to get an education, is an injustice.

Learners walking these distances are unable to concentrate in class as they are often left exhausted.

The learners that the DA visited today, have to wake up as early as 05:00 and walk 7.8km to get to school on an empty stomach.

The route they take crosses a dangerous stream, which is life-threatening when it rains. The alternative route is 9km long and includes an extremely busy provincial road. Learners from Legebhuta High School often fall prey to criminals and their lives are endangered daily. Simply put, these learners’ ability to access an education is being inhibited.

The standard of safety across schools in South Africa is grossly unequal and conditions at many schools, especially those in rural areas, are appalling. The National Government seems to have no plan to turn the situation around. The DA has repeatedly called on President Cyril Ramaphosa to prioritise safety at schools, yet no action has been taken.

Children need to be in safe environments at all times and denying them scholar transport equates to denying them safety. We therefore urge the National Treasury to stop cutting provincial budgets as this compromises our children’s access to education and safety. We also call on provincial governments to ensure they are allocating enough money to education. This includes scholar transport as our responsibility to keep our children safe is not limited to the classroom.

A DA-led government would not allow provincial governments to endanger children by failing to provide scholar transport to children who walk long distances to school. The ANC must prove that it takes children’s safety seriously by ensuring all children that need scholar transport have access to it.

SAA saved from the brink of liquidation by a ‘commitment letter’

The National Treasury Director General (DG), Dondo Mogajane, stated emphatically in parliament that the funding for SAA would not come from government or taxpayers.

However, the existence of a “commitment letter” has emerged which, according to the SAA CEO, Vuyani Jarana, contains a commitment by National Treasury to “inject capital”. This seems to indicate that government will provide the required funding of R 21,7 billion to SAA.

It has been reported that, it is through this “commitment letter to inject capital” provided by National Treasury to SAA, that has made it possible to persuade banks to lend SAA R 5,0 billion.

The “commitment letter” seems to constitute some sort of ‘guarantee of the guarantee’.

There is a question as to whether Cabinet is aware of the “commitment letter”, exactly what the contents of the letter are and what the implications for the national budget are?

We believe that the contents of the “commitment letter” could have massive implications for the budget and I will therefore submit a PAIA application to obtain a copy of the “commitment letter” that the SAA CEO refers to in his media comments.

SAA and National Treasury must explain why bailout money continues to be squandered

The DA will call for a full disclosure on the status of funding for South African Airways (SAA) and why Parliament was possibly misled by the National Treasury, following a report in the media that SAA has again run out of cash and will receive a bailout of R5 billion – its third cash injection in just one year.

On 8 May 2018, National Treasury Director-General Dondo Mogajane informed the Standing Committee on Finance in Parliament that the R5 billion cash requirement that SAA CEO Vuyani Jarana had told the committee on 24 April 2018 was needed by SAA would not come out of public funds but would be sourced from either lenders or private equity.

The DA has repeatedly tried to get answers from the National Treasury and SAA about the cash position at the embattled airline. These enquiries have been repeatedly dismissed on the basis that the information is sensitive and would badly affect SAA’s ability to operate in a very competitive market.

Once the R5 billion is paid to SAA, there will have been a total of R15 billion in bailouts to SAA. On top of this, the SAA turn-around plan only envisages a break-even in 2021, after losing approximately R12 billion over the next three years.

It is patently obvious that SAA has become a major risk to South Africa’s sovereign ratings. It is simply irresponsible for the Finance Minister to continue to bow to political ideological pressure to not put SAA into business rescue and then privatise it.

It is verging on treason for the Minister to continue to put South Africa at risk without the authority of parliament.

A staggering R800 000+ blown on “intercontinental shopping trips” for Norma Gigaba by National Treasury

The former Minister of Finance, Malusi Gigaba, who was responsible for the implementation of cost containment measures, and who regularly called for greater efficiency in the use of public funds, should have set an example when it came to belt-tightening in South Africa.

However, it has now emerged [see reply] that a staggering R873 366.68 was blown on international travel for the minister’s spouse, Norma Gigaba, who accompanied him on investor roadshows to the financial capitals of the world inter alia in China, the United Kingdom and the United States.

The fact is Norma Gigaba had no official duties on the investor roadshows and taxpayers, who have been pushed to the limit by tax increases, should never have had to cough up for what were, in reality, a series of intercontinental shopping trips.

In the end, even if the expenses are in line with the guidelines set out in the Ministerial Handbook it was simply wrong and the minister should do the right thing and “pay back the money” to National Treasury.

Treasury must intervene in SASSA disaster

The DA notes with concern that the Minister of Social Development, Susan Shabangu, has suspended efforts by the South African Social Security Agency (SASSA) to find a new service provider for the cash-payments portion of the social grants.

Grant recipients have been held hostage by the Department of Social Development for too long. The latest decision by the Minister follows a disastrous tenure by former Minister Bathabile Dlamini who single-handedly, on more than one occasion, forced the Constitutional Court to extend an invalid contract with Cash Paymaster Services (CPS). The depth of the maladministration and institutional corruption left by Bathabile Dlamini knows no bounds and it is evident that Minister Shabangu is out of her depth in dealing with the destruction and chaos in the Department.

The latest development will, in all likelihood, delay the appointment of a new fully operational cash-provider by the end of September 2018. This flows from the Minister stating in court papers that the tender process was technically flawed and had to be restarted.

It was further revealed that the terms of reference for the tender had been returned to SASSA’s bid-specifications committee on three occasions to make amendments and to seek clarity. It is very suspicious and shocking that when it came to the actual tender there was a lack of clarity and inadequate information, specifically around the number of beneficiaries to receive services, making it impossible for bidders to enter a successful bid.

It is unthinkable that a Department that cannot even draft a proper tender document is responsible for ensuring that 17 million people receive their grants every month. It is clear that the Minister of Social Development, like her predecessor, has no respect for the highest court in the country, and that she and her Department are not capable of effectively managing the procurement process. We therefore reiterate our calls for Treasury to take over the payment function from SASSA, as the agency has become compromised under the toxic rule of the ANC.

The Constitutional Court has for far too long been a playground for Ministers who have no regard for the law or the vulnerable South Africans that depend on social grants.

The Minister continues to rely on self-made emergencies to keep the CPS contract in place, holding social grant beneficiaries to ransom. It is crucial that Treasury intervenes before another deadline is missed and the Constitutional Court is forced to yet again extend the invalid and dubious contract with CPS.

Treasury tells Parliament that 15 municipalities are still at risk to VBS Bank scandal

In a presentation to Parliament’s Portfolio Committee on Cooperative Governance and Traditional Affairs yesterday, National Treasury revealed that 15 municipalities are still exposed to the VBS Mutual Bank scandal. These include some of the worst run and most financially unstable municipalities in the country.

It has become increasingly clear that VBS was being run as a pyramid scheme, whereby short term deposits from municipalities were utilised to fund long term loans. The bank seemed to have particularly targeted financially distressed municipalities, with weak internal controls and poor municipal governance to attract their deposits.

The Vhembe District Municipality, for example, is exposed to the amount of R311 million, or 34.57% of their annual operating revenue. The Greater Giyani Local Municipality is exposed to the amount of R158 million, or 52.27% of their annual operating revenue. A full list is available here.

Current forensic investigations indicate that VBS was using lawyers to “facilitate” municipal deposits, in contravention of Section 7(3) of the Municipal Financial Management Act.

The DA will be seeking to determine who these lawyers were, and what the nature and purpose of such commissions was. Given that the deposits were themselves illegal, we will be exploring options to have these lawyers disbarred for promoting an illegal activity.

The DA will also be writing to the Chairperson of the Portfolio Committee Cooperative Governance and Traditional Affairs to request that each of the affected municipalities are invited to Parliament to report on what contingency plans they have in place to fund their activities, and what disciplinary action or other consequences they have initiated against municipal officials and public representatives involved in this matter.

It is unconscionable that these municipalities have played fast and loose with municipal funds, intended for service delivery and the upliftment of residents.

PIC does a stunning “about turn” on transparency

The National Treasury, Public Investment Corporation and Government Employees Pension Fund have done a stunning “about turn” and decided to oppose a provision aimed at promoting transparency in the Public Investment Corporation Bill [B1-2018], which is currently before Parliament.

The Public Investment Corporation Amendment Bill [B1-2018] is a Private Members Bill, submitted by myself on 17 January 2018, which proposes to amend existing legislation inter alia by inserting the following clause:

Amendment of section 10 of Act 23 of 2004

1. Section 10 of the principal Act is hereby amended by the addition after subsection (2) of the following subsection:
‘‘(3) A report reflecting all investments of deposits, whether listed or unlisted, must annually be
(a) submitted to the Minister for tabling with the annual report of the department; and
(b) published on the website of the corporation.’’

The Public Investment Corporation Amendment Bill [B1-2018] effectively “legislates” the convention which began on 18 October 2016 when former Deputy-Minister of Finance, Mcebisi Jonas, finally agreed to disclose detailed information about “unlisted investments” made by the Public Investment Corporation.

However, a memorandum outlining the National Treasury, Public Investment Corporation, and the Government Employees Pension Fund’s response to the Public Investment Corporation Amendment Bill [B1-2018], states that:

This proposal is not supported. The PIC as asset manager should not be compelled to disclose information about another entity, i.e. its clients and that are also the assets owners (e.g. the GEPF) without consent.

This is a major setback for the campaign for greater transparency at the Public Investment Corporation, which is responsible for investing R1.928 trillion on behalf of its clients, most importantly the Government Employees Pension Fund.

We now need to know:

• whether the Minister of Finance, Nhlanhla Nene, was consulted and authorized the move to oppose proposals contained in the Public Investment Corporation Amendment Bill [B1-2018] providing for more transparency at the Public Investment Corporation; and
• why the Government Employees Pension Fund, which is responsible for managing the savings of tens of thousands of public sector workers, can explain why it does not want information about investments, made on its behalf by the Public Investment Corporation, to be disclosed to Parliament?

In the end, it is imperative that particulars of investments, especially “unlisted investments”, be disclosed because the expectation that the information will be disclosed, is a major disincentive to “rent seekers”, with political influence, who may want to raid the Public Investment Corporation.

That is why:

• we will submit a parliamentary question probing whether the finance minister was consulted and authorized the department to oppose proposals, contained in the Public Investment Corporation Amendment Bill [B1-2018] providing for more transparency at the Public Investment Corporation; and
• we will not back down and will continue to fight for more transparency so that the Public Investment Corporation does not become a “piggy bank” for the governing party in South Africa.

Budget cuts don’t reflect our service and spending performance

The decision by the National Treasury and Department of Human Settlements to cut the Urban Settlements Development Grant (USDG) to the tune of R540 million in the DA-run metros of Cape Town and Johannesburg has nothing do with poor spending performance as earlier reported.
The USDG funding is used to upgrade informal settlements and services with the aim to eradicate the housing deficit by placing more focus on metros as the centres of economic growth. It is important to emphasise that USDG funding is used for service upgrades in informal areas too, not just housing.
Both the City of Cape Town and the City of Johannesburg submitted detailed plans showing how the funds would be spent in the current financial year.
It is disappointing that this crucial grant has now been taken away before the City of Cape and Johannesburg could execute their plans on how they intended to spend this money for improving the quality of life of residents who still don’t have the dignity of owning a home.
In  the City of Cape Town particularly, the decision to withhold R176 million of the USDG had nothing to do with the City’s spending performance. The City received a notification in June of a proposal to withhold R278 million of its USDG allocation, which was way before the commencement of the City’s financial year.
Further, in November 2017 the City received another notification of a proposal to withhold R175, 8 million of its USDG.
The City of Johannesburg was given 14 days in which to respond to the notice to withdraw this vital funding. The City submitted an extensive motivation detailing how the remaining budget would be fully allocated and spent in the current year and motivated how spending would improve for the remainder of the financial year.
The City of Johannesburg has improved its USDG expenditure quarter on quarter in the current financial year and even improved expenditure performance compared to previous financial years. That should have been an indication to Treasury of the City’s ability to spend grant funding.
Both the City of Cape Town and Johannesburg have demonstrated that they have fully allocated their USDG funding and that they have plans in place to fully spend it.
The DA believes that these cuts are an overreach given that both metros have detailed plans indicating how they would fully utilise the allocated budgets. The National Treasury and the Department of Human Settlements should have given both metros the opportunity to put those plans into action.
It’s worrisome that the City of Johannesburg’s spending trends have been impacted on severely by suspensions and or dismissals initiated upon discovering the levels of corruption there.
This decision by the National Treasury to cut these crucial grants to the metros of Johannesburg and Cape Town will only serve to hurt the poor more.
The grant cuts are unfortunate and will severely impact the capacity of these metros to deliver much-needed housing to people.
The DA holds our governments to a high standard. We expect nothing less than putting the people who rely on our governments first by delivering clean and efficient service delivery and will continue to do so.

ANC rejects DA resolution to block VAT increase

The ANC today really showed how little they care for the millions of poor South Africans and the 9,2 million unemployed South Africans when their members of the Standing Committee on Finance rejected a resolution from the DA to amend the 2018/19 Fiscal Framework by rejecting the R22,9 billion 1 percentage point VAT hike and reducing Expenditure by R 22,9 billion.
While the ANC might have blocked the scrapping of VAT in committee, today DA Leader Mmusi Maimane led thousands of South Africans on an anti-VAT march to National Treasury in Tshwane where a memorandum was handed over to Treasury officials. In addition to this march, South Africans continue to express their objection by signing the VAT petition launched by the DA.
There is no need for the 1,0% VAT hike to punish the poor for the maladministration of the ANC as well as for the rampant state corruption over the past nine years. The DA pointed out that instead of increasing the VAT it would be entirely possible to cut the equivalent amount out of the bloated expenditure budget:
• Reduce the number of ministries to 15 with a R 122,0 million savings.
• An additional 6% reduction on all mandatory cost containment items with a R 5,3 billion saving.
• Freeze public office bearers salaries with a R 547,0 million saving.
• Freeze public servants salaries and performance bonuses with a R 50,0 billion saving
The DA also pointed out that there were assets that could be sold:
• Telkom shares with a market value of about R 7,0 billion.
• Broadband spectrum that could realise R 20,0 billion.
• Unused and unneeded State-owned land that could easily realise R 6,0 billion.
The DA will continue to fight against the increase of all taxes and VAT in particular at every step of the budget legislative process.