On 16 November 2020, we submitted comments on the South African Reserve Bank (SARB) Act Amendment Bill (Bill) wherein we set out on a high level our reasons for not supporting the proposed Bill.
We are of the view that the Bill introduces unnecessary risk to the country, to sustainable jobs intensive employment growth and the cost of funding for businesses; and is also unconstitutional. On 18 November 2020, we made an oral presentation of our submission before the Parliamentary Standing Committee on Finance.
Our main concerns with the Bill are that, first, changing the governance structure and thus nationalising the SARB will negatively affect the SARB’s credibility, South Africa’s monetary policy approach and its excellent standing in the world.
We believe that this is a risky move with no meaningful benefit. This risk is exacerbated by the creeping state control and failures that we are experiencing as a country.
Second, we have legal concerns with the proposed Bill. The SARB shares are a form of incorporeal property. Shareholders have subscribed for the shares and contributed to the capitalisation of the SARB.
It seems that section 22 of the SARB Act contemplates that shares in the SARB can be bought and sold and section 24(e) contemplates the payment of dividends to shareholders. Subsequently, shares in the SARB may have a value in the market.
Repealing section 22 of the SARB Act, in its entirety, would effectively amount to an expropriation without compensation of the shares in the SARB. In our view, this expropriation would be unconstitutional for want of compliance with section 25(2)(b) of the Constitution of the Republic of South Africa, 1996.
Employment Equity Act Amendment Bill
The Minister of Employment and Labour published a notice stating that the Employment Equity Act Amendment Bill (EEA Amendment Bill) will be tabled in Parliament, however, the version that has been published for Parliamentary tabling is significantly different to the one that was published for public comment in September 2018. On 12 November 2020, BUSA hosted a meeting to discuss a way forward in light of the difference in the versions of the EEA Amendment Bill.
As a consequence of the abovementioned difference, the BUSA position, in some parts, is no longer relevant. There is, therefore, a need to revise the position. Although the commencement date of the Parliamentary processes has not been confirmed, the BUSA office has resolved to finalise the business position ahead of the processes commencing.
The EEA Amendment Bill that is currently before Parliament has 2 issues, being that: (1) there seems to be an omission in relation to the consultation process, which currently excludes extensive sector consultation with regards to the prescribed targets; and (2) section 42 – the proposed amendment to section 42(1)(Aa) by the business constituency during the NEDLAC engagements (which was supported by labour) was not accepted by government.
Essentially, the crux of the business position is that the targets set in the Bill need to be set according to the capacity of our respective sectors and the non-compliance provisions in this regard should be revisited. It was agreed that a smaller BUSA working group will revise the business position.
National Health Insurance (NHI) Bill
On 3 November 2020, BUSA convened a meeting to discuss a way forward in relation to the NHI business position. It was agreed that the BUSA position needs to be amended to account for our experiences during the COVID-19 pandemic, and our fiscal constraints. It was agreed that a smaller working group will review and redraft the BUSA position to align it with the COVID-19 experience and to propose a sustainable way forward.
It is important to note that BLSA had submitted a separate NHI position paper, to accompany the BUSA position and add to the business position. Going forward, we will proceed on a joint basis with BUSA and provide input on the revised joint NHI business position.
COVID-19 Related Documents
All the documents that have been circulated by the BLSA Policy and Legislation Department, for information, during the national lockdown may be accessed at the following link: https://www.dropbox.com/sh/jzb49q0dtgia599/AAAcxjEHDPR7tZlSUfV1TOKLa?dl=0