3 significant changes proposed for South Africa – including restructured elections and easier access to pension funds

Government announced a number of planned policy changes for South Africa this week, as the country faces the coronavirus pandemic and a growing fiscal crisis.

While some of these changes have been in the pipeline for a number of years as part of the ANC’s existing policy plans, this week saw a more formal commitment by the government to look at and formally introduce these changes going forward.

These changes are outlined in more detail below.


Voting

On Tuesday (7 July), the Electoral Commission of South Africa (IEC) said that it is considering the introduction of electronic voting in an effort to increase efficiencies in the elections process in South Africa.

Presenting to a parliamentary committee on Tuesday (7 July), chief electoral officer Sy Mamabolo indicated that ‘e-voting’ was still in the early stages of consideration and would first be trialled as part of a pilot project.

“In order to increase efficiencies in the electoral process and to ameliorate intractable challenges especially in the counting and capturing of results, the commission has proposed an e-voting pilot project.

“The foremost consideration in the use of technology is to drive down the costs of elections and increase operational efficiencies.”

The idea is supported by the ANC, which is pushing for the introduction of ‘alternative voting methods‘.

The ANC is also considering the ‘desirability of synchronisation’ of elections at national, provincial and local spheres of government, as well as the desirability of introducing elements of constituency-based representation at national and provincial spheres.


Pensions and prescribed assets 

On Tuesday, parliament’s standing committee on finance published its full report on South Africa’s special adjustment budget and revised fiscal framework.

The majority in the committee said that there should be more engagement on the feasibility of prescribing assets for pension funds and will request a presentation by the Financial Sector Conduct Authority (FSCA) and National Treasury on this at a future meeting.

While the Democratic Alliance opposed the idea, the governing ANC has expressed its support for changes to be made to regulation 28 of the Pensions Funds Act to enable ‘cheaper access’ to finance for development.

“While working to restore fiscal stability, SA needs to deploy macroeconomic policy instruments compatible with economic reconstruction. Reconstruction programmes must be sufficiently financed and financially sustainable,” said ANC secretary-general Ace Magashule.

“The mobilisation of funds for increased investment in infrastructure and key productive sectors, will inevitably require a combination of public and private resources.”

On Friday (10 July), Bloomberg reported that the ANC is looking to use pension funds take over some of the assets at Eskom

The proposal to transfer parts of Eskom into non-state hands was made in a discussion document dated 8 July, which considered responses to the coronavirus-induced economic slump.

“There is a need for continued support for Eskom to overcome its immediate financial and technical challenges and to ensure reliable electricity supply,” the ANC’s economic transformation committee said in the document.

“A solution needs to be found to Eskom’s debt problem, including the possibility of pension funds being mobilized to take over certain restructured Eskom assets.”


Grants

On Wednesday, the Department of Social Development sayid that the introduction of the R350 Covid-19 Social Relief of Distress (SRD) grant has revived discussions of a basic income grant in South Africa.

Presenting in a parliamentary committee meeting on Wednesday (6 July), the department that the SRD Grant will be paid for six months, but the demand for income support for the unemployed and those who have lost their jobs will go beyond this period.

“To address this, the Department is working on policy proposal on the feasibility of income support to South Africans between the ages of 18-59 who have no income support.

“This is a result of the introduction of the Special Covid-19 SRD grant that has revived the discussion of the feasibility of a Basic Income Grant (BIG) as was recommended by the Taylor Report in 2002,” the department said.

The ANC’s social and economic transformation committee sail it also will meet to look at the feasibility of a basic income grant, including its costing and financing.

“Although these measures made a difference, given the devastating economic impact expected as the pandemic unfolds, we must look at additional measures to broaden the social safety net and provide for the dignity of all South Africans,” Magashule said.


Other changes 

Many of these above changes were discussed directly by ANC at its virtual sitting of the National Executive Committee (NEC) between the 27-28 June 2020.

Some of the other policy changes which were discussed include:

  • Stricter rules around the sale of alcohol;
  • Harsher punishments for criminals found guilty of committing gender-based violence;
  • Further supporting of local government structures.

Read: Some South African insurers are trying to dodge paying out for lockdown losses

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3 significant changes proposed for South Africa – including restructured elections and easier access to pension funds