ANC economic policy chief, Enoch Godongwana, has outlined some of the key aspects of the party’s draft economic recovery plan – including the use of prescribed assets and pensions.
Godongwana said via webinar on Monday (17 August) that the party is moving away from the use of prescribed assets, and is instead focusing on changes to regulation 28 of the Pension Funds Act.
The regulation currently limits the extent to which retirement funds can invest in particular assets or in particular asset classes. The main purpose is to protect the members’ retirement provision from the effects of poorly diversified investment portfolios.
“We are moving from an environment from where there is no enforced prescription, but you create an environment where trustees can invest in infrastructure profits as long as these projects are profitable,” Godongwana said on the party’s Progressive Business Forum.
“I want to dismiss and debunk the claim that we want to utilise the pension funds to bail out collapsing state-owned enterprises. The latest theory is that we want to (use the pensions) to fund the state bank.”
Godongwana said that these were ‘mischievous’ claims, made with the intention of discrediting the ANC’s argument. “That’s not where we are at the moment,” he said.
The Sunday Times reported that changes to regulation 28 are included in a new economic reconstruction and recovery plan drafted by president Cyril Ramaphosa’s cabinet.
The document indicates that regulation 28 of the Pension Funds Act will be amended to unlock the funding of long-term infrastructure projects and high-impact capital projects.
It will also facilitate direct access to pension funds’ pool of resources by state development finance institutions.
Explaining the ANC and government’s push to infrastructure development, Godongwana said that 54% of the country’s unemployed currently have a matric or less.
“What that means is that your labour force is not necessarily skilled. Construction has got the capability to absorb a number of the unemployed – but not all.
“It also has ‘multiplier effects’ in a number of sectors, for instance, the engineering industry.”
Godongwana said that this push towards infrastructure development is unlikely to help boost the country’s exports, but will instead stimulate domestic demand for jobs.
Minister of Public Works and Infrastructure, Patricia de Lille, says that government plans to build more than 50 special infrastructure projects to boost jobs in the country.
De Lille said that the first 50 projects of the programme and an additional 12 Special Projects were gazetted on Friday 24 July 2020 as Strategic Integrated Projects (SIPs) in terms of the Infrastructure Development Act.
On the issue of land, Godongwana said that the party is focusing on three areas:
- There is a large amount of state-owned land at a national and provincial level which should be released as a matter of emergency;
- If there is any land shortages there is nothing that will stop any government across the world, from exercising its right, subject to compensation. Godongwana noted that the Constitution states that this has to be ‘fair and equitable’ but does not have to be method-based;
- We should not allow people to keep land for speculation. Land that is kept for speculation should be heavily taxed.
In July, National Assembly agreed to re-establish the multiparty committee to initiate and introduce legislation amending Section 25 of the Constitution.
The Committee was first established on 25 July 2019 to clarify parts of the Constitution that allow for the expropriation of land without compensation as a legitimate option for land reform to address the historic arbitrary land dispossession of the majority of South Africans.
However, the outbreak of the coronavirus affected the committee’s programme, and its term expired on 29 May 2020 before it could complete its mandate.
The committee has been given until 31 December 2020 as the deadline by which to report back to the house.
Government published a draft land expropriation bill for public comment in December 2019. President Cyril Ramaphosa has previously said that South Africa must finalise its land expropriation policy in 2020.
“This year we are going to have to finalise the legislation and the constitutional construct on the land question,” he said at a conference in January.
“One of the things we have been asking for is the business community to come forward with solutions of resolving the centuries-old problem of land,” he told the country’s largest business lobby group. “I would like to see the business community taking this issue up rather more seriously.”