GOING FORWARD …

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CHANGING TACK …

This site provides reliable, accurate information on public policy and law-making issues of concern to ordinary South Africans. The mainstream media tends to sensationalise new developments out of context. Journalists rarely if ever take time to read the documents available to them or to develop a sound understanding of new policy and legislative proposals. As a result, misinformation abounds.

Until recently, the site was used for archived articles published in Legalbrief Today under Policy Watch. It was linked to Twitter alerts designed to promote the product. That has changed. In future, information posted here will draw on the author’s observations in Parliament but will not replicate Legalbrief Policy Watch articles, unless otherwise explicitly stated.

The author’s observations will not include personal opinions but will focus on facts supported with documentary evidence cirulated by Parliament itself. That said, they should not be construed as representing the views of Juta Law, which publishes Legalbrief Today and CompliNEWS – to which the author continues to contribute as an independent contractor.

The site is not designed to field comments or answer questions. Its purpose is to make reliable information on contentious issues freely available. With that in mind, for the foreseeable future it will focus on:

  • national health insurance (NHI)
  • land expropriation without compensation (EWC)
  • debt relief
  • prescribed assets
  • the role of the South African Reserve Bank
  • hate crime and hate speech
  • cyber security.

The site will be updated only when new information on these topics becomes publicly available. If nothing has been posted recently, it is more than likely that no new information has been officially released by Parliament or government. The author does not have access to any other reliable source material on public policy developments and does not use unsubstantiated mainstream media reports.

HOW ‘TRANSPARENT’ WILL THE NHI BILL’S PARLIAMENTARY PROCESS BE?

This article appeared in the 30 August edition of Legalbrief Today, under Policy Watch

An opinion document on the constitutionality of the National Health Insurance (NHI) Bill presented orally to members of the National Assembly’s Health Committee before a briefing from Health Minister Zweli Mkhize was withheld from journalists – despite reportedly having been made available for copying and public circulation well before the meeting. Prepared by the Office of the State Law Adviser and read verbatim to the committee by acting head Ayesha Johaar in the presence of media representatives and health sector stakeholders, the document was only distributed to committee members after lunch, by which time Johaar had left. Her presence at the meeting was apparently requested at surprisingly short notice. When the morning session ended and committee chair Sibongiseni Dhlomo was approached for permission to make copies available to members of the public, he declined – claiming not to have seen or read the document.

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Why Dhlomo adopted this stance is not clear. Underpinned by provisions in sections 27 and 146(2) of the Constitution, as well as sections 3 and 25 of the 2003 National Health Act, Johaar’s opinion is that the Bill is ‘constitutionally sound’. Section 27(1)(a) of the Constitution makes access to health care services a universal right. Section 146(2) spells out the conditions in which national legislation uniformly applicable ‘to the country as a whole’ prevails over provincial legislation. Section 3 of the Act deals with the responsibilities of the Minister, the national department, provincial departments and local authorities in providing healthcare services. Section 25 sets out the general functions of provincial departments in that context.

A committee media statement issued two days before the briefing – refuting allegations that the Bill had been ‘suspended’ because of concerns about its constitutionality – also noted that, having met ‘one of the state law advisers’ to discuss the matter, Dhlomo was ‘comfortable’ with the advice he received. Johaar is the adviser to whom he was referring. However, widely publicised reservations by some stakeholders about government’s capacity to fund NHI, manage it financially and deliver quality services – not to mention speculation about the future role of medical schemes – may explain Dhlomo’s obvious distrust of media representatives. This is especially given the extent to which some journalists tend to sensationalise issues without scrutinising the documents on which they report. The indignant tone of DA Evelyn Wilson’s input during the meeting probably did little to smooth already ruffled feathers. She has much to learn from party colleagues Siviwe Gwarube and Haseena Ismail, whose equally candid approach was noticeably more deferential.

Against that backdrop, the Minister, his deputy Joe Phaahla, Health Department DG Precious Matsoso, deputy DG Anban Pillay, presidential adviser Olive Shisana, NHI office head Nicholas Crisp and other departmental officials fielded an avalanche of questions about the Bill and NHI in general from the DA, FF Plus MP Philippus van Staden and the EFF’s Naledi Chirwa – but did little to assuage their fears. Neither the model to be used in implementing NHI nor the mix of options available to fund it are cast in stone. However, conceding that government ‘will need to invest strongly’ in improving the standard of public healthcare services and facilities, Mkhize said that, where there is evidence of ‘neglect’ it ‘must be corrected’. ‘We are at such a low level of quality that we will have to fight hard to improve it,’ he told the committee, referring to NHI as a ‘vision’ and an opportunity to ‘up the game’. According to Pillay, the need for ‘robust’ monitoring and evaluation was simply confirmed by the pilot phase.

In the Deputy Minister’s view, while NHI promises to be a ‘disruptive intervention’ – especially for the 15% of citizens able to afford private healthcare – ‘fear of the unknown’ cannot be allowed to prevent government from moving forward with plans to honour not only its constitutional obligations but also binding international commitments. While Phaahla did not elaborate on the role of medical schemes under the NHI system and little was said on the issue, Pillay confirmed that it will be spelled out in regulations. References by Shisana to presidential health compact partnerships and by Crisp to the introduction of NHI as ‘a journey, not an event’ were vague – tending to point to a long road ahead, albeit with ample opportunities for public consultation. Funding proposals will be the focus of a separate draft money Bill.

THE 2019 NATIONAL CREDIT AMENDMENT ACT, UNPACKED

This article is based on one that appeared in the 20 August edition of Legalbrief Today, under Policy Watch

The controversial, recently gazetted 2019 National Credit Amendment Act – paving the way for the introduction of long-term debt intervention measures for qualifying consumers but not yet in force – has sparked outrage in some quarters, mainly because of provisions perceived to constitute the deprivation of property (Business Day). However, according to an opinion sought from Advocate Wim Trengrove by former members of the National Assembly’s Trade & Industry Committee, while the Act does indeed allow for this, the provisions in question do not amount to the arbitrary deprivation of property and are therefore ‘permissible and lawful under section 25(1) of the Constitution’. The version of the Bill on which Trengrove’s opinion was sought was later revised to address other issues he raised at the time.

Once operational, the new piece of legislation will provide not only for the ‘suspension or part-suspension of a credit agreement’ and ‘an alteration or extension of that suspension’, but also for ‘the extinguishing of the whole or a portion of the total of the amounts contemplated … under a qualifying agreement’. This is according to the committee report that accompanied the Bill to the House for a second reading. The term ‘debt intervention applicant’ will refer to anyone whom – at the time of applying – either receives no income at all (or whose monthly income during the preceding six months was less than R7500) and whose total unsecured debt does not exceed R50 000. When deemed appropriate, the Minister concerned will have the power to review and adjust these caps.

In addition, once in effect the new statute will require debt counsellors to report to the National Credit Regulator ‘any suspected reckless credit agreements’ identified when an over-indebted consumer applies for debt review; empower Magistrates’ Courts to lower the rate of interest, fees or other charges under credit agreements as a debt rearrangement measure; and enable the introduction of regulations for ‘targeted credit life insurance for all unsecured credit’, capped ‘lower than … existing insurance’. New enforcement measures will make it a criminal offence to intentionally misrepresent information when applying for debt intervention; engage in prohibited conduct in respect of credit agreements; and not to register as a credit provider, credit bureau, debt counsellor, payment distribution agency or alternative dispute resolution agent. Both the National Credit Regulator and National Consumer Tribunal ‘will require additional capacity’ to process the number of debt intervention applications likely to be made once these measures are in force. With that in mind, now that the Act has been gazetted, the necessary plans and related funding requirements can be finalised.

NHI BILL CONFIRMS LIMITS TO ‘UNIVERSAL’ QUALITY CARE

This article is is based on two that appeared in the 12 and 15 August editions of Legalbrief Today, under Policy Watch

Once in force, the National Health Insurance Bill tabled last week in Parliament is expected to facilitate universal access to ‘needed health care that is of sufficient quality to be effective’ – and ‘financial protection’ from its costs. This is according to a memorandum on the Bill’s objects. However, in expanding on this, clauses 4, 5 and 7 of the Bill (respectively dealing with population coverage, user registration and health care services coverage) point to distinct limitations. Together, sub-clauses 4(4), 5(1) and 7(2)(e) make it very clear that only public and private health care facilities accredited over time by the fund will be available to registered fund users. Registration will not be compulsory. In addition, sub-clause 7(2)(e) requires the fund to ‘enter into contracts with accredited health care service providers and health establishments at primary health care and hospital level based on the health needs of users and in accordance with referral pathways’. This tends to suggest that private health care practitioners and facilities will be able to choose whether to contract in or out of the NHI system – at least at this stage of the process.

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Regarding the role of medical schemes, clause 33 implies that – in the context of sub-clauses 4(4), 5(1) and 7(2)(e) – ‘once NHI has been fully implemented’ registered fund users who are also members of medical schemes will only be eligible for ‘complementary cover’ for ‘services not reimbursable by the fund’. Furthermore, sub-clause 39(1) clearly states that health care service providers and health establishments accredited by the fund will be required to deliver ‘services at the appropriate level of care to users who are in need and entitled to health care service benefits that have been purchased by the fund on their behalf’. This is noting that, according to sub-clause 57(1)(b), NHI ‘must be gradually phased in using a progressive and programmatic approach based on financial resource availability’.

According to the memorandum on the Bill’s objects, ‘in a favourable economic environment’, ‘new taxation options’ for the fund will be considered. In this regard, the Bill’s clause 49(2) refers to the ‘reallocation of funding for medical scheme tax credits’, ‘employer and employee’ payroll tax and a ‘surcharge on personal income tax’. An assumption on the part of some commentators that all listed options will automatically be factored into the mix could well be misplaced. Writing for Moneyweb, Bowmans tax partner Aneria Bouwer appears to agree. Like the 2015 NHI White Paper, the Bill tends to suggest that specific elements of the combined revenue source are still up for discussion. Meanwhile, the fund will depend on ‘some’ conditional grants being shifted from the Department of Health – as well as ‘some or all’ monies for ‘personal health care services’ traditionally factored into the provincial equitable share formula (clause 49). In this regard, reference is made to moving the national tertiary services grant and the HIV/AIDS and TB grant from the Department of Health into the fund. In appropriating money from the fiscus, Parliament will be guided by the principle of ‘social solidarity’ – which is defined as ‘financial risk pooling to enable cross-subsidisation between … young and … old, rich and … poor, … healthy and sick’.

National Assembly Health Committee chair Sibongiseni Dhlomo has confirmed that work on the Bill will begin with a briefing on its constitutionality from the Office of the State Law Adviser. This is expected to allay concerns expressed by DA leader Mmusi Maimane. The parliamentary process will include public hearings to be conducted separately by the National Assembly, the NCOP and the provincial legislatures.

NEW BILL CONFIRMS NHI VULNERABILITY

This article was published on the Legalbrief website on 8 August, when the Bill was tabled in Parliament. It was not included in that morning ’s edition of Legalbrief Today, which was posted before the Bill became available. A more detailed breakdown of the Bill ’s key provisions will follow next week.

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The National Health Insurance (NHI) Bill tabled in Parliament today seeks to provide South Africans with ‘access to needed health care that is of sufficient quality to be effective’, as well as ‘financial protection’ from its costs. According to a memorandum on the Bill’s objects, this is the aim of universal health coverage – as spelled out in the 2015 NHI White Paper. To that end, the Bill provides for the establishment of an NHI fund, setting out its powers, functions and governance structures.

The Bill proposes that – using ‘some’ conditional grants shifted from the Department of Health to the fund as well as ‘some or all’ monies for ‘personal health care services’ traditionally factored into the provincial equitable share formula – the fund will purchase health care services for all registered users. Reference is made specifically to moving the national tertiary services grant and the HIV/AIDS and TB grant from the Department of Health into the fund.

In addition, the fund’s executive authority ‘will bid for funds through the main budget as part of the budget process’. This is noting that, ‘in a favourable economic environment’, ‘new taxation options for the fund’ will be considered and could include either ‘a surcharge on income tax’ or ‘a small payroll tax’. Against that backdrop, it is envisaged that, over time, the fund will ‘expand coverage using certified and accredited public and private sector health facilities’.

In this regard, the memorandum refers to implementing ‘reforms’ in six phases, the first of which is apparently already a work in progress. Its focus is to improve ‘the quality of the health system by … certifying … health facilities to ensure (that) they meet the requirements of the Office of Health Standards Compliance’. The final phase will focus on expanding coverage to accommodate ‘maximum projected utilisation rates’ – and ‘gradually increasing the range of services to which there is a benefit entitlement’.

While the memorandum notes ‘legitimate’ concerns about ‘the affordability and sustainability of NHI’, it offers the assurance that ‘the nature of the proposed system’ and ‘the checks and balances that will be put in place’ will ‘limit unnecessary expenditure increases for supply-side as well as demand-side management’. The success or failure of NHI will be determined largely by the extent to which ‘high quality primary health care services’ ensure that ‘the majority of health problems’ are ‘diagnosed and treated at this level’.

‘RUSHED’ APPROPRIATION BILL A CONCERN

This article appeared in the 2 August edition of Legalbrief Today, under Policy Watch

Neither Finance Minister Tito Mboweni nor his deputy, David Masondo, was present when the National Council of Provinces (NCOP) considered and passed the 2019 Appropriation Bill on Wednesday (Fin24) – tending to suggest that the final leg of its passage through Parliament was merely a formality. While NCOP member and former National Assembly Finance Standing Committee chair Yunus Carrim ‘stopped short’ of saying as much (SABC News), by drawing attention to the Minister’s absence from the House when it voted on the ‘important’ Bill, he might just as well have done so. Without Mboweni or his deputy, there could be no debate before the vote took place (Business Day).

Approved by the National Assembly on 23 July, the Bill’s ‘B’ version reflects the R17.7bn allocation to Eskom in April, which Finance Minister Tito Mboweni requested be factored into the version tabled on 20 February but not processed by the time Parliament rose for May’s elections. Having been revived on 3 July, it was subjected to public hearings just under two weeks later at a joint meeting of the NCOP and National Assembly Finance Committees. According to Parliamentary Monitoring Group records, Carrim used the opportunity to remind members that, despite capacity constraints, they have a ‘huge responsibility’ to ensure that the funds appropriated are ‘used productively’. Yet after the hearings, each committee met only once – to adopt the Bill.

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A perception in some circles that it was ‘rushed through Parliament’ is therefore hardly surprising. In the view of DA leader in the NCOP, Cathy Labuschagne, not only has neither House ever made ‘significant amendments’ to an Appropriation Bill; the ‘right to debate’ its contents is being gradually eroded (Business Day). This despite provisions in the 2009 Money Bills Amendment Procedure and Related Matters Act apparently requiring what her colleague, Dennis Ryder, described as ‘thorough interrogation’ during deliberations in both committees (Fin24). Given the ‘austere measures’ imposed by the 2019 Appropriations Bill, Ryder believes the three-week process fell far short of these requirements.

LAND REFORM: REPORT EXPANDS LIST OF LIKELY TARGETS FOR EXPROPRIATION WITHOUT COMPENSATION

This article appeared in the 29 July edition of Legalbrief Today, under Policy Watch

While the presidential advisory panel on land reform and agriculture report released recently lists situations in which land could be targeted for expropriation without compensation, it is envisaged that the revised Expropriation Bill will provide the required level of detail on each. Against that backdrop – and building on sub-clause 12(3) of the draft Bill released last year for comment – the report refers to ‘land already occupied and used by labour tenants and former labour tenants’; informal settlements; ‘inner city buildings with absentee landlords’; abandoned land; ‘hopelessly indebted land’; land held purely for speculative purposes; unutilised land held by state entities; land obtained through criminal activity; and farm equity schemes.

Noting an ‘emerging interest’ among private land owners in ‘goodwill’ donations, the report recommends that this, too, be considered a form of expropriation without compensation. With that in mind, a voluntary land donations policy is being drafted with input from National Treasury, the Department of Trade & Industry and the Department of Agriculture, Land Reform & Rural Development. Tax exemptions and the policy’s ‘correlation’ with empowerment legislation are apparently the only matters still requiring attention.

Against that backdrop, regarding possible amendments to section 25 of the Constitution the report proposes a new sub-section (2)(c), requiring Parliament to ‘enact legislation determining instances that warrant expropriation without compensation for purposes of land reform envisaged in section 25(8)’. This appears to be a reference to the revised Expropriation Bill. The report also alludes to a provision in the Constitution itself ‘strengthening’ measures already in place for protecting farm dwellers from ‘inhumane and widescale evictions’. Given that a moratorium on land evictions would undermine section 25(1) provisions protecting land owners from the arbitrary deprivation of property, this appears to have been ruled out. Interestingly, the report also alludes to ‘myriad … shortcomings’ in a draft Regulation of Agricultural Land Holdings Bill released in March 2017 for comment. These include its focus on agricultural land, ‘the concept of land ceilings’ and related proposals for the redistribution of any excess land. ‘Further studies’ are recommended in this regard.

Several other pieces of urgently required new legislation are mentioned in the report: a National Land Reform Framework Bill or Land Redistribution Bill (among other things prioritising ‘competing needs for land’); a Land Records Bill (to formalise and record off-register property); a Restitution of Land Rights (General) Amendment Bill and Restitution of Land Rights (Judicial) Amendment Bill (to address what appear to be the Act’s numerous shortcomings); a Protection of Informal Land Rights Bill (also dealing with rights under customary law); and a Land Court Bill (to strengthen the adjudication process in the context of disputes over land restitution, distribution and expropriation). As Legalbrief Today has already reported, Justice & Correctional Services Minister Ronald Lamola’s recent political overview of the work of his two departments prioritised the Land Court Bill, which is expected to be tabled in Parliament ‘soon’. 

Given that, according to introductory remarks from advisory panel chair Vuyokazi Mahlati, ‘the people have voiced their impatience’ and that prevailing inequalities ‘are threatening peace and stability’, the length of time likely to be taken drafting, processing and implementing all this legislation is worrying. Other recommendations in the report point to the need for urgent attention to a raft of equally demanding imperatives, including agrarian and social reform. This is noting that if ‘social issues’ directly impacting on the quality of life of most South Africans are not addressed, the land reform programme will fail. However, beyond somewhat superficially referring to a ‘land reform fund’ and its possible ‘sources of capital’, the report is largely silent on the practicalities of how the entire ambitious programme will be financed. It is nevertheless made very clear that – as ‘one mechanism’ for enabling land reform – expropriation without compensation will not, on its own, release land on the scale required.

COMPETITION ACT AMENDMENTS UNPACKED

This article appeared in CompliNEWS on 19 July 2019

The 2018 Competition Amendment Act – several key sections of which came into force recently – ‘is evidence of government’s continued commitment to drive economic transformation and inclusion’, according to Trade & Industry Minister Ebrahim Patel. In a media statement on the sections concerned, the Minister singled out ‘a number of new definitions’ along with changes to section 8 of the principal statute, dealing with the abuse of dominance; section 10, dealing with exemptions; section 12A, dealing with the ‘public interest consideration during mergers’; sections under Chapter 4A, dealing with market inquiries; and section 59 dealing with penalties for offences. According to the statement, sections of the amendment Act not yet operationalised ‘will be phased in’ – beginning with those providing small businesses with remedies against price discrimination by dominant firms and the abuse of power by dominant buyers. These provisions are expected to be in effect ‘by November’, in anticipation of which the necessary regulations will probably be released in draft form soon for public comment.

In an article published in Mondaq, Fasken’s Johan Coetzee, Neil MacKenzie and Stuart Strachan unpack ‘some of the more notable amendments’ now in force:

  • The public interest ground sees consideration being given to ‘the promotion of a greater spread of ownership … to increase the levels of ownership by historically disadvantaged persons and workers in firms in the market’.
  • ‘The test for excessive pricing has been reformulated …, although it is largely reflective of existing case law. It has been explicitly stipulated that where it can be shown by the (Competition) Commission that the price charged by the dominant firm is prima facie excessive, the onus shifts to the dominant firm to prove that the price is reasonable.’
  • Regarding predatory pricing, ‘the scope of possible cost benchmarks has been amended to include average avoidable cost and average variable cost, in order to allow for a more accurate assessment of exclusionary behaviour’.
  • Margin squeeze … has been included in the list of specific exclusionary acts.
  • All contraventions are now ‘subject to a penalty of 10% of a firm’s annual turnover’, while ‘an administrative penalty of 25% of a firm’s annual turnover’ may now be imposed for a second offence.
  • Market inquiry proceedings will focus on market structure, observed market outcomes and conduct adversely impacting on competition. ‘Critically’, according to the article, the Competition Commission ‘will be able to take any remedial actions … it considers to be reasonable and practicable’ – other than divestiture, which can only be imposed by the Competition Tribunal. The commission’s findings and actions will be binding, unless challenged in the Tribunal.
  • Exemption provisions in the principal statute now include an additional ground: ‘to promote the ability of effective entry into, participation in or expansion within a market by small and medium businesses or firms controlled by historically disadvantaged persons’; ‘for the economic development, growth, transformation or stability of any industry designated by the Minister’; and ‘for competitiveness and efficiency gains that promote employment or industrial expansion’.

NATIONAL HEALTH INSURANCE: THE BUILDING BLOCKS

This article appeared in the 17 July edition of Legalbrief Today, under Policy Watch

While the yet-to-be-tabled National Health Insurance (NHI) Bill is being processed in Parliament, ‘the structure of the national Department of Health will be reorganised’ and a dedicated NHI implementation unit established. The official version of Health Minister Zweli Mkhize’s recent budget vote speech describes the unit as an ‘embryo’ NHI fund and staff capacity-building platform. Unfortunately, the speech was only published on the department’s website several days after being delivered, which may explain why the mainstream media overlooked so much valuable information provided by the Minister on government plans for preparing public health facilities to implement the long-awaited system. As has been widely reported, Mkhize provided no information on the primary source of revenue for NHI. However, he did refer to a ‘social compact’ on building a health system fit for its implementation. It was one of the outcomes of last October’s presidential health summit.

Mkhize also confirmed that, as the ‘backbone’ of a national electronic health patient record system, a registration system has been developed on which the details of ‘all South Africans’ are expected to have been captured by the end of the 2019/20 financial year. According to the Minister, nearly 43m users have already been registered. With the aim of improving management and governance, within the ‘next six months’ the organograms of all state-run health facilities are expected to have been reviewed and the system of delegating responsibility ‘adjusted to ensure appropriate levels of authority for effective decision making’. In addition, EU funding and bilateral agreements with Japan, the UK and France will be used to ‘build the capacity of managers to implement NHI’. In this regard, Mkhize mentioned ‘twinning arrangements’ also involving ‘academic institutions’.

Conceding that ‘it will be impossible to convince the public about the virtues of NHI unless the health infrastructure is rebuilt as a matter of urgent priority’, the Minister said a ‘team of experts in finance and health … infrastructure’ has been established ‘to seek creative financing mechanisms’ and ‘alternative’ delivery models. According to Mkhize, the team’s ‘clear directive’ is to ‘accelerate the refurbishment of all old hospitals and clinics and deliver new ones within five-to-seven years’. While a ‘significant amount’ has been budgeted for this, in the Minister’s view it is ‘grossly inadequate’. Nevertheless, the ‘entire’ infrastructure build programme has been costed – informed by an audit of all public health facilities. ‘Preliminary indications are that … (it) is feasible,’ the Minister said.

Writing for the Daily Maverick (and drawing from the department’s 2019/20 annual performance plan) the Bhekisisa Centre for Health Journalism’s Laura Gonzalez reported that, initially, it is envisaged that, from 2021, the fund itself will be used to purchase a ‘basic package of services’ from both private and public healthcare providers. Over time, a ‘comprehensive package of services’ will be made available from regional and tertiary hospitals ‘in selected districts’. According to Gonzalez, these services could form the building blocks of ‘a basic medical aid option’ along the lines of one apparently being considered by the Competition Commission ‘as part of its four-year investigation into the private healthcare sector’.

‘DUAL’ MANDATE FOR SARB A POSSIBILITY?

This article appeared in the 8 July edition of Legalbrief Today, under Policy Watch

South African Reserve Bank (SARB) governor Lesetja Kganyago has confirmed that his counterpart in New Zealand (NZ), Adrian Orr, has been invited to SA ‘because of excitement in some circles’ about a recent amendment to its mandate – which, since 1 April this year, has been to ‘protect price stability … while also supporting employment growth’ (Fin24). Kganyago revealed this recently during a business breakfast in Johannesburg, when he also drew a clear distinction between the issue of the SARB’s ownership and that of its mandate. In Kganyago’s view, by ‘conflating’ the two issues and introducing the controversial matter of ‘how to deal with inter-governmental debt’, the ANC leaders concerned (Reuters) have turned the debate on the central bank’s ownership into ‘a Trojan horse’: something that is not what it appears to be’, a ‘zombie discussion … impervious to facts’.

The mandate of the NZ Reserve Bank (NZRB) was changed ‘to address emerging policy challenges, … operate with greater transparency and accountability … (and) reinforce … (the bank’s) societal legitimacy’ according to Orr. Because his country enjoys ‘low and stable inflation, low unemployment, and broad financial stability’ – and has prospered for 30 years – the new, dual mandate appears to have been prompted more by its government’s obligation to offer ‘a coherent and unified response’ to potential global financial crises such as the one in 2009 than by any domestic challenges. Historically, the NZRB ‘has always taken labour market developments into account while formulating monetary policy’.

Last Wednesday, during a meeting of the National Assembly’s Trade and Industry Committee, Minister Ebrahim Patel provided members with a comprehensive analysis of the structural constraints facing SA’s government as it grapples with the challenge of formulating policies to stimulate ‘faster, inclusive (economic) growth’. One is that the country’s labour force (people of working age, including the unemployed) has grown by 134% since 1996. According to the Minister, this growth has been fuelled largely by more women and young people looking for work instead of remaining at home or participating in SA’s subsistence economy. During the same period, employment opportunities grew by 84%, but not enough to absorb the significantly higher labour force. The Minister also referred to the mismatch between available skills and those for which the demand across business is high.

It is against that complex backdrop that, when asked on Friday if monetary policy and ‘the limited mandate of the SARB’ has impacted negatively on growth, Kganyago is reported to have emphatically blamed the ‘contraction’ in GDP during the first quarter of 2019 (Business Day) firmly on ‘electricity constraints’, ‘strikes in the mining sector’ and ‘construction sites hijacked’. ‘You can’t solve that with monetary policy,’ Kganyago told guests at the business breakfast, adding – possibly with justifiable frustration – that ‘it just doesn’t work that way’. ‘Employment is an outcome of growth. South Africans speak about jobless growth but it’s a useless statement. When this economy was growing, you had jobs.’ The question asked of Kganyago should surely have been, ‘What, if anything can the experience of NZ as a developed economy contribute to the debate?’