The South African government’s intention to implement prescribed assets is the latest of a number of reckless and nonsensical policies.
In essence, this would mean a mandatory investment of pensions and savings into government ‘assets’. This must not be allowed to happen. Every South African should oppose this plan and prevent the African National Congress (ANC) from stealing their nest egg.
The government is currently investigating the possibility of changing Regulation 28 of the Pension Fund Act. Regulation 28 limits the extent to which retirement funds may invest in particular assets or asset classes. The chief purpose of this is to ensure that the portfolios of savers are well diversified so as to limit their exposure to one asset or asset class in particular.
However, many commentators and economists suspect the government aims to use this well-intentioned regulation for their own devious ends. It is no secret that the government has run out of money, and quite frankly out of options. South Africa’s debt is currently at 60.6% of our GDP. Put another way, the country owes R70 315,14 for every citizen. South Africa pays over R200bn in interest alone per year. Our budget deficit or shortfall is set to increase to 6.8% of GDP in the fiscal year ending March 2021.
Minister of Finance Tito Mboweni has said that, after Covid-19, this figure might balloon to 15.7% of GDP. The state coffers are so depleted that we are now approaching international finance institutions for money. The ANC has become so desperate that it deviasted from its long-held conviction to avoid approaching international finance institutions such as the International Monetary Fund (IMF) for financial assistance.
Belief in socialism
The reason for avoiding such aid was said to be its determination to retain financial sovereignty, but the real reason is ideological. Receiving financing from an institution like the IMF or World Bank would mean agreeing to certain conditions. These conditions are the adoption and implementation of liberal labour, economic, and social policies. This is, of course, in sharp contrast to the ANC and South African Communist Party’s (SACP) ideological belief in socialism.
The fact that the ANC has now accepted funding from the IMF means that it has exhausted all other alternatives and was forced to swallow its pride and stick out the begging bowl.
It now has its sights firmly set on the savings and pensions of hard-working South Africans to bail out failing state-owned enterprises (SOE), increase public wages, create a state bank, and fund the planned National Health Insurance (NHI) among other things.
As far as track records go, the ANC/SACP government has one of the worst. Just recently, there have been allegations of hundreds of millions of rands intended for Covid-19 relief and procurement being diverted into the pockets of cadres and their families.
The government’s multiple failures speak for themselves, and for anyone to hand over their hard-earned savings to it would be like trusting a bankrupt person with their credit card.
‘An invitation for prescribed assets’
The government has denied that savings and pensions will be used to bail out struggling SOEs. So said the head of the ANC’s economic transformation committee, Enoch Godongwana, in a recent webinar. However – commenting on the decision by Nedbank and Standard Bank to stop funding new coal power projects – Godongwana said on Carte Blanche that, ‘to me, that’s an invitation for prescribed assets’.
Whatever the government says, once it changes Regulation 28 it will have access to an entirely new pool of money. And, given the allegations concerning Covid-19 relief funds and procurement tenders, there is good reason for stopping it from laying its hands on savings and pensions.
It is the government that has got us into our present financial predicament, and we should not expect a solution from it. As former United States president Ronald Reagan once remarked: ‘The nine most terrifying words in the English language are: “I’m from the Government, and I’m here to help”.’
We go to work every day, we pay some of the highest taxes in the world, and now our government wants us to give even more. This is unacceptable. We have arrived at this juncture due to more than a decade’s mismanagement, maladministration, and corruption.
Money meant for state funerals ends up in the pockets of cadres, money intended for the procurement of Personal Protective Equipment (PPE) ends up in the pockets of cadres, even food parcels meant for the most vulnerable members of our communities end up in the hands of cadres.
No one is ever punished for this. All we ever get is empty rhetoric and investigations by the ANC’s own integrity committee. The irony of this committee is laughable. We have spent millions of rands on commissions of inquiry, but they seem to provide little more than an opportunity for confession and forgiveness.
South Africans, individuals and institutions alike, must fight the prescribed assets policy.
Corporate South Africa, in particular, cannot remain silent on this issue. It is corporate institutions that will be charged with helping the government to implement this policy, and they need to declare whether or not they will stand with us, who trust them with our money, or sell us out.