Magda Wierzycka, CEO of Sygnia Asset Management, says the policy of prescribed assets, enabling government essentially to expropriate pensions and savings to fund its expenditure, isn’t on the table.
Yet this is a policy that President Cyril Ramaphosa unambiguously put on the table in a parliamentary Q&A session a year ago. Since then, prominent ministers have expressed support for it, including Pravin Gordhan and Minister of Finance Tito Mboweni. Where exactly on the table prescribed assets might be is unclear. That it is on the table is crystal clear.
There is no getting away from the stark reality that South Africa’s fiscal cupboard is bare, and that government is in a desperate scramble for resources and assets. Having squandered what thirteen years ago was a budget surplus, and having allowed government debt to balloon to crisis levels, the ANC has homed in on the destruction of property rights as a mechanism for wealth extraction.
South Africans have seen a continuous onslaught on the right to securely own what they have worked hard to earn. This is perhaps most prominent in the full-scale attempts to amend section 25 of the Constitution. But asset prescription has thus far managed to avoid rousing quite the same level of opposition. Perhaps this is because land packs an emotive, political punch, while pensions and savings hardly make for a glamourous casus belli. However, if property rights can be butchered for the vaunted pursuit of land ownership, private savings are at least equally vulnerable to a cash-strapped government tempted by a large pension pot. If property rights are to be defended, expropriation of land and prescribed assets are both policies that must be defeated.
Biggest spender, biggest looter
State capture has only ever been the symptom of a deeply corrupt system based on the ideological funnelling of massive state expenditure into the patronage network of the ANC. The ideology that government must be the biggest spender inevitably gave way to government becoming the biggest looter. To her credit, Ms Wierzycka was a vocal critic of government failings when President Jacob Zuma occupied the Union Buildings.
Yet, in a decade of steadily mounting government expenditure, corporate South Africa has remained silent on one bad policy after another. This silence bordered, in some cases, on indulgence and appeasement. One way or another, South Africa has landed itself in a place where it seems that both government and corporate South Africa have failed – one to implement constructive policies, the other to call out policies that have wreaked immense damage on the economy, to the detriment of ordinary South Africans who work hard to earn an income, and play by the rules to provide for their retirement.
Highest levels of scrutiny
These collective failures of policy and responsible corporate citizenship demand the highest levels of scrutiny. This is the foundational motivation of the IRR’s campaign to #SaveSavings and #ProtectPensions, based on the mandate of thousands of members who are clients of corporate SA, the tenets of constitutional democracy, and the ethical and even legal responsibility of transparent corporate governance.
But it speaks volumes that, in response to the IRR’s scrutiny, some corporate citizens seem more willing to cast aspersions than give answers.
It is vital for all South Africans to oppose the ANC government and its destructive ideology, manifest in threats to property rights, whether through prescribed assets or compensation-free expropriation. South Africa needs the help of corporate citizens in mobilising against this. But big business, with some important exceptions, has for too long been silent, at least partly out of fear of state retaliation.
The time has now come, however, for big business to enter publicly into the fray. It is not enough to talk to ministers behind closed doors. Corporate South Africa needs to add its voice to the outcry against prescribed assets and other proposed takings from ordinary South Africans. It makes very little sense to wait until the government has fully formulated and spelt out its plans.
The threat to property rights is already evident and big business needs to take the initiative – on behalf of all South Africans as well as its own customers and clients – in strongly and publicly opposing prescribed assets, expropriation without compensation, and any other attempt to siphon off the hard-earned assets of ordinary people into the ANC’s ever hungry patronage machine.
Ms. Wierzycka herself has held several positions on prescribed assets. She has called it a ‘(mostly) terrible idea’, a better option than an IMF bailout, a blunt instrument, a mechanism to fund bankrupt SOEs, and something that will divert funding away from job-creating investments. It is far from out of order to ask where she and others in her position stand on prescribed assets.
The money and assets managed by corporates like Sygnia Asset Management are neither theirs to give away nor government’s to demand. At the end of the day, it’s the money of ordinary South Africans on the line. On property rights, too many have been silent for too long, preferring the fence to the fray. But if sitting on the fence is uncomfortable, get off it.