News in South Africa 11th October:

1. R350 grant criteria relaxed:

Social Development Minister Lindiwe Zulu has apologised to recipients of the R350 Covid-19 Social Relief of Distress (SRD) grant for problems in its administration after the end of the national state of disaster early in April.

R350 grant criteria relaxed
Photo by Nicola Barts

She was speaking at a media briefing in Pretoria on Monday (10 October).

The issues resulted in a drop in recipients from 10.5 million to a level where less than half the allocated budget was utilised.

“We regret the pain and hardships that these challenges occasioned for many of you for whom this intervention is the difference between, on the one hand, hunger and indignity, and on another, leading a dignified life,” said Zulu.

She said the low uptake of the grant remains a challenge for the department. “For us as the Social Development portfolio this is very serious indictment because we continue to see the growing numbers of hungry and distressed people in the communities where we work.”

In August the criteria were simplified and the threshold increased to R624 per month, in line with the estimated food poverty line. The number of applicants subsequently increased to 12 million.

“We may have to consider a further adjustment to the threshold to enable more applicants to qualify for the benefit,” Zulu said.

She announced that nearly 7.5 million people are currently receiving the grant every month, still short of the target of 10.5 million.

Zulu also cautioned that the programme should keep to within the monthly budgeted amount of R44 billion and the department should take care to not over-commit government.

Noting that payments are still being hampered by beneficiaries who upload incorrect banking details, she urged approved applicants to check the status of their bank verification and, if necessary, correct the details.

“We note that it is in the interest of the incomeless, unemployable and vulnerable sections of our population for the implementation of the Covid-19 SRD to improve,” she added.

“Equally, we note that the vast majority of South Africans prefer to be in employment. Until such time that the economy has sufficiently grown, we cannot helplessly sit by and watch the people lose their dignity.”

2. Cost of living crisis and road safety:

The cost of living crisis is driving up the risk of poor road safety as consumers buy older cars and struggle with maintenance costs, says Kate Elliot, the CEO of Right to Repair.

Elliot said that cash-strapped consumers are taking their ageing cars in repeatedly for maintenance as seen globally, in countries like the UK.

Graham Stapleton, the CEO of Halfords, a large vehicle retailer abroad, said that in terms of what they see in their garages while taking into account continuing issues with the supply of new cars, the average age of cars will pass the nine-year mark very soon and could creep above 10 – before the cost of living crisis ends.

The cost of living continues to rise following an increase in interest rates by the South African Reserve Bank Monetary Policy Committee (MPC) in September, by an additional 75 basis points – the fifth consecutive increment since November 2021, said Elliot.

She said that the carpool in the country is also ageing, with a general slowdown in new vehicle sales, compounded by the fact that in South Africa there is no enforcement of periodic testing.

In the UK testing needs to be carried out annually, while locally, there is no requirement for a roadworthy inspection for nearly 80% of the vehicle population, noted Ferose Oaten, National chairperson of the Vehicle Testing Association (VTA).

An amendment in 2014 to Regulation 138 of the National Road Traffic Act was meant to prescribe that vehicles older than 10 years be tested every two years, however, to date this has not been enforced and vehicles are still only required to have a statutory roadworthy test on change of ownership.

Some good news

Elliott said while this may seem like a double-edged sword – enforcing safety checks on motorists when consumers are already so financially stretched – the good news for motorists is that:

“Since the coming into effect of the Guidelines for Competition in the SA Automotive Aftermarket, we have seen a general opening up of the market providing motorists with the freedom to shop around to find the most competitive service provider.”

“This makes our aftermarket a fairer place to do business and while we don’t necessarily foresee service prices coming down that much, we are seeing better quality service being provided and a general slowing down in inflation of service prices.”

Parts on the other hand have actually seen a decrease in price due to the extra competition now in place. This all bodes well to counter the effects of inflation and help keep our roads safe, said Elliott.

The final guidelines for competition in the South African automotive aftermarket came into effect on 1 July. They state that owners of new cars have the right to repair or service their vehicles at an independent provider of their choice.

3. R4 791 windfall for political parties:

On Monday, South Africa’s political parties represented in Parliament’s National Assembly received a statement of account from one of the core pillars of the system intended to keep them afloat, the Multi-Party Democracy Fund (MPDF).

The balance? “R4 791 (Four Thousand, Seven Hundred and Nintey-One Rand)”, announced the Electoral Commission, which administers the fund.

That is the sum available for allocation for the period from April 2021 to the end of this year, for an average of a little under R230 per month.

Not the amount of money available to each political party, mind you, but the grand total that is to be split among them. By law, the money must be divided among the parties that have at least one seat in the National Assembly, one third in equal tranches to each, and the other two-thirds based on their number of seat.

The MPDF’s other rules include that it may not accept donations from any government or government-linked entity, such as a local state-owned enterprise or an agency of a foreign government. But beyond that, it is open for the use of individuals or corporations who wish to make a direct contribution to the contest of ideas in South Africa without the risk of accidentally, say, influencing policy in their favour – or being seen to be trying to buy special treatment.

Should they wish, such donors can even stay anonymous, their identities known only to the Electoral Commission.

Those donors can rest assured their money will be spent, directly, in party-political activities such as driving voter registration. The Commission may claim no more than 5% for administration, and parties are forbidden from using the money to pay staff or to fight internal legal battles.

In the first quarter of the year, the ANC and DA declared R25 million in direct donations from named supporters, mostly the corporate personas of wealthy individual South Africans.

Those declarations are in terms of a new and largely untested system of declarations that were fiercely opposed by the biggest parties.

4. Transnet strike – adverse effects:

Business lobby groups have warned that disruptions from the Transnet strike could be as bad as load shedding and worse than the Covid-19 lockdown.

60% of SA’s GDP relies on imports and exports in some regard, and the Minerals Council forecasts a revenue loss of R50 billion this year for iron ore, coal, chrome, ferrochrome, and manganese exporters.

At the same time, Kumba Iron Ore warned that disruptions would impact approximately 50,000 tons per day of production for the first week and about 90,000 tons per day after that.

5. Health department’s poor audit:

An apparent disagreement over the department of health’s financial records for the Covid-19 vaccination programme has led it to receive a qualified audit for the 2021/2022 fiscal year, the first time in more than a decade that it has failed to get a clean bill of health from the auditor-general.

A qualified audit signals the auditor-general is not satisfied that an entity has properly accounted for the money allocated to it. The last time the department received a qualified audit was in 2010/2011.

Auditor-general Tsakani Maluleke said she could not obtain sufficient audit evidence for R2.079 billion in accrued revenue the department had attributed to Covid-19 vaccines for 2021/2022.

However, deputy director-general for National Health Insurance, Nicholas Crisp, said that the discrepancy is due to complicated financial reconciliation payments involving private medical aid schemes and that it will take several more months to finalise. He added that he is confident that the numbers will tally at the end of the process.

All information sourced from articles posted by: Moneyweb, BusinessTech, Business Insider, Fin24, and BusinessLive.

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