News in South Africa 18th January:
1. Tax hike for vaccination funding:
South Africa’s National Treasury is considering raising taxes as one of several possible mechanisms to fund the vaccination drive against Covid-19 it was reported.
The government viewed the vaccines as a public good and was committed to financing their rollout, with or without support from the private sector and medical schemes, the Johannesburg-based newspaper reported, citing Treasury director-general Dondo Mogajane.
Other options the Treasury is exploring include widening the budget deficit and reprioritizing government spending. The pandemic was a good case for emergency funding, Mogajane was cited as saying.
The department of health has estimated a maximum cost of R20 billion ($1.3 billion) to vaccinate the entire country, while more recent internal estimates done by the Treasury are far lower than this.
The government has been criticized by South African scientists for the slow pace of its vaccine procurement.
2. Stage 2 load shedding continues:
Loadshedding is set to continue as the return to service of some generation units has been delayed, Eskom said in a statement on Sunday afternoon.
Rolling blackouts will be reduced to stage 1 from 23:00 on Sunday night until 05:00 on Monday morning, after which stage 2 will return.
“The system remains constrained and vulnerable, and Eskom will give a further update on the power situation on monday afternoon,” the power utility said in a statement.
In the past 24 hours, a generation unit each returned to service at Kriel, Grootvlei and Duvha power stations respectively.
“Despite Eskom’s stringent measures to manage the impact of the second wave of the Covid-19 pandemic on the operations, we are experiencing some impact on operations, including our suppliers.”
3. Possibility to expunge Covid offenses:
The government said it is considering expunging the criminal records of people who have violated lockdown regulations but it won’t do this now because it wants to curb the spread of COVID-19.
Tens of thousands of people have criminal records since the State of Disaster was enacted almost a year ago.
Police Minister Bheki Cele announced that about 20,000 people have been arrested for violating the latest lockdown regulations.
Nearly 7,500 of them were not wearing a mask in public.
Paying the admission of guilt fine carries with it more than just a financial penalty.
Justice Project SA’s Howard Dembovsky said, “if you have been arrested and your fingerprints have been taken then a criminal record will be recorded against your particulars, no matter how minor that offence is and that will actively prevent you from gaining employment, and it will also prevent you from gaining a travel visa to other countries. That will endure for a period of 10 years.”
The suggestion is that the fines ought to be handled like speeding tickets – which don’t carry criminal records.
Dembovsky said, “these criminal records are enduring and there is no apparent reason why the minister of Co-operative Governance should actually declare these things to be criminal offences when she could just as easily prescribe administrative fines or in fact ask people to do community service.”
The government said it’s concerned by the large number of people earning criminals records but its priority is curbing COVID-19.
Deputy Minister of Justice John Jeffries said, “yes, we would like to see a process for expunging records for admission of guilt fines because of the detrimental effect on people. But also, at this stage, in the middle of the second wave, people must follow the regulations, it is for our own good.”
4. Ramaposa accused of corruption:
On Friday at the Zondo Commission, former Eskom CEO Brian Molefe accused President Cyril Ramaphosa of the irregular awarding of contracts while he was chairperson of the utility (and a shareholder in Glencore at the same time). Molefe says Ramaphosa was complicit in Glencore’s attempt to force Eskom to renegotiate its coal agreement and write off a R2 billion penalty.
President Cyril Ramaphosa has undertaken to step down from his position should he be charged with corruption.
“If I’m charged with corruption, my own orientation is that, yes, [I will],” Ramaphosa said measuredly, when asked the question in an interview with News24 on Friday afternoon.
Molefe told the Commission of Inquiry into State Capture that Ramaphosa had a conflict of interest when he, in his role as deputy president, was appointed chairperson of Eskom’s war room while he was a shareholder at Glencore, an Eskom contractor.
Ramaphosa, in an interview with Power FM earlier, denied that there was a conflict of interest as he said he had exited all his business positions at the time. He said he would testify at the commission to clarify this.
5. Banks selling property for cents:
It’s been known for years that the banks have been flogging off repossessed properties for a fraction of their market worth, but the evidence was anecdotal and fragmented. Not anymore.
An affidavit filed in support of the R60 billion class action suit brought by Lungelo Ditokelo Human Rights Foundation against the major banks, based on a sample of about 12 000 repossessed properties, found that these properties were sold for 50-60% of their proper value, mainly through sheriff’s auctions.
The class action suit, which is being defended by the banks, seeks to recover billions of rands in lost home equity as a result of this practice.
“Our South African banks sell property about five times more than the international average as a percentage of the total number of outstanding bonds and 20 times more than best practice,” says Garth Zietsman, a statistician who analysed data from the National Credit Regulator.
Even more disturbing is that the poor are worst affected.
Lower valued homes were sold for about 40% of their market value, against 81% for the higher valued ones.
The evidence shows dozens of properties were sold for less than 1% of their market value. Of the 200 worst cases, all were sold for less than 17.2% of their market value.
The banks have yet to file their replies to the case.
In one case highlighted by Zietsman, a R1.3 million property was sold for R1 000 at auction.
In this case, the lending bank was FNB. Standard Bank and Nedbank also had several properties selling at auction for R1 000 when the market value was R200 000 to R440 000. There is no comparable data available for Absa.