News in South Africa 19th October:
1. School vaccination drive:
Gauteng premier David Makhura says his government is working on a programme that will allow children to be vaccinated at schools.
“We are going to use the schools as sites for vaccination. We are urging parents to consent. We don’t want to work against parents,” Makhura said at a media briefing held in Dobsonville, Soweto on Monday.
He encouraged parents to go with their children when they go to vaccinate at designated sites.
“We have a responsibility as parents to ensure that our children are safe. I don’t understand why parents should not be involved in the vaccination of their children. Let’s take our children to vaccinate. I am relieved the window has been opened for children to get vaccinated,” said Makhura.
“People need to be convinced it is the right thing to do to get their children vaccinated. We don’t want to do anything by force.
“As a parent myself, I am very happy. Let’s take the steps to beat this pandemic. We want to encourage vaccination because we want to bring back a level of normality.”
Health minister Joe Phaahla announced last week that children between the ages of 12 and 17 years would be eligible for Covid-19 vaccinations from Wednesday, saying this could be done without parents’ consent. The age group accounts for about 6-million people.
“It would be good to vaccinate at least half of them between the school holidays and the end of exams,” said acting director-general Nicholas Crisp.
Makhura said townships were lagging behind in terms of vaccinating, with the south of Johannesburg having the lowest number of people who have been inoculated.
Gauteng has administered 5.3-million vaccines in total. Of the number, 3.6-million were single-dose vaccinations.
2. Tourism Relief Fund “unlawful”:
NGO AfriForum and trade union Solidarity, in separate urgent review applications, took the Minister of Tourism to court in 2020 for introducing a broad-based black economic empowerment (B-BBEE) compliance component into the eligibility scoring system for Covid-19 relief funding from the Tourism Relief Fund.
The Pretoria High Court combined the two applications and dismissed the joint application in April 2020.
The two parties took the matter on appeal, and the Supreme Court of Appeal, in a judgment handed down on September 22, 2021, overturned the high court’s judgment. The respondents, which included the Department of Tourism, are directed to pay the costs of the applicants, including the costs of two counsel.
The court held that the minister’s exercise of power in regard to introducing a B-BBEE eligibility component constituted ‘administrative action’, as defined in the Promotion of Administrative Justice Act 3 of 2000 (PAJA), and was thus subject to review.
The SCA found that the minister was not legally obliged to include the Tourism Sector B-BBEE Code in the qualification criteria, and her decision was consequently unlawful.
The SCA also held that funds already disbursed from the Tourism Relief Fund cannot be recovered.
The court noted that the minister unequivocally relied on the B-BBEE Act to include the B-BBEE status level as a criterion for eligibility for grants from the fund, and her counsel conceded that it was not open to the minister to justify the inclusion of the B-BBEE status levels on any other basis.
The court referred to Hira and Another v Booysen and Another 1992 (4) SA 69 (A), which articulated that administrative action can be reviewed if “the action was materially influenced by an error of law”.
The court found that the minister “erroneously” believed that she was bound by the B-BBEE Act to include the B-BBEE code in the selection criteria: “Her error was material because it distorted her discretion in the sense that it caused her to fail to apply her mind properly to the criteria that should have been used for eligibility … ” and her action was therefore invalid.
Counsel for AfriForum suggested, and counsel for Solidarity agreed, that there was no point in seeking to review or set aside the minister’s actions as the whole fund had already been disbursed, and the disbursed funds cannot be recovered from the beneficiaries.
3. SARS taking on the wealthy:
The South African Revenue Service (SARS) has appointed Natasha Singh, a chartered accountant with more than 20 years of experience, as the new director of its High Wealth Individual (HWI) Segment.
In line with the strategic objective to make it easy and straightforward for taxpayers to comply with their legal obligations, the appointment is of strategic importance to help improve the compliance of wealthy individuals with complex financial arrangements, SARS said.
Singh holds a master’s degree specialising in taxation. She joins SARS from Eskom, where she served as Finance Executive: Group Insurance and Tax.
Her appointment is timely as it coincides with recent reports that affect this important segment of taxpayers, including the recently released Pandora Papers, said SARS commissioner Edward Kieswetter.
“We recognise the revenue contribution from this segment, in its various forms, to the Republic of South Africa,” he said.
“We also acknowledge the likely challenges that may arise, or currently exist with regards to the tax affairs and tax obligations of individuals and their families. Wealthy individuals tend to arrange their financial affairs in complex on- and offshore structures, often masking their direct beneficial ownership and true income.”
Kieswetter added that the continuing revelations from global media regarding the financial transactions of high wealth individuals across the world are a matter that needs proper investigation by suitably qualified experts such as Singh.
“Whilst our initial selection includes about 1,500 wealthy individuals and their related entities, to ensure focus, we will continue to extend our reach to include more individuals and families.”
“While SARS is committed to assisting taxpayers with their legal obligations, the organisation is equally determined to detect and deter non-compliance. In addition, SARS will not tolerate willful non-compliance and will make it hard and costly for such taxpayers without fear or favour,” Kieswetter said.
4. Residential property market booming:
South Africa’s residential property market is booming, with sales volumes and house price appreciation showing no signs of slowing down in the wake of harsh lockdown restrictions.
The property market has “exceeded expectations” in the third quarter of 2021, according to the latest RE/MAX National Housing Report published on Monday. Fears around possible interest rate hikes and harsher lockdown restrictions painted a grim picture for the market earlier this year.
Activity in the market was subdued between April and June. The number of transfers dropped by 22% compared to the first quarter of 2021, while the average price of sectional titles freehold homes showed meagre quarter-on-quarter growth.
This could’ve signalled the end of the property market rally which followed the end of hard lockdown and the reopening of Deeds Office. But, according to the latest RE/MAX, which looks at the market from July to September, interest in property has experienced a resurgence.
“Understandably, the third quarter of 2020 was a period of unprecedented activity as record-low interest rates and pent-up demand following the Deeds Office closure drove sales to an all-time high,” said Adrian Goslet, the Regional Director and CEO of RE/MAX in Southern Africa.
“But, what could not have been expected was that this period of hyperactivity would last as long as it has. It is now a full year later and we are still seeing record-breaking sales volumes.”
Of the almost 60,000 transfers recorded during this period, half were for freehold properties. The number of freehold properties registered increased by 20% compared to the same quarter in 2020.
This growth extends to nationwide average prices of freehold homes, which in the third quarter of 2021 was R1,352,712. This represents a 21% increase when compared to the same period in 2020. During the height of lockdown, the national median price of freehold homes dropped to R1,109,852, while sectional titles were worse off, dropping to R953,084.
5. More powership drama and delays:
Floating powership provider Karpowership SA has accused rival energy company DNG Power Holdings of delaying and “holding hostage” a programme to fast-track new power production as the two energy firms square off ahead of an upcoming court case.
DNG and Karpowership SA both bid for a government tender to quickly add new power production to SA’s grid to “fill the current short-term supply gap” and cut down on load shedding.
After DNG lost out to Karpowership SA when preferred bidders for the Risk Mitigation IPP Procurement Programme (RMIPPPP) were announced in mid-March, it claimed the tender process had been corrupted by shady backroom deals and engineered to favour its rival from the outset.
DNG is accusing Karpowership of tender fixing, saying that the group was approached by a shareholder with the terms of the contract long before it went out to tender. This was to ensure it won the bid.
Karpowership says DNG is making things up and delaying the emergency power process because it lost the bid. It said that it is easy to make allegations, but these will have to hold up in court.