News in South Africa 28th March:

1. Civil servants may accept pay hike:

South African public servants are likely to accept the government’s latest wage offer, according an initial estimate of a ballot of labour-union members.

Civil servants may accept pay hike
Photo by Yan Krukau

Employee groups representing about 1.3 million government workers are currently seeking a mandate from their members to accept a 7.5% increase in their pay in the fiscal year that begins on April 1. The proposal includes a pensionable cash gratuity and excludes housing and medical insurance, Reuben Maleka, spokesman for the 235 000-member Public Servants Association, said in response to questions sent by text message on Monday.

“Preliminary results are positive,” Maleka said.

Wages account for about a third of government expenditure in South Africa and keeping it in check is key to the National Treasury’s efforts to contain runaway state debt. Ratings companies have flagged the wage bill as an ongoing risk to the nation’s finances. 

Increasing pay for public servants on salary levels one to 12 by an average of 7% would cost an additional R35.8 billion in the upcoming financial year, the Treasury said March 16. Budget estimates released last month envisioned the compensation bill growing by an annual average of 2.1% over the six years through March 2026, down from 7.3% over the previous five-year period.

The Treasury declined to comment.

2. Jhb above-inflation tariff increases:

Residents of the City of Johannesburg will see a substantial increase in the cost of municipal services from 1 July if the draft medium-term budget tabled in council last week is anything to go by.

With exception of property rates, the tariffs for all main services increase by a rate equal to or more than that of inflation, which is currently at 7%.

The increase in property rates of 5.3% however comes on the back of a new general valuation roll that is, in total, valued at 12% more.

(The city has  extended the 31 March deadline for objections to the new valuation roll to 5 May.)

In addition, the draft budget contains a proposal to decrease the discount on the rebate for residential property from R350 000 to R300 000.

This, according to Ben Espach, director for valuations at Rates Watch, may result in a considerably higher effective increase for individual property owners.

“According to the draft budget the projected increase in the city’s revenue from property rates is 15.8%. Although the increase in the tariff [5.3%] is below the CPI [consumer price index], the effect of the new valuation roll was not considered when the new tariffs were determined.

“The property rates tariffs should have been based on an inflation-related increase in the revenue from property rates,” he adds, saying that would most likely have resulted in a decrease in the tariffs.

3. SA may have to ban new fuel cars by 2035:

South Africa may have to ban the sale of new internal combustion (ICE) vehicles by 2035 and shift as much as 20% of road traffic to rail to meet its committed climate goals submitted at COP26.

This is according to a new report by the National Business Initiative, in partnership with Business Unity SA and Boston Consulting Group.

The report aimed to better understand how South Africa could achieve its revised Nationally Determined Contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC).

The revised NDC committed the country to reduce carbon emissions within a target range of 350 million tonnes to 420 million tonnes of CO²-equivalent by 2030 – a 20% to 33% reduction of current emissions – and to achieve net-zero emissions by 2050.

According to the report, South Africa faces the dual challenge of decarbonising whilst improving transport as a service for consumers and enabling other sectors to decarbonise, all while mitigating rather than exacerbating existing socio-economic challenges and seizing emerging opportunities to support its socio-economic development agenda.

Transport in South Africa is the third-largest emitting sector after energy and the metals sector, contributing about 10% of total emissions, said the report.

Close to 90% of transport emissions are from road transport. The report noted about 8 million passenger vehicles on South Africa’s roads, over 300,000 minibus taxis, 60,000 buses, and 3 million freight vehicles.

Sourced by BusinessTech

4. Habib Overseas Bank placed under curatorship:

Minister of Finance Enoch Godongwana has placed Habib Overseas Bank under curatorship with immediate effect to deal with “governance, compliance and operational failures” and protect the bank’s depositors. 

The minister took the decision based on a recommendation by the SA Reserve Bank’s (SARB) Prudential Authority (PA).

In a statement on Monday morning, the SARB said the PA had identified weaknesses in the bank’s governance process and its internal control environment over the past four years.

It added that “various investigations and reviews” found that Habib Overseas Bank was flouting financial sector regulations, including SA’s strict exchange control rules.

“The continuing failure of the bank’s board of directors and management to deal effectively with the weaknesses in controls and its poor regulatory compliance, as well as the growing risks over its ability to meet future obligations,” it said.

Habib Overseas Bank had, by Monday afternoon, updated its website to say that it had been placed under curatorship. “Please note online bank services have been temporarily closed for 72 hours as of Monday 27 March 2023,” the notice read. 

5. Union approaches Concourt:

The SA Municipal Workers’ Union (Samwu) will approach the constitutional court to challenge The Municipal Systems Amendment Act – signed into law by President Cyril Ramaphosa in 2022 – which bars municipal workers from holding political party positions at branch, regional, provincial or national level.

Samwu said that the legislation contravenes clauses in the bill of rights, which state that every citizen is free to participate in a political party’s activities.

All information sourced from articles posted by: News24, Moneyweb, BusinessTech, Fin24, and BusinessDay.

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