News in South Africa 5th May:
1. Unions striking water supply:
Rand Water has given assurance that it’s highly unlikely water supply will be impacted if the South African Municipal Workers’ Union (Samwu) goes on a protected strike – but a union representative says it’s a case of “wait and see”.
Samwu has announced that it will be embarking on a protected strike action at Rand Water from 13 May 2021.
And while essential services may not be interrupted, a union representative says it’s “easier said than done” to promise service delivery will not be impacted.
Rand Water is a bulk water utility that supplies municipalities and industries in Gauteng, the North West, the Free State and Mpumalanga.
“This has been one of the most painful decisions that we have had to take as workers because we know the impact that this will have on residents.
“It is, however, important to note that before we are employees of Rand Water, we are community members and, as such, we too want clean water running in our homes,” the union said in its statement.
2. SAA subsidiary relief:
Subsidiaries of South African Airways (SAA) are to get around R2.7 billion from the R10.5 billion allocated to the airline to implement its business rescue plan.
SAA Technical (SAAT) will receive R1.663 billion, Mango Airlines R819 million, and Air Chefs R218 million.
This follows the tabling of a Special Appropriation Bill by the Minister of Finance on Tuesday.
“Despite the effective date of this Act, the appropriation for the subsidiaries … must be regarded as an appropriation and expenditure for the 2020/21 financial year,” states the bill.
The Chief Director of state-owned enterprises at National Treasury, Ravesh Rajlal, told parliament’s standing committee on appropriations on Tuesday that at the time of the funding allocation for SAA, the Department of Public Enterprises (DPE) informed the treasury that the allocations made to SAA subsidiaries in the business rescue plan may change due to the expected restructuring of the airline when the interim board takes over.
“If more funding beyond the R819 million is required for Mango then that amount will have to be looked into from the existing R2.7 billion,” he said.
“It’s hard to see the value of the amounts given to SAA. This is why we [National Treasury] have issued the instruction note on government guarantees to make a bit more stricter in terms of how government guarantees are actually applied for and awarded,” he said.
3. Medical co-payments undesirable:
The Council for Medical Schemes has indicated a possible move against ‘co-payments’ as part of medical aid plans, calling them “undesirable”. Members of medical schemes are often required to make additional payments when visiting pharmacies, doctors or health professionals that are not part of a network tied to any given scheme.
This has led to many smaller, independent or community healthcare services being prevented from forming part of daily healthcare for members.
The CMS will be publishing new guidelines on co-payments in the coming months, with a report expected by August.
4. No extension to Covid grants:
Treasury says there’s been no new money put forward to extend the special R350 COVID-19 grant.
Earlier Reuters reported that National Treasury had put forward an extra R4 billion to buy vaccines and extend the social grant.
The report said the allocation was included in a Special Appropriation Bill tabled by Finance Minister Tito Mboweni on Tuesday.
That report, which was based on old figures has since been withdrawn with Treasury saying there has been no new allocation.
Civic groups have called for the R350 grant to be extended.
5. New state bank of SA:
The National Treasury says that it will move forward on its plans to introduce a new state bank for South Africa.
Presenting to parliament on Tuesday (4 May), Treasury director-general Dondo Mogajane said that the new bank forms part of structural reforms that were announced by president Cyril Ramaphosa as the country focuses on a post-Covid recovery.
It is expected to help provide financial assistance to South Africans who are most in need. However, members of the committee have accused Treasury of dragging its feet on the issue, with the ANC promising to introduce a new state bank for more than a decade.
Mogajane said that a large amount of the technical work for the new bank has now been completed and that a memorandum has been prepared for the cabinet which outlines some of the possible forms the bank could take.
Some of the proposals include dissolving the current Postbank and creating a new state bank, or creating an entirely new state-backed finance institution from scratch, he said.
“If we had such an entity, even the R200 billion that we asked banks to administer could be channelled to it. And truth be told, our banking sector is risk-averse.
All information sourced from articles posted by: BusinessTech, Business Insider, Fin24, Moneyweb, and ENCA.
