Tag: government

By Luke Daniel for The South African 

Government departments and state owned enterprises (SOE) have accumulated irregular expenditure exceeding R72.6-billion.

This is according to an analysis undertaken by the official opposition party, the Democratic Alliance (DA), which has since been reported on by Fin24. The party held a media briefing on Sunday, citing the 2017/18 annual financial reports released by government departments and SOEs.

What is irregular expenditure?
Simply put, irregular expenditure is a term used to describe the gross mismanagement of funds, particularly within the realm of governmental departments and state entities.

Technically, any costs involving state funds which fall outside the parameters of the Public Finance Management Act can be described as irregular expenditure. This wanton wastage of funds is a particularly painful thorn in the side of South Africa’s already uneasy economy, further embittering taxpayers as their hard-earned cash, effectively, goes to waste.

DA says total irregular expenditure could be much more
Natasha Mazzone, the DA’s Shadow Minister of Public Enterprises, addressed the media briefing, adding that not all government departments and SOEs had finalised their financial reports, meaning that the actual amount of irregular expenditure could be much higher.

The official opposition party pointed out that irregular expenditure stood at R42.8 billion last year. This year, that amount has increased by 70%.

Mazzone bemoaned the unsustainability of SOEs, adding that despite revitalisation strategies, most companies still remain wholly incompetent and reliant on government bailouts, saying:

“SOEs are going from one bailout to the next, one disaster to the next. It’s got to a point where it doesn’t matter who you put in the boards because the entities are so broken, it is almost impossible to fix.”

Government irregular expenditure: the main culprits
The DA made its report on the government’s irregular expenditure public, listing, in order, the entities which have recorded the greatest losses.

Here are the top wasters of public funds:

  • Eskom – 19.6 billion
  • South African National Roads Agency (SANRAL) – R10.5 billion
  • Transnet – R8.1 billion
  • Department of Water and Sanitation – R6.2 billion
  • South African Broadcasting Corporation (SABC) – R5 billion
  • Water Trading Entity – R4.9 billion
  • Department of Correctional Services – R3.2 billion
  • Property Trading Management Entity (PTME) – R2.3 billion
  • Department of Basic Education – R1.7 billion
  • Department of Defence – R1.7 billion
  • Department of International Relations and Cooperation (DIRCO) – R1.2 billion
  • South African Social Security Agency (SASSA) – R1.7 billion
  • South African Post Office (SAPO) – R1 billion

By Kgomotso Modise for EWN

The Gauteng government says while it would like to see e-tolls scrapped, it’s not up to the province to make the call.

Last week, while answering to Parliament, Transport Minister Blade Nzimande revealed that over 15 000 motorists have been issued with summonses for outstanding debt.

In July, the provincial ANC announced plans to do away with the disastrous system with Premier David Makhura conceding that it has failed.

Gauteng government spokesperson Thabo Masebe says the e-toll system was introduced by the national government so the province has no power to scrap it.

“The Gauteng government has made its position clear. But we don’t run or operate the e-toll system. This is a national government project and can only be scrapped by them.”

Masebe also says Gauteng has no say in who gets summonsed by roads agency Sanral.

“I can’t talk about Sanral’s fees and the operation of the e-tolls. That must be directed to the national government.”

He says Makhura and President Cyril Ramaphosa agree that something has to be done, but no plan has been finalised.

By Luke Daniel for The South African 

Embattled state owned enterprises (SOEs) are South Africa’s biggest and most dangerous economic stumbling blocks.

This is according to the international rating agency, Moody’s, which points to Eskom’s major failings as a cause for national concern.

State owned enterprises all performing dismally
While speaking at the Investor Service’s conference on Thursday, the agency’s senior credit officer for infrastructure finance, Helen Francis, outlined the dire position most SOEs find themselves in.

The massive financial drain perpetuated by failing SOEs has been well documented. Eskom, in particular, has reported over R19bn in irregular expenditure and continues to rely on government bailouts to stay afloat.

Worrying, Eskom is undoubtedly the largest and most vital SOE – supplying 90% of South Africa with electricity.

Yet, the embattled national power supplier just can’t seem to get back on its feet, following Gupta interference involving former company boss, Brian Molefe. Recently, the company issued an ominous statement, bemoaning the fact that its coal reserves were dwindling as a result of dodgy tenders.

Looking across the entire SOE spectrum paints a dismal picture. It’s not just Eskom that is dying, and in that way draining the already unsteady economy of vital funds. Transnet, South African Airways (SAA), the South African Broadcasting Corporation, and many more national companies are failing to make ends meet.

Corruption still plaguing SOEs
Speaking to Fin24, Futuregrowth Asset Management’s, Olga Constantatos, said that turning the situation around would not be easy and that much more needs to be done.

Constantatos commented on the disease of corruption and gross mismanagement which afflicts both Eskom and Transnet, saying:

“Much more needs to happen. The latest results at Transnet and Eskom point to the circumventing of controls – with Eskom’s R20 billion in irregular expenditure and Transnet’s R8bn. We need to see prosecutions. We need to see arrests of people who were stealing money essentially from you and me.”

Constantatos added that there needs to be stiffer repercussion for SOEs which flout due process, and as such, essentially, steal from the taxpayer and investors, saying:

“As bond investors, we are custodians of the nation’s pension funds. We should not be allocating capital to institutions where there is malfeasance, or lend blindly to companies that are not responsible.”

Source: Fin24

The rand briefly broke below R14.00 to the US dollar following the news that Parliament’s portfolio committee on public works withdrew its expropriation bill on Tuesday.

The public works committee said in a short statement that it “officially resolved, in accordance with Joint Rule 208 (2), to reject (withdraw) the Expropriation Bill [B4D of 2015] so that it may be re-introduced at a later stage”. The bill is separate to the review of section 25 of the Constitution currently under way to make it possible for the state to expropriate land without compensation.

The rand, which immediately firmed to R13.95/$, returned to trade 0.06% firmer at R14.15 to the greenback by 17:13 in Johannesburg.

Important to note is that the expropriation bill existed before the latest processes on land expropriation and was referred back to Parliament by former president Jacob Zuma, who said consultation around the bill was inadequate.

Zuma returned the bill to parliament in 2017 due to inadequate public participation for the bill.

During its December conference, the ANC and its delegates agreed that expropriating land without compensation should be among mechanisms to effect land reform.

The condition was that expropriation should not undermine the economy, agricultural production and food security.

The constitutional review committee is due to report back to Parliament regarding its findings from the nationwide hearings on expropriation soon.

By Giovanni Buttarelli for The Washington Post 

First came the scaremongering. Then came the strong-arming. After being contested in arguably the biggest lobbying exercise in the history of the European Union, the General Data Protection Regulation became fully applicable at the end of May.

Since its passage, there have been great efforts at compliance, which regulators recognize. At the same time, unfortunately, consumers have felt nudged or bullied by companies into agreeing to business as usual. This would appear to violate the spirit, if not the letter, of the new law.

The GDPR aims to redress the startling imbalance of power between big tech and the consumer, giving people more control over their data and making big companies accountable for what they do with it. It replaces the 1995 Data Protection Directive, which required national legislation in each of the 28 E.U. countries in order to be implemented. And it offers people and businesses a single rulebook for the biggest data privacy questions. Tech titans now have a single point of contact instead of 28.

The new regulation, like the old directive, requires all personal data processing to be “lawful and fair.” To process data lawfully, companies need to identify the most appropriate basis for doing so. The most common method is to obtain the freely given and informed consent of the person to whom the data relates. A business can also have a “legitimate interest” to use data in the service of its aims as a business, as long as it doesn’t unduly impinge on the rights and interests of the individual. Take, for example, a pizza shop that processes your personal information, such as your home address, in order to deliver your order. It may be considered to have a legitimate interest to maintain your details for a reasonable period of time afterward in order to send you information about its services. It isn’t violating your rights, just pursing its business interests. What the pizza shop cannot do is then offer its clients’ data to the juice shop next door without going back and requesting consent.

A third aspect of lawfully processing data pertains to contracts between a company and client. When you purchase an item online, for example, you enter into a contract. But in order for the business to fulfill that contract and send you your goods, you must offer credit card details and a delivery address. In this scenario, the business may also legitimately store your data, depending on the terms of that limited business-client relationship.

But under the GDPR, a contract cannot be used to obtain consent. Some major companies seem to be relying on take-it-or-leave-it contracts to justify their sweeping data practices. Witness the hundreds of messages telling us we cannot continue to use a service unless we agree to the data use policy. We’ve all faced the pop-up window that gives us the option of clicking a brightly colored button to simply accept the terms, with the “manage settings” or “read more” section often greyed-out. One of the big questions is the extent to which a company can justify collecting and using massive amounts of information in order to offer a “free” service.

Under E.U. law, a contractual term may be unfair if it “causes a significant imbalance in the parties’ rights and obligations arising under the contract that are to the detriment of the consumer.” The E.U. is seeking to prevent people from being cajoled into “consenting” to unfair contracts and accepting surveillance in exchange for a service. What’s more, a company is generally prohibited to process, without the “explicit consent” of the individual, sensitive types of information that may reveal race or political, religious, genetic and biometric data.

Indeed, regulators are being asked to determine whether disclosing so much data is even necessary for the provision of services — whether it is ecommerce, search or social media. One key principle to remember is that asking for an individual’s consent should be regarded as an unusual request, given that asking for consent often signals that a party wants to do something with personal data that the individual may not be comfortable with or might not reasonably expect. Thus, it should be a duty of customer care for a company to check back with users or patrons honestly, transparently and respectfully. As the Facebook/Cambridge Analytica scandal revealed, allowing an outside company to collect personal data was not the type of service that users would have reasonably expected. Clearly, abuse has become the norm. The aim of the EU data protection agency that I lead is to stop it.

Independent E.U. enforcement authorities — at least one in each E.U. member state — are already investigating 30 cases of such alleged violations, including those lodged by the activist group NOYB (“none of your business”). The public will see the first results before the end of the year. Regulators will use the full range of their enforcement powers to address abuses, including issuing fines.

The GDPR is not perfect, but it passed into law with an extraordinary consensus across the political spectrum, belying the increasingly fractious politics of our times. As of June, there were 126 countries around the world with modern data protection laws broadly modeled on the European approach. This month, Brazil is next. And it will the biggest country to date to adopt such laws. It is likely to be followed by Pakistan and India, both of which recently published draft laws.

But if the latest effort is a reliable precedent, data protection reform comes around every two decades or so — several lifetimes in terms of the pace of technological change. We still need to finish the job with the ePrivacy Regulation still under negotiation, which would stop companies snooping on private communications and require — again — genuine consent to use metadata about who you talk to as well as when and where.

I am nevertheless already thinking about the post-GDPR future: a manifesto for the effective de-bureaucratizing and safeguarding of peoples’ digital selves. It would include a consensus among developers, companies and governments on the ethics of the underlying decisions in the application of digital technology. Devices and programming would be geared by default to safeguard people’s privacy and freedom. Today’s overcentralized Internet would be de-concentrated, as advocated by Tim Berners-Lee, who first invented the Internet, with a fairer allocation of the digital dividend and with the control of information handed back to individuals from big tech and the state.

This is a long-term project. But nothing could be more urgent as the digital world develops ever more rapidly.

Government’s entire IT system goes down

By Gaye Davis for EWN 

It has emerged that not only Home Affairs but IT systems across government were affected by Friday’s power outage.

The head of the State Information Technology Agency (Sita) has told Parliament that the power outage that caused Home Affairs’ systems to shutdown triggered a “catastrophic event” that affected all of government.

Sita CEO Dr Setumo Mohapi and the Department of Home Affairs have been called to Parliament to explain what went wrong.

Mohapi has painted a worrying picture of system and communication failures.

Sita’s generator kicked in when power from Tshwane municipality failed at 2am but its fuel pump burned out for reasons that are as yet unclear.

An overloaded UPS battery system then went into distress and systems had to be shut down at Home Affairs as well as government’s entire IT plant.

Mohapi on Tuesday explained: “It was a catastrophic event that affected not just Home Affairs but the entire IT system of government.”

Mohapi’s apologised for what happened, including a second power outage that took place on Monday, when Home Affairs systems were again down for around 90 minutes.

Mohapi says he wasn’t informed until hours after the power outage. Home Affairs’ acting Director-General Thulani Mavuso says they also had no early warning, leading to their systems crashing rather than being properly shut down.

Source: The Citizen

The Democratic Alliance says the department of energy’s no-show at a parliamentary meeting on fuel hikes is ‘disrespectful’ to people struggling with the high cost of living.

Davis was reacting to Energy Minister Jeff Radebe and his department’s failure to pitch for a meeting with MPs about fuel hikes.

“Minister Radebe and the energy department’s failure to turn up at an energy portfolio committee meeting on the petrol price is the clearest indication yet that government has no plan to deal with escalating fuel costs.

“This no-show by a government delegation was disrespectful to parliament and, more importantly, disrespectful to the millions of South Africans who are struggling with the high cost of living,” he said.

Davis said Radebe was supposed to communicate on the petrol price in the second week of July, but he had said nothing.

“This was his opportunity to offer South Africans hope that government had a plan to cushion the blow of high fuel costs. The minister has an opportunity to prove us wrong by appearing before the committee next Tuesday and presenting a credible plan to bring down the price of petrol,” he said.

Earlier on Tuesday, chairperson of the portfolio committee on energy Fikile Majola also slammed Radebe’s department for what he described as a “boycott” of the meeting.

Majola said the minister would be summoned to parliament next week to explain the department’s failure to attend the meeting.

Petrol price has increased from R13.76 in March to R16.02 in July.

By Siviwe Feketha for IOL; HuffPost 

In an unbelievable development, the ANC says it is “shocked” by the scale of corruption in government. In a document called “ANC briefing notes: key ANC politicies and government programmes”, reportedly prepared for the 2019 election, the party notes that there has been an increase in corruption despite the creation of crime-fighting institutions.

According to The Star, the document says, “The [past] year has revealed many new cases of corruption, and like all South Africans, we are shocked by the scale of corruption and the allegations of state capture, which we are determined to root out.”

South Africans, however, were not so shocked. Or, rather, they were shocked, just not for the same reasons as the ANC.

The ANC is reportedly “shocked” by the scale of corruption in the state, and has conceded that despite setting up mechanisms to combat graft, “powerful individuals” had managed to loot government coffers.
The governing party has vowed to take a tougher stance on corruption as part of its election campaign, with measures including subjecting public servants and senior politicians to lifestyle audits.

This is contained in a document titled “ANC briefing notes: key ANC policies and government programmes”, prepared for the elections in 2019.

The party held an elections workshop at the weekend in Irene, outside Pretoria. The workshop was tasked with crafting the party’s election manifesto, which will be used to drum up support for the general elections when the party faces its biggest contest since 1994, with good governance and the land issue set to be the main themes for their campaign.

In the document, the ANC admitted that in spite of creating institutions such as the Hawks and the Special Investigating Unit, there has been an increase in corruption cases.

“In spite of these efforts, powerful individuals have managed to loot government resources. This goes against every value and principle the ANC fought for.

The ANC said it was determined to root out corruption because it undermined service delivery.

“We will use Parliament, commissions, investigators and the courts to get to the bottom of the problem and deal with the offenders. As the ANC, we will take strong action against any of our leaders guilty of corruption.

“It is unacceptable that parts of the state have been used to serve personal interests,” the party stated.

Power utility Eskom, rail company Transnet, arms manufacturer Denel and the Passenger Rail Agency of SA (Prasa) are among a number of state-owned companies that fell prey to the looting spree.

The party is now pushing for the strengthening of the Special Investigation Unit to boost the investigation of corruption in the public service.

“The corruption and state capture inquiries in Parliament in 2017 and 2018 addressed misspending and looting at state-owned companies and departments. In the first few months of 2018, the boards and top management were replaced at Eskom, Transnet, SAA and Prasa to start the clean up.

“Many of the offenders will be prosecuted. Ministers responsible for departments involved were also replaced,” the party noted.

“There are court cases, disciplinary processes or investigations into the conduct of many of those who were meant to protect us from corruption – among them senior prosecutors, police and investigators, Sars, intelligence agencies and politicians,” the ANC said.

As part of its vision for 2030, the ANC aims to improve the capacity of senior managers in government through assessment and ongoing training. It will also subject senior public servants to lifestyle audits.

The party said it was not for sale, and that those who donate to it should not expect tenders in return.

Delivering his keynote address at the workshop, President Cyril Ramaphosa said South Africans were not despondent, as they have seen the swift action taken by the government since he took over.

“They see the work we are doing to end state capture and corruption, and to restore our state-owned enterprise to financial and operational health. Many of our people have become actively involved in the debate on land reform and the measures taken to urgently accelerate land redistribution and drive the agricultural revolution they want to see,” he said.

On land reform, the ANC has admitted that its government had failed to effectively deal with the land question, since it took over the reins of government in 1994, adding that expropriation without compensation would be used to help address dispossession of black people.

The party said instead of paying for land – which was expensive – the state had to help new farmers with financial support, as they often failed and sold their land back to the whites.

“Since 1994 we have implemented a policy of land claims and land reform to reverse the apartheid injustice. There has been very slow progress and the patterns of the past have not really changed. Land has been expensive to buy and we spent more than R50billion on land reform.

“New farmers who have benefited from land claims or land reform find it difficult to farm profitably without access to water rights, loans and technical support,” the party said.

The party has, however, rejected the EFF’s proposition that all land be nationalised, including current land occupations across the country which the red berets have endorsed.

“The ANC wants change but we want most of our land to belong to the people, not the state. We believe in a mix of private land ownership and communal or state ownership, where it makes more sense to go that route,” the ANC added.

It warned that land allocation would soon be dominated by crime syndicates, if illegal land invasions were allowed to continue.

By Sibongile Khumalo for Fin24

Government welcomed the signing of a three-year multi-term Public Service wage agreement, although it exceeded the 2018 Medium Term Expenditure Framework by R30bn.

According to the Department of Public Service and Administration, the R110bn provision for the salary adjustments for the period from 2018/19 to 2020/21 was made in the 2018 Medium Term Expenditure Framework (MTEF).

“The 2018 salary agreement exceeds this amount by R30 Billion over the Medium Term Expenditure Framework,” the department said in a statement.

“This then calls for cost containment measures to ensure that the wage bill remains within the existing compensation ceilings,” it added.

The Public Service Coordinating Bargaining Council (PSCBC) last week said 65.74% of trade unions had agreed to salary adjustments and improvements on conditions of service in the sector for three years, from 2018/19 to 2020/21.

For 2018/19 level 1-7 workers agreed to a 5.5% CPI linked increase, plus a 1.5% , the pay would then be hiked by a CPI related rate for the next two year, with an additional 1%.

Government said the agreement was reached after “a long and difficult negotiations process”.

Employees in the level 8-10 scale would get a CPI rate plus 1% for the current year, followed by 0.5% for the next years, while those in the level 11-12 bracket would receive an increment of 0.5% for this year on top of the CPI. The highest grade will only get a CIP rate for the following year.

Also included, is that the housing allowance of R1 200.00, which would be increased annually by the average CPI of the preceding financial year on an annual basis.

The country’s bulging public wage bill has been a major source of challenge raised by international lenders and rating agencies.

“As government we are glad that we have reached another multi-term agreement,” said Minister of Public Service and Administration Ayanda Dlodlo.

She stressed that the negotiations took place amid growing concerns over the escalating public service wage bill and a contracting economy, which pose serious challenges to the already strained government fiscal purse.

“The agreement proves that it is possible for both parties to reach an amicable agreement that puts the stability of the country and service delivery first.”

The adjustments will be effected on the 1st of July of each year.

Discussions reached a deadlock earlier this week, with the Public Servants Association (PSA) demanding a 12% wage increase across the board. Government offered a 7% increase for lower level workers, 6.5% for mid-level employees and 6% for senior managers.

Unions had started tabling demands in September 2017.

By Jason Milford for Centurion Rekord 

This week, a group of Centurion businessmen demanded to know why a “stationery supply” company got a tender from the metro to fix a massive sinkhole in the area.

The group is involved in a class action suit against the metro, which they accuse of dragging their feet in repairing the sinkhole at the intersection of Jean Avenue and Gerhard Street.

Jacques Classen, the attorney representing the class act, said there is reason to believe that the incorrect measures were followed to appoint the contractor, Gaborena.

Classen wanted to know why Gaborena would need a sub-contractor while they are appointed as the main contractor.

“According to Gaborena’s main object and purpose describing their business, they mainly supply stationery and manufacture wooden and woven products,” said Classen.

Classen also said the metro must prove they followed the correct procurement procedures and processes to appoint Gaborena.

The class act also wanted the metro held liable for contempt of court for not supplying documentation.

Mayoral spokesperson Sam Mgobozi said the metro is aware of Gaborena’s appointment of a sub-contractor.

He said it was not unusual for service providers to do so.

Mgobozi also said the metro had to broaden its scope and network to appoint an appropriate contractor for the sinkhole.

© Centurion Rekord

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