SA’s gender pay gap shrinks dramatically

By Carol Paton for Business Day 

The gender pay gap has shrunk dramatically, especially among low paid workers since the end of apartheid, but women at the top still face discrimination, a study by a University of Cape Town researcher has found.

In 1997, at the bottom end of the earnings spectrum, men earned 60% more than women. By 2014 this had diminished to 7%, said economist Jacqueline Mosomi in a paper based on her PhD thesis, published by the UN’s University World Institute for Development Economics Research.

The change is mostly attributable to the implementation of new minimum wages. Minimum wages for domestic and farm workers were introduced in November 2002. Women have also had better access to education since democracy, and marriage and fertility rates have declined.

“In general, in SA gender wage inequality was high because there were more women in low-paying occupations. There has been a substantial decline due to the implementation of minimum wages,” said Mosomi.

But at the top, despite having more years of education than men, women remain under-represented at senior levels and occupy jobs that are lower-paying. Mosomi’s paper found that more affluent and educated women were big beneficiaries of employment equity legislation and the gender wage gap dropped sharply from 48% in 1993 reaching 18% in 2014.

The Employment Equity Act, which requires companies to submit plans to the department of labour to bring the workforce in line with demographic categories, was passed in 1998.

“Women who already had high-quality skills were able to benefit from employment equity legislation but once that effect had taken place, the trend began to reverse. Now, even though women have more education than men they receive lower returns,” she says.

Mosomi says that the wage gap at the top does indicate discrimination but is also due to the type of work women do, which is often more administrative and less technical than occupations dominated by men.

Women in the middle of the earnings spectrum have benefited least in the post-apartheid era. At the mean — that is the half-way point in the wage distribution spectrum — the gender wage gap has hardly shifted. Men still earn 23% to 35% more than women. Mosomi says that other research has found that most occupations that fall into the median earning still tend to be male-dominated.

These jobs include elementary, service, craft or operational work. Gender analysis has shown that these occupations and the industries in which they are located are still dominated by men.

At the Jobs Summit held last October, Business Unity SA (Busa) undertook to encourage its members to voluntarily disclose the gap between the top and bottom paid as well as the gender pay gap. Busa said it would do this with a view to making disclosure compulsory over the next 12 months.

Home Affairs website down for two weeks

The Department of Home Affairs website has been unavailable for nearly two weeks without any indication of when it will be back online.

The website initially displayed a message saying “The main website is currently offline. Emergency Maintenance as 10 April 2019”.

The website linked to a few Home Affairs services which were still online, including its online application process.

The holding page has since disappeared and the website is now completely offline, giving the error message “The requested URL could not be retrieved”.

The Department of Home Affairs continued to post pictures and videos of Minister Siyabonga Cwele on Twitter, but did not mention its website downtime.

The images below show what visitors to the Department of Home Affairs website were greeted with over the last two weeks.

SA blackouts may cut growth close to zero

By Rene Vollgraaff and Londell Phumi Ramalepe for Bloomberg/Fin24

South Africa’s power cuts could bring economic growth for the year close to zero if they continue at the same severity seen in March, the central bank said.

The wave of rolling blackouts that started in November and are among the worst the country has yet experienced could knock 1.1 percentage point off economic growth, the Reserve Bank said in its Monetary Policy Review released Wednesday in Pretoria, the capital.

Expansion of close to zero would be the worst outcome since 2009, when former President Jacob Zuma came to power.

The nation’s embattled power utility, Eskom, implemented so-called stage 4 load-shedding, which removed about 10% from the grid, last month as ageing plants were offline. The company is battling with high debt levels and declining revenue after years of financial mismanagement. It was at the center of alleged looting under the previous administration that’s referred to locally as state capture.

“It has become clearer, however, that the legacy of state capture of which load shedding is one symptom will constrain growth for a longer period,” the Reserve Bank said. “The damage done by state capture is worse than previously understood.”

The country’s economy went through a recession last year and hasn’t expanded at more than 2% annually since 2013. Growth will only pick up once domestic constraints are dealt with, Deputy Governor Kuben Naidoo said in a presentation after the release of the Monetary Policy Review. Gross domestic product increased 0.8% in 2018.

The central bank pointed out that its estimates, which also show 125 000 jobs could be lost, assume load shedding will persist at high levels throughout the year, and don’t incorporate longer-term costs such as forfeited investment.

“It’s unclear to what extent firms and household have now made their own plans to manage or avoid their reliance on Eskom, which could mitigate growth costs,” the Reserve Bank said.

By Siviwe Feketha for IOL

Former president Thabo Mbeki has warned about the ANC’s call for the nationalisation of the SA Reserve Bank, saying it would not result in any material achievement. Picture: Dimpho Maja/African News Agency (ANA)
Johannesburg – Former president Thabo Mbeki has warned about the ANC’s call for the nationalisation of the SA Reserve Bank, saying it would not result in any material achievement.

Mbeki was speaking at the Gauteng ANC pavilion at the Rand Easter Show in Nasrec, south of Johannesburg, where he declared his intention to vote and campaign for the ANC in the upcoming election.

Since his defeat by his successor, Jacob Zuma, at the 2007 national conference in Polokwane and his recall by the party in 2008, Mbeki has not been active in ANC politics.

He said while he found it impossible to campaign for the party under Zuma due to wrongdoings, President Cyril Ramaphosa and his government demonstrated a commitment of addressing the party’s challenges.

“It is in that context that it becomes possible to come back and to be active publicly like this,” he said.

However, he criticised the party’s 2017 national conference resolution which called for the nationalisation of the Reserve Bank.

“I don’t know what anybody would gain by that nationalisation of the Reserve bank, except to say we have nationalised. Nothing would change in terms of the behaviour of the Reserve Bank, nothing,” Mbeki said.

He said while many in support of the move said they wanted the central bank to move away from inflation targeting, nationalising it would not result in policy change.

“Inflation targeting is not the decision of the Reserve Bank. It is a decision of the South African government. It is the government which said there must be inflation targeting and these are the targets between three and six percent. That is government and the Reserve bank implements,” he said.

New bill aims to ‘regulate’ Airbnb in SA

The public has 60 days from Monday April 15 to submit comments on the Tourism Amendment Bill, which will regulate short-term accommodation in the so-called shared economy, Blessing Manale, chief director of communications at the Department of Tourism, told Fin24 on Monday.

Airbnb is an example of such a business model.

“We are not trying to ‘kill’ Airbnb-type accommodation, but there is currently no legislation stipulating who is responsible for regulating that industry,” he said.

The bill was published in the Government Gazette on Friday April 12 and re-published on Monday April 15, due to a printing glitch. The bill will enable the minister of tourism to determine certain so-called “thresholds” for short-term home rentals.

According to Manale, these could include a limit on the number of nights guests could stay at an establishment. It could perhaps even limit the number of guests due to potentially larger water consumption in an area. Thresholds could also look at pricing, zoning, how much an establishment can earn and maybe even regulating matters like security.

“It is ultimately to ensure we bring all the various types of short-term accommodation into one pot. We want to make sure that whatever shared economy business model comes here, we are ready for it,” said Manale.

The Department of Tourism plans to discuss with provincial and local governments on issues like oversight on zoning and whether Airbnbs-type establishments should only be allowed to operate in certain areas.

“We are proposing to first empower the minister of tourism and then he can decide what should be the biggest priorities, for instance for thresholds,” said Manale.

He emphasised that it is not about whether operations like Airbnb and should exist or not.

“They are, however, mostly self-regulating. We now just want to hear both sides – from those having such accommodation establishments and those who feel it is hampering the more ‘formal’ tourism industry,” he said.

“The bill is now under public consultation. We just want to gather input from the industry, local government and even tax experts on how to deal with income, for instance, that might be falling through the cracks.”

The department is in the process of holding seminars and workshops to inform people about the bill and its proposed changes for the shared-economy.

“There is still a long way to go,” said Manale.

“From government’s side, we realise that it will be useless to make regulations if we cannot ‘police’ it,” he said.

“Those running the likes of Airbnbs need not worry that government wants to ‘kill’ the shared economy in the tourism industry. It is a business model that works. The intention of the bill is rather to create the best outcome for the local tourism industry.”

More information on how to submit comments on the bill can be obtained from Mmaditonki Setwaba on msetwaba@tourism.gov.za or 012 444 6312.

By Alistair Anderson for BusinessLive

Listed property fund managers are hopeful that the rescue mission at SA’s largest clothing retailer, Edcon, is an isolated case and that other retailers will not have to beg landlords and investors for rental reductions or cash injections.

Edcon is a large employer, with 40,000 staff, while its operations also affect numerous suppliers and 100,000 workers indirectly.

A number of the landlords where Edcon rents stores have assisted it by either granting a rent reduction or by investing cash, both in exchange for equity.

Edcon also achieved a recapitalisation deal worth R2.7bn at the end of February. These funds were raised by some of SA’s biggest landlords, banks and the Public Investment Corporation (PIC).

Property analysts and fund managers argue that it is in the national interest for Edcon to survive.

Edcon has been battling to save jobs following some poor strategic decisions and mounting competition from newer retailers who have eaten into its market share over the past decade. In the past few weeks, it managed to sign a rental savings deal with a fifth of its landlords so that CEO Grant Pattison could implement a turnaround plan. This plan includes selling or closing underperforming businesses and flattening management structures.

“The collapse of Edcon would have posed a systemic risk to the retail sector in SA. Edcon does appear to also have a more focused and simplified strategy, which I think is important as the various landlords that supported the recapitalisation would have taken comfort from this,” said Pranita Daya, a real estate analyst at Anchor Stockbrokers.

“Furthermore, an Edcon failure would have resulted in massive job losses and these landlords exercised good corporate citizenry in working towards a commercial solution,” Daya said.

Edcon approached 30 of about 100 landlords, with 21 agreeing to reduce rent for two years, while the turnaround plan was implemented, in exchange for stakes in the group. Others injected cash in exchange for equity.

Other retailers have not asked their landlords for rental reductions despite weak economic conditions, and a lack of consumer and business confidence. This was confirmed by Growthpoint SA CEO Estienne de Klerk.

While Growthpoint, which is the largest property group in the country, participated in Edcon’s restructuring by providing it with an injection of R110m in return for an equity stake, it said a rental reduction for the troubled retailer would not have been in line with its own strategy.

Hyprop Investments, which owns blue-chip malls such as Hyde Park Corner, Clearwater Mall and Canal Walk, however, did agree to a rental reduction. CEO Morne Wilken said if any other tenants opted for a rental reduction, Hyprop would need to recognise value in acquiring an equity stake in return.

One landlord who also declined to reduce rentals paid by Edcon but had chosen to implement cash for equity was Liberty Two Degrees; the owner of stakes in malls such as Sandton City, Melrose Arch and Eastgate. The company’s CEO, Amelia Beattie said she had not been approached by any tenants other than Edcon about rental savings.

“Edcon is a specific case. We didn’t decrease rentals and our leases with Edcon have not changed. Instead we are making cash contributions,” she said.

Beattie said the company focused on creating environments where tenants could trade well. “We negotiate our leases with our tenants’ stores case by case. There is demand for space at our malls, which can be seen with how quickly we relet the space vacated by Stuttafords.”

Do credit card fees go beyond the law?

Source: Supermarket & Retailer

The National Credit Act (NCA) prohibits a credit provider from charging any fees or charges not listed in section 101 of the act. One of the permitted charges is a “service fee”. Regulations under the act cap this fee at R60 a month, unless an exemption applies.

So, is it legal for banks to charge credit card account holders a “card fee” or a “credit facility fee” over and above a monthly service fee? If not, why has the National Credit Regulator (NCR) done nothing to stop banks from doing so?

At the beginning of last year, Standard Bank started levying a “card fee” on anyone who has a standalone credit card, which is one that is not offered as part of an account with a bundle of transactions for a set fee.

The bank said the fee was to cover the costs of “the administration and maintenance of all the value-added services and features” associated with the credit card.

At the time, Nthupang Magolego, a senior legal adviser at the NCR, said the act provided a “closed list” of fees that a credit provider was allowed to charge under a credit agreement, and a card fee was not one of them.

She said the regulator would “investigate and take appropriate action” if an illegal fee was being charged.

More than a year later, the regulator will not say whether or not it investigated the issue. It has ignored requests for comment.

All of the big five banks are now charging either a card fee or a credit facility fee on some or all of their credit cards.

Ethel Nyembe, the head of card issuing at Standard Bank, also wouldn’t answer questions relating to an investigation by the regulator into the bank’s credit card fees.

Credit cards provide access to certain lifestyle offerings such as access to airport lounges and cinemas.

Customers who don’t want these benefits can use alternative credit offerings such as personal loans, overdrafts and certain credit cards from which such offerings are removed, says Nyembe.

Cilliers Kriel, CEO of the credit card division at FNB, says the bank’s credit card is more than a credit facility. It’s also a “financial services product”.

“The credit card account is a financial services product as defined in the Financial Advisory and Intermediary Services Act which can be used to make deposits, withdrawals, earn credit interest, make payments either by swiping at merchants or by debit order.

“The credit facility gives the customer the option to borrow, up to an agreed limit . The credit facility is attached to and maintained in association with the credit card account.”

Absa and Nedbank also separate the charges on the card account from those charged for a credit facility.

The NCA permits a credit provider to charge fees relating to the financial services agreement or account beyond those listed in the act for a credit agreement, says Kriel.

But Trudie Broekmann, an attorney who specialises in consumer law, says the act does not define a “financial services account”, so it’s not clear what the lawmakers intended by this.

Only if they intended to include a credit card account in the definition can the banks rely on the exemption and charge more than the R60-a-month service fee, she says.

In her opinion, the section of the act that treats the credit facility and the financial services account as separate components was drafted with an overdraft facility linked to a cheque or current account in mind. With an overdraft facility, it’s clear the credit facility (the overdraft) is secondary to the financial services account (the cheque/current account) and so regarding the two as separate components does not appear to be misplaced, she says.

“In the case of a credit card account, however, the credit facility and the financial services account are one and the same and it seems artificial to regard the account and the facility as separate components subject to separate service charges.”

No-one opens a credit card account without a credit facility and the primary function of a credit card account is to provide access to the credit facility, she says.

Treating them as separate components and charging you for each is like a supermarket charging you separately for an egg shell, egg white and egg yolk, she says.

Broekmann says it can be argued that the banks are in breach of the act when they charge you more than R60 a month on your credit card.

“This contention should be tested and I would be eager to represent a group of credit card holders . in taking the complaint to the National Consumer Tribunal to reach clarity on this aspect.”

By Crecey Kuyedzwa for Fin24 

Former white commercial farmers in Zimbabwe who had their land expropriated under the fast track land reform programme in the early 2000’s have accepted government’s offer of an interim payment of RTGS$53m (R238m at current exchange rates).

In 2000 Zimbabwe expropriated land from white commercial farmers without compensation and distributed it to landless black people and the connected elite, who now own multiple farms.

The country budgeted RTGS$53m in its 2019 national budget as compensation to the former farmers, and the offer has now been accepted by a union representing them. The compensation is for farm improvements.

Zimbabwe introduced a new currency called the RTGS$, or real-time gross settlement dollar, in February. One RTGS$ can buy R4.50, according to the Reserve Bank of Zimbabwe on Monday morning.

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In a statement the Commercial Farmers Union said they had to accept the advanced interim payment as some farmers were in financial distress.

“As this is a limited fund, it is hoped that those who are not in financial distress do not take it up so as to maximise the effect on others not so fortunate.”

The total bill could run into billions and the Zimbabwean government is working with international financial institutions on how best to fund the compensation.

In its own statement on the issue, which was released over the weekend, the Zimbabwean government said by end of April 2019 the registration papers for beneficiary farmers would be complete and disbursements will commence.

Valuations for farm improvements are also expected to be completed by end of May 2019, reads the statement.

Expect temporary downtime at SARS

Source: Algoa FM

The South African Revenue Services (SARS) on Monday announced it will be migrating to a new hosting platform for its electronic services this month.

SARS said the “new and reliable platform” features the latest technology on the market, and includes a refresh of SARS’ hardware and software.

According to a statement, this is part of their journey towards digital transformation, which is expected to deliver a myriad of innovative solutions in support of their mandate to make it easy and safe for taxpayers to comply.

During the migration the following services will be affected:

  • SARS eFiling
  • eFiling app
  • e@syFile
  • Employer and SARS website

The Customs Electronic Data Interchange (EDI) gateway, which is the primary electronic channel used by Customs clients to communicate with SARS, will not be impacted.

Clients are encouraged to conclude all transactions on these systems well before the migration. However, urgent transactions that need to be made during this period can be done manually at all of their branches which will operate on normal hours.

Source: Supermarket & Retailer

Data shows that 2 out of 3 South African consumers participated in Black Friday shopping at some point, according to Isana Cordier, sector head for consumer goods and services, corporate and investment banking at ABSA.

ABSA card data indicates that, on average, every last Friday of the month consumers spend about 55% of purchases on groceries.

On Black Friday, however, this changes and durable goods make up about 20% of purchases.

“It, therefore, seems that consumers are holding back spending on those durable items to buy them on Black Friday. South Africans especially like to spend on electronics on Black Friday,” Cordier said at a recent consumer insights event hosted by ABSA in Cape Town.

Black Friday has become the biggest spending day of the year in the SA retail sector, with more than R3bn spent last year.

Another interesting trend for her is that, whereas Black Friday shopping in SA was initially mostly centred around Gauteng and the Western Cape, the “frenzy” has started to spread to other provinces as well.

For instance, the Eastern Cape now makes up about 7.2% of Black Friday spending in SA, KwaZulu-Natal 14.2% and the Free State 4.1%. Gauteng still accounts for 37% of spending in SA on Black Friday.

Fin24 reported last year that retail sales over the Black Friday and Cyber Monday period most likely “saved” the South African economy in November, according to the BankservAfrica Economic Transaction Index (BETI).

On Black Friday and Cyber Monday, a total of 5.2 million card transactions were recorded.

More significantly, according to the BETI report, there was 55% growth in online sales for Black Friday and 36.4% for Cyber Monday.

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