2021 Budget in a nutshell

Source: SA Commercial Prop News

Finance Minister Tito Mboweni on Wednesday delivered the toughest budget since the dawn of democracy. His speech comes in the wake of shocking unemployment figures that were shared by Stats SA on Tuesday.

The unemployment rate in the fourth quarter of 2020 increased by 1.7 percentage points to 32.5% compared to the third quarter. This is the highest since the start of the Quarterly Labour Force Survey (QLFS) in 2008.

Taxpayers can breathe a sigh of some relief as Finance Minister Tito Mboweni tabled a 2021 Budget Speech free from substantial tax hikes and that will bankroll South Africa’s Covid-19 vaccination programme.

The Budget Review said total consolidated spending is expected to amount to R6.16 trillion over the next three years or R2 trillion each year over the medium term, with the majority of the spending going towards social services.

Covid-19 vaccine funding

Government has set aside R19.3 billion to fund Covid-19 vaccines, in the interests of saving lives and supporting the economic recovery. R10 billion will be used for the purchase and delivery of vaccines over the next two years.

No new taxes have been introduced to fund vaccines – funding will be provided through budget allocations, emergency withdrawals and – if needed – the contingency reserve.

Vaccines will be rolled out free of charge for the majority of South Africans, while private providers will be able to claim back from medical aid schemes.

Direct taxes

Government will not introduce hikes for personal income tax and corporate income taxpayers, in an effort to aid economic recovery and ease financial pressures on households and businesses.

The state had a revenue windfall in the latter part of 2020, brought about by increased corporate income tax receipts from mining companies coming off the back of improved commodity prices. Improvements in consumption and wages also bolstered revenue.

The tax revenue shortfall is now expected to stand at R213 billion, lower than the R312 billion projected during the Medium-term Budget Policy Statement tabled in October last year.

Government has also withdrawn a proposal to raise R40-billion in additional revenue over four years.

Hikes on indirect taxes

Government will levy an 8% increase on excise duties for alcohol and tobacco products in order to discourage their consumption and promote good public health.

Unemployment

Mboweni said despite government efforts to boost job creation and soften the blow for those who lost their jobs in the past year, the unemployment crisis in South Africa shows little sign of letting up.

Budget said R12.6 billion was allocated to various sectors to create about 694 000 short-term jobs in the 2020/21 financial year and that this programme is expected to continue in the 2021/22 financial year.

The Budget Review said the outlook remained uncertain and the economic effects of the pandemic would continue to be far-reaching. It paid R11 billion to the public employment initiative in 2021/22. By January 2021, the initiative had created 430 000 temporary jobs and aims to create another 180 000 by March.

Wages

Mboweni said savings in public service wages could be achieved through doing away with annual cost-of-living adjustment in the public service until 2023-24, reduced head counts, early retirement, natural attrition and the freezing or abolishing of non-critical posts.

At least two unions legally challenged the failure to honour the previous wage agreement and it is currently before the Constitutional Court, after the Labour Appeals Court dismissed an application for government to be compelled to honour that agreement.

“A three-year inflation-linked agreement would raise the total shortfall to R112.9 billion by 2023/24. And an agreement similar to the one achieved in 2018 – one percentage point higher than inflation – would create a compensation shortfall of R132.7 billion (or 2.2% of GDP) by 2023/24,” the review said.

According to the Budget Review spending programmes circular, the fastest-growing functions over the medium-term are economic development, community development and general public services, with spending on health amounting to R248.8 billion in the 2021-22 financial year.

The debt ditch beckons

The Budget Review said debt-service costs were higher than the 2020 Budget estimates by R3.6 billion in the 2020/21 financial year, R11.3 billion in the 2021/22 financial year and R17.9 billion in the 2022/23 financial year.

It expects debt-service costs to continue their increase at an annual average rate of 13.3%, reaching R338.6 billion in the 2023/24 financial year.

“Due to the higher budget deficit, coupled with fluctuations in interest, inflation and exchange rates, debt-service costs will continue to rise over the medium term,” the Budget Review said.

The Budget Review said gross national debt was projected to grow continuously over the long term, despite 2020 budget proposals to reduce expenditure growth. The review said strategies to contain debt would be monitored regularly by the minister.

Some SOEs face debt defaults

National Treasury highlighted that state-owned enterprises (SOEs) suffered a deterioration in their financial performance, partly owing to the impact of the Covid-19 pandemic and the associated lockdowns.

Many SOEs risk defaults, Treasury warned. Just last year, the Land Bank defaulted on its debt. Last year, the bank was allocated R3 billion in the 2020 special adjustments budget. The October Medium-term Budget Policy Statement also highlighted it would require R7 billion to support the restructuring of the entity.

Infrastructure

Mboweni says that the state has budgeted R791.2 billion for its infrastructure investment drive, without making a time table clear. “All these efforts to expand infrastructure will be wasted if the end user does not pay a cost-reflective tariff for usage,” he says.

Economy

Mboweni says SA’s economy is expected to rebound by 3.3% this year, following a 7.2% contraction in 2020. The finance minister says there is reason to hope from SA’s “much-improved economic outlook”. The global economy will be buoyed by the expected rollout of Covid-19 vaccines, he notes.

Source: MyBroadband

JSE-listed Imperial announced that it has acquired Parcelninja on 1 February 2021 in one of the largest e-commerce deals in South Africa.

Parcelninja was founded in 2013 by Justin Drennan, Ryan Drennan and Terence Murphy and it launched its first commercial services in October 2014.

It offers South African online shops an affordable outsourcing solution for all their fulfilment needs.

They integrate with most existing e-commerce engines and offer smart product warehousing, picking and packing, courier optimisation, and real-time reporting.

Parcelninja is therefore a logical fit for Imperial and helps the company to achieve its ambition of strengthening its digital offerings.

“This acquisition supports Imperial’s strategic ambitions to accelerate our digital capabilities and expand our logistics and market access services into last-mile distribution, e-commerce fulfilment, footprint and scale in Africa, while ensuring local relevance for our clients and principals,” Imperial said.

Uber South Africa faces class action lawsuit

By Khulekani Magubane for Fin24

Two law firms have announced that they will initiate an opt-out class action lawsuit on behalf of South African Uber drivers.
This comes after the UK Supreme Court ruled last week that Uber drivers should legally be classified as workers and get benefits.
The lawsuit could cover as many as 20 000 South African Uber drivers.

Two law firms announced on Tuesday that they would move ahead with plans to file a class action on behalf of South African Uber drivers against the ride hailing tech giant’s operations in South Africa as well as in London for drivers to be recognised as employees.

If successful, the legal bid will allow South African Uber drivers to pursue holiday pay and compensation for overtime under existing South African legislation. Currently, drivers in the Uber service operate similar to contractors.

The law firms – Mbuyisa Moleele Attorneys and Leigh Day – said in a joint statement on Tuesday that a decision by the UK Supreme Court on Friday affirmed that, in 2016, a group of Uber drivers should have been legally classified as workers and should qualify for similar benefits.

“Furthermore, Uber operates a similar system in South Africa, with drivers using an app, which the UK Supreme Court concluded resulted in drivers’ work being tightly defined and controlled by Uber,” the statement said.

Uber said in a blog post following the UK Supreme Court ruling that the judgment only focused on the group of drivers from 2016, and that they should have been classified as workers.

“The verdict does not focus on the other drivers on the app, nor does it relate to couriers who earn on Uber Eats,” Uber said.

“Worker is a UK-specific legal classification and a worker is not an employee.”

Zanele Mbuyisa of Mbuyisa Moleele Attorneys said Uber’s argument that it was just an app does not hold water when the company behaves like an employer and uses a business model which “exploits drivers”.

“We are issuing a call to workers to stand up for their rights and join the class action against Uber. Drivers should contact MBM Law … to fight for the rights to which they are legally entitled,” said Mbuyisa.

Richard Meeran of Leigh Day said: “The ruling by the UK Supreme Court is a final vindication for UK Uber drivers who have for too long been denied their statutory employment rights as workers. We hope that this class action in South Africa will enable South African Uber drivers to access those same rights”.

The statement said because Uber sets the amount of the fare, the information given to the driver about the passenger, ratings systems and can deactivate drivers who do not perform according to Uber’s standards, the dynamic between the company and drivers was similar to that of employers and employees.

The statement said up to 20 000 South Africa Uber drivers could be covered by the opt-out class action lawsuit.

 

Google Maps gets full-fledged dark mode on Android

Source: IOL

Google Maps is now getting a full-fledged dark mode on Android – a feature has been in testing since September 2020.

“These days, we are all experiencing a bit of screen fatigue. With the dark themes in Google Maps soon expanding to all Android users globally, you can give your eyes a much-needed break and save on battery life,” the company said in a statement on Tuesday.

Once your Google Maps has been updated, you can turn it on for your entire phone by heading to Settings > Theme and pick Always In Dark Theme.

The company also introduced some updates to Android Auto. In addition to custom wallpapers, Android Auto is now going to feature games as well.

For longer drives, you and your passengers can stay entertained with voice-activated games like trivia and “Jeopardy!”. Just say, “Hey Google, play a game” to get started.

Android Auto is also getting a split-screen feature that will put Maps side by side with media controls,

Google is also rolling out Password Checkup to Android to help alert you about potential leaks or data breaches that may have exposed your existing passwords to hackers.

Password Checkup will be rolling out to devices with Android 9 and above, and will automatically check passwords already saved in Android along with any new ones.

 

Source: MyBroadband

Vodacom has taken over all upgrades, credit vetting and collections for Cell C’s contract customers after they were moved to Vodacom’s network, an industry insider said.

Cell C started to migrate its contract and broadband subscribers to Vodacom’s network in mid-December, a process which was expected to last two months.

The decision took many people by surprise as Cell C is building a “virtual network” in partnership with MTN and has a national roaming agreement with the mobile operator in place.

It was widely speculated that Cell C sold its contract and broadband subscriber base to Vodacom in a deal which involved Comm Equipment Company (CEC).

CEC is a wholly owned subsidiary of Blue Label Telecoms which was founded in 2015 with a contract to supply and finance all devices supplied by Cell C to the market.

Blue Label Telecoms, which owns 45% of Cell C, recently said the business model of this financing arrangement indirectly exposes it to the credit risk of Cell C.

Blue Label Telecoms’ management, however, said it has effectively mitigated this risk through the operational model used and the “very high collateral requirements” which are in place.

As part of this agreement, Blue Label Telecoms and CEC have the right to sell Cell C’s contract customer base in the event of a default by Cell C.

Blue Label and CEC agreement with Cell-C

Considering Cell C’s dismal financial situation and the strange decision to move its contract customers Vodacom and not MTN, it is no surprise that many industry players thought a sale took place.

Cell C, Vodacom, and Blue Label Telecoms have, however, vehemently denied that any sale of subscribers took place.

Instead, Cell C said the migration of its customers to Vodacom forms part of its “network roaming model” which will see it become South Africa’s largest wholesale buyer of network capacity and infrastructure services from Vodacom and MTN.

While Cell C and Vodacom are trying to make the migration look like a simple roaming agreement, many industry players are disputing this.

One industry insider told MyBroadband Vodacom has taken over all upgrades, credit vetting, and collections for Cell C’s contract customers as part of the agreement.

This should not come as a surprise. TechFinancials reported in October 2020 that CEC planned to subcontract Vodacom to handle its credit vetting, call centre, billing, and collections for Cell C’s contract customers.

TechFinancials further reported that after the migration to Vodacom has been completed, Cell C customers will see Vodacom as their mobile provider.

MyBroadband can confirm that this is indeed the case. Instead of showing Cell C as their carrier name, contract subscribers are now shown Vodacom as their provider (see screenshot below).

Cell C contract subscriber home screen

With Vodacom reportedly taking over numerous services for Cell C’s contract subscribers and also serving all their network needs, these subscribers are now close to being Vodacom subscribers.

It is currently not clear if Cell C is still providing any services to its contract subscribers, or whether they are now essentially Vodacom subscribers, albeit unofficially.

MyBroadband asked Cell C for further information about its relationship with Vodacom, but the company would not provide any details.

Instead, it said “these commercial agreements, their existence and their terms are confidential between Cell C and the counter parties to the contract”.

Vodacom would also not answer any questions regarding its relationship, saying it is “contractually precluded from commenting on this”.

 

Spy pixels in e-mails have become endemic

By Leo Kelion for BBC

The use of “invisible” tracking tech in e-mails is now “endemic”, according to a messaging service that analysed its traffic at the BBC’s request.

Hey’s review indicated that two-thirds of emails sent to its users’ personal accounts contained a “spy pixel”, even after excluding for spam.

Its makers said that many of the largest brands used email pixels, with the exception of the “big tech” firms.

Defenders of the trackers say they are a commonplace marketing tactic.

And several of the companies involved noted their use of such tech was mentioned within their wider privacy policies.

Emails pixels can be used to log:

  • If and when an email is opened
  • How many times it is opened
  • What device or devices are involved
  • The user’s rough physical location, deduced from their internet protocol (IP) address – in some cases making it possible to see the street the recipient is on
  • This information can then be used to determine the impact of a specific email campaign, as well as to feed into more detailed customer profiles.

Hey’s co-founder David Heinemeier Hansson says they amount to a “grotesque invasion of privacy”.

Without special software, it is not easy to spot which emails contain a tracking pixel.
And other experts have also questioned whether companies are being as transparent as required under law about their use.

Invisible beacons
Tracking pixels are typically a .GIF or .PNG file that is as small as 1×1 pixels, which is inserted into the header, footer or body of an email.

Since they often show the colour of the content below, they can be impossible to spot with the naked eye even if you know where to look.

Recipients do not need to click on a link or do anything to activate them beyond open an email they are embedded in.

British Airways, TalkTalk, Vodafone, Sainsbury’s, Tesco, HSBC, Marks & Spencer, Asos and Unilever are among UK brands Hey detected to be using them.

But their use was much more widespread despite many members of the public being unaware of it, said Hansson.

“It’s not like there’s a flag saying ‘this email includes a spy pixel’ in most email software,” he added.

How the tech sector can uplift South Africa

By Riaz Moola, founder and CEO of HyperionDev

South Africa finds itself at a difficult moment. Unemployment has hit a record high of more than 30% according to the most recent government Quarterly Labour Force Survey. During 2020 alone, some 20million jobs were shed – and the effects of the national lockdown and its regulations continue to be felt by businesses, many of whom had to shutter shops or scale back operations to comply with restrictions to combat the spread of the virus.

However, the tech sector finds itself uniquely positioned to accelerate social change, rebuild the economy, boost education and health, and improve access to a better life with greater opportunities. Here are four ways that ICT businesses can play their part.

1. Provide innovative solutions to new problems

Part of technology’s contribution to our society is its capacity for invention and innovation. Established tech companies and start-ups both have an opportunity to help South Africa rethink the way its businesses, systems, and society works. A great example is how tech has helped brick-and-mortar businesses overcome the forced closures during lockdown.

Thanks to new communication technologies, online services, and digital transformation, thousands of businesses were able to revitalise their operations and increase their reach beyond the single street in their business district. Businesses have been able to reimagine themselves because of better access to tech that makes them more agile and less complex. One example of this is Yoco, a tech company that allows small businesses to process card payments without having to pay for costly bank swiping terminals or connect to complex systems.

2. Improve education and access to a better life

With a changing world comes ever-changing requirements. Part of South Africa’s troubles lie in the difficulty people experience in accessing a world-class education that prepares them for a fruitful and rewarding future. The need for better access to high-quality education in South Africa, where cost places it out of reach, is all too clear. According to StatsSA data from 2020, the number of South Africans aged between 15 – 24 years who were not in education, employment or training was recorded at 34.1%. Around 41.7% of all South Africans under the age of 35 (totalling 20.4 million people) are not currently in employment either. It’s alarming and worrying.

Tech companies can address this problem on two fronts: by improving the ease of access to education through digital and remote technologies, and by modernising educational curricula to include technical skills that today’s business landscape requires.

South Africa has already seen a wave of start-ups dedicated to democratising access to education. Organisations like the FunDza Literacy Trust push for more accessible reading and better education development. Start-ups like Snapplify create entire e-learning platforms for organisations, while coding skills bootcamps like ours at HyperionDev make access to key digital and developer skills simpler and more equitable.

Accessibility is at the heart of these movements. Enabling South Africans with low-bandwidth access to participate in affordable and high-quality educational resources from wherever they may be – provided they have a cellphone – is a big step in the right direction. The tech sector can greatly improve the South African outlook by making these initiatives accessible.

3. Champion sustainable growth and inclusion

Those operating in the tech sector are often the vanguards of progressive values, since their expertise lays the foundation for economic, social, and technological evolution of all other industries. This is why it’s important for us to be the pioneers of social change by holding and pursuing a set of core values and practices that further the public good.

This can be as simple as providing financial, technical, or organisational support to causes that aim to uplift others. Clothing company Patagonia famously donates 1% of its pre-tax income to charities and non-profit organisations that are committed to preserving and restoring the natural environment. But contributions don’t need to be financial, of course: using your tech company’s talents and expertise in partnerships that deliver social value are just as necessary. There are numerous collaborative efforts – such as the recent partnership between Vodacom and Microsoft to improve learners’ access to education – that will play their part in driving our country forward.

4. Promote impact investment

Impact investment is a relatively new concept which goes beyond the pure financial gains that traditional investment schemes focus on. Impact investments are capital and VC fund-raising initiatives that deliver positive social, economic, or environmental change.

To narrow the skills gap crisis and tackle unemployment in South Africa, HyperionDev has launched an impact investment campaign that allows members of the public to become equity stakeholders in the company as it expands into UK and US markets. Through these investment contributions, as much as R3.5 million in coding scholarships will be made available to get more people skilled for jobs in a 4IR economy in the company as it expands into UK and US markets. Through these investment contributions, as much as R3.5 million in coding scholarships will be made available to get more people skilled for jobs in a 4IR economy – delivering positive social impact every step of the way.

Through a combination of these and other initiatives, the tech sector could bring a definitive end to some of South Africa’s most pressing socio-economic woes.

Sustainable technology group Rubicon is bringing a Tesla Model X Performance Edition all-electric SUV into South Africa next week, according to an article by MyBroadband.

  • The aim is to raise the profile of renewable energy in South Africa
  • The vehicle will be used for marketing initiatives within the Rubicon Group to promote Tesla Powerwall and officially launch Rubicon’s entry into the electric vehicle charging space in South Africa
  • This initiative does not signal the arrival of Tesla vehicles in South Africa
  • Rubicon aims to highlight all forms of electric mobility, and accelerate the South African vehicle industry and lobby government towards an all-electric future
  • South Africans will be able to see up close what the car looks like
  • The vehicle will move between major city centres over the next few months in conjunction with a number of marketing events for Tesla Powerwall and electric vehicle chargers from EVBox, Delta, and EO Charging

 

 

 

Source: Jacaranda FM

The Hawks in Gauteng have arrested a second person in connection with a Cell C tender scam worth an estimated R130-million.

Gauteng Hawks spokesperson Ndivhuwo Mulamu says 39-year-old Adriraan Pillay was arrested in Germiston on Friday.

“It is alleged that Pillay and his co-accused, Ismail Adanjee Mohamed, 44-years-old, were both Information Technology (IT) executives at one of the well-known South African mobile network service providers.

“They allegedly colluded with a director of a contracted entity responsible for IT and network service provider, falsely inflated invoices which resulted in an actual loss of over R130 million from 2012 to 2019,” she said.

Adamjee was released on R50 000 bail by the Johannesburg Specialised Crimes Court last month.

Pillay appeared in the Palm Ridge Specialised Commercial Crime Court on Monday where he was also granted R50 000 bail.

Mulamu said the case is postponed to 14 April 2021 where he will be joining his co-accused, Mohamed.

 

By Malibongwe Dayimani for News24

More than 120 students at Walter Sisulu University in the Eastern Cape could not finish their studies in 2020 after the institution wrongfully deregistered them due to a computer glitch.

The mess happened when the multi-campus institution was deregistering students who were academically excluded for underperforming.

To undo the bungle, the university said on Tuesday it would invite all affected students and subject them to online catch-up lectures to meet the minimum lecture attendance time to sit for exams.

The SA Student Congress (Sasco) has called the incident academic sabotage.

Based on the bungle, students were unlawfully evicted from their residences and subsequently became homeless in the streets of East London, said Sasco branch convener Ondela Tywakadi.

Sasco, which is the largest student political structure at the university, said it was in utter shock at how the institution had handled the matter.

The student body accused it of having disregard for students’ academic lives and overall well-being.

“We as Sasco have been at the forefront of this struggle and thus we demand a public apology from WSU to the affected students who were illegally deregistered in the dead of night and denied any knowledge of it.

“We furthermore demand that the university must devise means for the affected students to finish the 2020 academic year. Taking into account that these affected students were barred from writing first semester exams as well as registering for the second semester.

“[And also] taking into account that some could not submit basic assignments. All of these factors lead us to the basic conclusion that WSU sabotaged the potential academic excellence of students. We are calling for an enquiry as to what happened and heads must roll,” said Tywakadi in a statement.

Sasco is also calling for the suspension of the registrar, Khaya Maphinda.

On Tuesday, university spokesperson Yonela Tukwayo said most of the deregistered students continued to attend online classes as most were up-to-date with their studies and therefore qualified to sit for exams.

“Those who did not continue, lecturers will be requested to draw catch up plans in order for them to meet the minimum teaching time and write their final exams,” she added.

“WSU confirms that several students were academically excluded and thus deregistered during the 2020 academic year, which is an acceptable practice in higher education institutions.

“WSU student records reflect that all deregistered students were duly informed of their deregistration. Unfortunately, some students were erroneously academically excluded in the process,” Tukwayo said.

The university added it was also aware some student financial records continued to reflect amounts due despite deregistration.

Tukwayo said this had resulted from a system backlog caused by delays ensuing from the Covid-19 national lockdown.

She added the student fees system debited student fees on an annual as opposed to a monthly basis, and the lockdown had slowed the process of crediting deregistered students accordingly.

“WSU has been actively assisting students on a case-by-case basis to rectify the situation, as each case is unique. However, our efforts have been hampered by the continued uncertainty caused by the various levels of national lockdowns necessitated by the Covid-19 pandemic, and hence the delay.”

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