Tag: fees

South Africans are paying more for private healthcare than ever before. But forking over more cash for more — and often unnecessary — care, isn’t paying off for consumers, a five-year investigation by the Competition Commission shows.

The Competition Commission today released the final report on its health market inquiry in Johannesburg. The 256-page document is the outcome of half a decade of research by the body, which included public hearings, written submissions and meetings with key players in the private health industry. The report is also the most detailed picture of private healthcare in the country’s history, revealing new details on everything from ownership and profit patterns to how health facilities contract doctors.

The report echoes the inquiry’s previous 2018 findings that a lack of competition in the private healthcare industry is fuelling increasingly unaffordable healthcare costs. It’s also incentivising doctors and private health facilities to over-treat patients, sending them to hospital more frequently and for longer without any real medical benefit. This is particularly true in areas like Gauteng and the Western Cape where there are more hospitals and doctors.

And with power concentrated in the hands of just a few major hospital groups, there is little motivation for hospitals and doctors to try to bring down costs and hardly any room for transformation.

Former Health Minister Aaron Motsoaledi pushed for the inquiry ahead of its 2013 launch. Motsoaledi wanted to understand just why private healthcare was so expensive before the government began buying services from the sector under the National Health Insurance (NHI).

The Commission’s final recommendations have — in many ways — already begun shaping the country’s NHI transition.

Three hospital groups have 90% of the market

South Africa’s population has grown by almost three-million in the last decade, but the number of public hospital beds in the country has barely budged, the Commission found.

In the private sector, the number of hospital beds, however, has nearly doubled.

According to Statistics South Africa, fewer than 1 in 5 South Africans were members of medical aids in 2018.

Just three hospital groups — Netcare, LifeHealthcare and Mediclinic — account for 90% of the private hospital market, based on 2016 hospital bed numbers. Independently-owned facilities make up the remaining 10% of the market.

The high concentration of power in this sector, the Commission notes, makes it vulnerable to collusion, both formally through the creation of cartels and informally. This is because — in theory — it would be easy for a small number of players to engage in price fixing, setting the tone for the market.

Without much competition, the three major hospital groups “all but dictate year-on-year price and cost increases” for medical aids and administrators while reaping the benefits of over-treatment at their facilities.

The Competition Commission’s report attributes overtreatment to two factors: Monetary incentives for doctors and facilities to admit more patients and a phenomenon called supplier-induced demand. The concept is premised on the more supply you have of beds, doctors, medicine, the more people use them regardless of whether they need them or not.

In its 2018 report, the Commission analysed hospital claims and found that almost a third of claims costs couldn’t be explained by factors such as a patient’s age or disease. These mysterious charges were being passed onto consumers in the form of increased premiums, the Commission argued.

But hospital groups say that doctors also play a role in over-prescribing care. The Competition Commission inquiry, however, maintains that health facilities and doctors play complementary roles in the phenomena — something for which the body found evidence for when reviewing contracts between the two that encourage doctors to admit more patients.

The costs of this pricey hospital care are passed largely onto medical aids — and consumers, the Commission found.

The Competition Commission writes: “[Large hospital groups] facilitate and benefit from excessive utilisation of healthcare services, without the need to contain costs, and they continue to invest in new capacity beyond justifiable clinical need without being disciplined by competitive forces.”

And with great market power, the ability to set your own prices is almost a given.

“Hospital groups have the market power to threaten that the national price for all their hospitals would have to increase,” the report quotes Discovery Health as testifying, “if there was a threat that a hospital in their group might be excluded from a local network [of preferred providers].”

The Commission’s report also found that Netcare, LifeHealthcare and Mediclinic has unfair advantages that keeps them in the lead and prevents transformation in the sector, because the practises make it hard for new players to enter. For instance, the three were able to cross-subsidise facilities across their vast networks, meaning they were able to use profits from well-performing hospitals to make up for poorer earning ones. And, the Commission says, the “big three” were able to lure the best doctors to their wards with lucrative benefits smaller hospitals just can’t afford.

The Competition Commission was able to gain access to some contracts between specialists and health facilities, although the report does not reveal which facilities or doctors the agreements refer to. In some instances, the Commission found that specialists who agreed to admit their patients into certain private health facilities over others were offered preferential financing in terms of loan servicing rates and repayment rates to buy shares from larger hospital groups.

The report recommends that the Health Professions Council of South Africa investigates this practice.

The Commission also unearthed evidence that some private health facilities encourage doctors to admit higher volumes of patients, “making full or maximum use of the facilities” or ensure that they “treat a minimum proportion” of their patients in the facility. This includes setting targets for admissions and penalising specialists who contract with them if they didn’t meet these goals.

Meanwhile, hospital admissions rates have skyrocketed in the last 10 years among those with medical aid — the Competition Commission found this increase could not be attributed to the overall health of the population.

Black entrepreneurs may get licenses to open new hospitals, but can’t get the cash

Major hospital groups are pushing back against the contention that they have a firm hold on the market, in part arguing that many new hospital licenses have been granted to smaller entities.

The Commission has fired back, saying that although some would-be hospital owners — particularly black, coloured or Indian entrepreneurs — are able to secure licenses, they struggle to get financial backing. Those who can’t get this kind of capital are forced to sell their licenses to bigger hospital groups.

Commission proposes mandatory basic benefit for all medical scheme members

Why did the private healthcare sector get so out of whack? Well, it’s in part because major sections of the National Health Act, that allow the national health department to regulate the private healthcare sector, were never enforced, the Competition Commission says.

The national health department did manage to introduce a list of 270 largely hospital-based conditions and treatments — called prescribed minimum benefits — in 1998 that medical aids must legally cover. But the list is woefully out of date.

Work to redefine prescribed minimum benefits is already underway. In line with the inquiry’s previous recommendations, the health department is hoping to make it more comprehensive and allow it to cover day-to-day needs like contraception.

The Council for Medical Schemes is also busy designing a standard medical aid package that will one day be offered by all schemes, something the Commission proposed in its 2018 report. The offering will have to spell out exactly what it does and doesn’t cover and the Council for Medical Schemes will review it every two years.

With each of the country’s medical aids offering the same standard package, consumers will be better able to compare value for money between medical schemes. Medical schemes, in turn, will have to work harder to make care better and more affordable to woo new clients.

But today’s report adds a new twist: The Commission has proposed this standard package be mandatory for all medical aid members. Those who want expanded cover will then “top up” by buying additional cover. Gap cover, the body says, will become a thing of the past.

Does this sound familiar? This is a similar structure to what the NHI proposes: One mandatory basic package of care provided by the state with medical aids selling additional cover.

The Commission has also put forward sweeping changes to improve, for instance, the issuing of hospital licenses, the monitoring of possibly anti-competitive mergers and centralising health data from both private and public facilities to improve accountability. None of these, it cautions, should be implemented as standalone measures. Perhaps one of the investigation’s most important recommendations is the creation of a body that will one day reduce supplier-induced demand, or the private healthcare system’s tendency to provide more care in areas with d higher numbers of doctors and facilities.

The proposed independent “supply-side healthcare regulatory authority” would be independently funded by the government. The body would take over what are currently opaque provincial processes for issuing new licenses for healthcare facilities. It will also handle the issuing of practice numbers in consultation with the Office of Health Standards Compliance to help facilitate the contracting and payment of healthcare providers under the NHI.

The new authority would coordinate a forum to decide the price of services under the NHI. This may be a tall order when historic distrust remains between members of the public and private health sectors and when private healthcare members, the Commission notes, are loath to even discuss billing codes for fear of divulging sensitive information.

The United Kingdom’s National Health Services has a similar regulator.

“All healthcare purchasers, including the NHI, will require providers to be properly regulated in order to achieve affordable access to quality care,” the Commission warns. “Any single buyer system, like the NHI Fund, on its own, that is without complementary supply-side regulation, cannot succeed.”

Ministers at war over e-tolls

Minister of Finance Tito Mboweni took to Twitter on Thursday to oppose Gauteng premier David Makhura’s views that the e-toll system should be scrapped.

David Makhura said in a speech that “our position has not changed. We remain determined that e-tolls are not part of the future of our province.” He went as far as saying that the provincial government was prepared to pay some of the money owed by motorists to ensure the tolling system was scrapped.

Mboweni fired off a series of tweets saying that there should have been a plan at the introduction of e-tolls to ensure the system worked and yielded returns in the long term.

Mboweni incited public ire when he tweeted “I don’t know why the middle and upper classes in Gauteng want to complicate our lives. The working class do not pay e-tolls!! Public transport! Hello…”. Motorists and public transport users disagreed with the sentiment.

Transport Minister Fikile Mbalula waded in, saying President Cyril Ramaphosa instructed that a meeting be held to discuss a way forward, rather than debating the matter over Twitter.

By TJ Strydom for Business Live

Motorists will this week get their steepest increase at the pump in four years as the recent slide in the rand and higher global
oil prices are passed on and a hike in government levies takes effect.

The retail price for 95 octane petrol is set to rise R1.31 per litre inland on Wednesday and R1.26 on the coast, the Central Energy Fund (CEF) said on Saturday. Diesel prices will rise about 82c.

The increases will pile pressure on consumers who are reeling from a value-added tax increase in 2018 and face
another bout of electricity price hikes. Prices rise 14% for direct Eskom customers on Monday and for a similar amount for municipal customers on July 1.

Fuel price hikes usually have a second-round effect as wholesalers, retailers and other service providers gradually pass the increases on to their customers. And the hikes are notoriously “sticky” when it comes to inflation — taxi fares that rise when fuel becomes more expensive do not necessarily fall when prices at the pump
go down.

Petrol at R16.13 per litre is still cheaper than it was as recently as December, but the increase is the harshest since April 2015, according to data from the Automobile Association.

With weak economic growth and the turmoil at the SA Revenue Service contributing to an expected revenue shortfall of more than R42bn and personal and company taxes at their
limit, the Treasury has shifted increasingly to other avenues for taxation. Government-imposed levy adjustments account for 20c per litre of this week’s increases, with 15c going to the fuel levy and 5c to the Road Accident Fund. These increases were announced by finance minister Tito Mboweni in his budget in February. Roughly a third of the amount motorists are charged go to these coffers.

“With effect from 3 April 2019, the fuel levy in the price structure of petrol and diesel will amount to 352c per litre and 337c per litre respectively. The Road Accident Fund levy in the price structure of both petrol and diesel will amount to 198c per litre with effect from 03 April 2019,” the CEF said.

The fund said the weaker rand, which on average depreciated from R13.80 in the previous month to R14.39 in the latest month, and higher global oil prices were responsible for the rest of the hike. When the Bank announced its interest rate decision last week, the size of the increase was already easy to forecast using CEF data.

Though consumer price inflation is comfortably within the Bank’s target, it flagged global oil prices and the effect it will have on domestic fuel costs as one of the upside risks to its inflation outlook when it left the repo rate unchanged at 6.75%.

Fuel prices, along with higher food and electricity costs, were expected to lift inflation over the medium term, Bank governor Lesetja Kganyago said.

Review of fuel levy ‘is possible’

By Bekezela Phakathi for Business Day

The possibility of reviewing the fuel levies downwards to ease the financial burden on motorists and consumers has not been ruled out, says President Cyril Ramaphosa.

“The fuel levy is part of fiscal architecture we have in our country … we have said we want to look at that … the fuel levy is precisely one of those we are looking at,” Ramaphosa said in parliament on Wednesday

“We are sensitive to the burden imposed on our people.”

The price of fuel recently went up to more than R16 a litre in inland provinces. The hikes are expected to have a ripple effect on the economy.

The price of a litre of petrol in SA has more than doubled in 10 years, while the levies increased from about R1.30 in 2008 to the current R5.30.

The fuel levy contributes close to R63bn annually to the fiscus. The Road Accident Fund levy accounts for R1.93 of the fuel price. Taxis and other public transport operators have already upped their fares in response to the increases.

Ramaphosa said any decision would have to weigh the advantages of reducing the fuel levy against the loss of revenue for the state, which will have an effect “on a whole lot of things”.

“It’s not as easy as snapping a finger and coming up with an answer … it’s one of those issues we continue to look at and seek solutions for.… We import a commodity we have no control of in terms of prices,” said Ramaphosa, during a question-and-answer session.

DA leader Mmusi Maimane had asked Ramaphosa whether there was a plan to reduce the fuel levy, which he called a “corruption tax”. “The RAF [Road Accident Fund] is declaring losses and money is being wasted. Is there a plan to reduce the fuel levy?” he asked.

Department of energy officials told parliament on Tuesday that any adjustment to the fuel levy could only take place in the next financial year.

The government has said before there is nothing much it can do to stem the fuel increases since the country imports the bulk of its requirements. The change in the price of petrol is typically a function of both changes in international exchange rates, particularly the US dollar-rand exchange rate, and the change in international crude oil prices.

Ramaphosa also answered questions on the unemployment crisis and the burning issue of land expropriation without compensation.

“Since 2009 I have heard about plans and summits, yet millions of South Africans are still unemployed,” said Maimane. “The definition of insanity is doing the same thing and expecting a different outcome or keeping the same people [in the cabinet] and expecting a different outcome.… Can we bring change so we can expect a different economic trajectory?”

Ramaphosa said the cabinet would soon announce details to stimulate economic growth, including finalising the Mining Charter and allocation of broadband spectrum.

“We want to unlock the levers that hold the economy back,” said Ramaphosa.

The president hit back at Maimane, saying: “I’ve not heard anything wise that you’ve said.… You are playing the people or the man, not the substantive issues that have to do with economic growth.”

Without land redistribution there would be no stability in the country, Ramaphosa said.

“Transformation means we must have redistribution of land because there was an injustice committed many years ago.… If you do not want stability then do not transform … but if you want stability then you must transform.… We will make sure that our country succeeds. Even the landowners must embrace this process,” he said.

By Georgina Crouth for IOL 

Stellenbosch Law Clinic filed an application in the Western Cape High Court, seeking judicial intervention on the manner in which debt is collected. It believes debt collection needs to be regulated and that costs must be capped.

The clinic is joined by Summit Financial Partners in representing 10 of their clients. All the major role players in the credit industry are involved, with 49 respondents, including all the major banks, the lending institutions, the ministers of Justice and Trade and Industry, and the National Credit Regulator.

Stephan van der Merwe, senior attorney at the university’s Law Clinic, says there’s widespread abuse in the industry.

“We have a lot of situations where people have been garnished with emolument attachment orders against their salaries. When you sit down and look at it you find amounts in excess of five, six, seven times the principal debt and they’re expected to continue making payments on it,” he says.

In one case, a client was granted an initial loan of R600, but had paid back more than R5 000 – about eight times the initial loan amount. In another, a farm labourer, earning R2000 a month, has R970 garnished from his monthly salary. Back in 2011, he was given a loan of R16 000 and has repaid in excess of R31 500 – yet the creditor alleges he owes R37 000.

Van der Merwe says the reason they get away with it is because there are no rules that the costs levied against the debtor are taxed.

“What you have is the creditors going to their attorneys or their collection agents and telling them to collect on the debt but the charges are borne by the debtor.

“This is why the debtors end up paying these astronomical amounts for small loans, because the attorney and collection agency fees are dumped on them.”

The common law in duplum rule says that interest cannot accrue to more than the capital amount. Since 2007, when the National Credit Act (NCA) came into effect, the statutory in duplum rule has been interpreted by institutions in a myriad ways.

“This is why we are going to court: to request a declaratory order that the statutory in duplum is applicable to all the interest, the costs, including the legal fees that are levied against the debtor – irrespective of whether a judgment has been granted.”

Van der Merwe says on a proper interpretation of the relevant sections of the NCA, it would mean that if the debtor is in default under the credit agreement these amounts may not exceed the unpaid balance of the principal debt at the time of default.

“When a consumer is in default all the combined interest, the collection costs and so on cease to run when they reach the unpaid balance of the principal debt.”

“The problem is creditors say legal costs don’t form part of it, or that this isn’t applicable after judgment.”

In addition to the two declaratory orders, asking for clarity on how sections 101 and 103 of the NCA are interpreted, the clinic is also asking that the court declare that legal fees may not be recovered from the debtor unless they have been taxed.

“Nowhere in the National Credit Act is a distinction drawn between legal fees and collection costs.

“What we’re saying is that creditors want to use expensive attorneys to collect on miniscule debts; debtors can’t be expected to pay those fees.

“We shouldn’t allow debtors to be abused in this way – we need to the court to make a ruling.”

Once the court has clarified allowable collection costs, the clinic wants it to order that an independent expert recalculate the applicants’ indebtedness and then order that if there is an overpayment, the money must be repaid to the debtors.

But before consumers get excited about having collection fees and interest repaid, Van der Merwe says prescription might be at play. “You might have trouble in court claiming that money back because prescription would have to be taken into consideration.

“There will be clarity: everyone will know what is expected and people won’t be abused financially as a result of uncertain legal interpretation.”

Van der Merwe says they are not attempting to vilify small cash loan providers, the credit industry or attorneys in general: “We applaud those creditors who are honest, give loans responsibly and collect responsibly: they play an important part in our economy.

“We are not tackling the industry in general – we have an issue with unscrupulous guys who don’t play by the rules. We are not going to assist so called ‘professional debtors’ either, who abuse the system by getting loan after loan at creditors’ expense if there are no merits in their cases.

“We have a problem with creditors who abuse low-income earners by coaxing them into enticing loans which they would never be able to service based on their limited wages.”

In 2016, the law clinic won a landmark case in the Constitutional Court, which found that several practices relating to the abuse of emolument attachment orders were unconstitutional.

“The court also considered the validity of the initial loan agreements which regularly included interest of 60% annually and they were concluded absent of any, or alterna- tively after severely defective, affordability assessments. Those transactions were conducted in breach of section 81 of the NCA which talks about reckless credit.

“Those specific creditors want to extend reckless credit to consumers, who they know won’t be able to repay the loans, and then they abuse the situation by putting debtors into a debt trap that they’ll never be able to get out of.

“People like that shouldn’t be able to shirk responsibility in their collection when they use illegal practices. They cause economic catastrophe in the lives of those clients.”

Van der Merwe says that after the Marikana massacre of August 16, 2012, clear linkages were drawn between the demands for higher wages and the abuses in the credit industry.

“Those workers demanded more money to allow them and their families to make a living because their salaries were severely garnished by credit providers that were instituting emolument attachment orders that were illegal and unconstitutional.

“We are trying to avoid those situations arising in the future, by asking the court to assist us in fostering a healthy and responsible credit environment.”

Petrol price triples in a decade

By James de Villiers for Business Insider SA 

The price of a litre of petrol in South Africa increased from R6.92 in July 2008 to R15.53 in July 2018 at the coast, and from R7.16 to R16.02 inland – nearly tripling in the last decade.


Infographic: Fin24

Over the same period, the tax (or fuel levy) on a litre of petrol increased from a low of R1.27 in July 2008 to R3.37 in July 2018.

This means the tax on fuel increased by 165.35% in 10 years.

On Sunday, the department of energy announced that a litre of unleaded petrol will increase by 26c, pushing the price of a litre past R16 in the inland for the first time.

Energy Minister Jeff Radebe ascribed the increasing petrol price to the rand’s poor performance to the US dollar.

Radebe said the increase would have been 20c more if it wasn’t for declining oil prices.

By Scott Duke Kominers for Bloomberg 

How much is your privacy on Facebook worth?

This question has seen renewed attention following the revelation that political analysis firm Cambridge Analytica, hired by the Trump election campaign, gained access to the private information of more than 50 million users. One of the possible responses that’s generated some discussion is the creation of a paid tier that’s free of ads and data sharing. 1 Such an option would likely be socially beneficial and have considerable public appeal. But my guess is that it would be pretty expensive, too.

Let’s start with some rough calculations. Facebook’s annual ad revenue was about $40 billion in 2017, with 2.13 billion monthly active users. That means the average user is worth roughly $20 in ads to Facebook a year. That’s probably already a lot more than many users would pay for privacy on the social network.

But the price also depends on who would choose to pay for greater privacy. And it’s likely that many of the users who would opt for more protection could be worth more than $20 each to the company.

Why’s that? First, the value of keeping your data private increases with the amount of data you provide on the platform; by the same token, the more data you give Facebook, the better it can advertise to you. Similarly, you might find privacy especially valuable if there’s something unusual or unique about you that makes you especially easy to target.

The people who can afford a paid tier are on average wealthier; that too makes them more valuable to advertisers. And some of them already have browser ad blockers, so it’s hard to reach them via other channels.

To make up for those sorts of customers opting out of data sharing, Facebook would have to charge a lot more than the average of $20 just to break even. A back-of-the-envelope estimate based on the Pareto principle — 80 percent of the ad revenue coming from 20 percent of users — suggests that if mostly high-value users purchase privacy, then Facebook would need to charge closer to $80 a year.

That’s much more than even high estimates of the value most people attach to having access to Facebook. And it’s still a substantial underestimate of the likely price. According to Facebook’s annual report, the company’s 239 million North American users are responsible for a bit less than half of ad revenue; applying the Pareto principle to them would suggest annual privacy prices in the range of $325 a person.

If price alone were the question, Facebook might indeed want to charge huge amounts for enhanced privacy. The users who buy out won’t all be the most valuable users, and it would be pretty lucrative if the company could sustainably charge some customers much more for privacy than the annual ad revenue they generate. But that’s unlikely to work out in the long run.

Putting a high price on privacy would make it clear just how much Facebook’s user data is worth. We’d probably see increased calls to share that value by giving users a portion of revenues. The consumer-led drive for increased privacy would likely accelerate, too, prompting a growing number of users to leave the platform (assuming they can’t afford or are unwilling to pay for greater privacy).

A user exodus plus enhanced scrutiny of data practices would quickly eat away at the profits from offering the paid tier, making the whole thing a losing proposition.

Facebook must have run the numbers on this already, using much better information than we have here. The idea of a paid tier isn’t new; if Facebook hasn’t offered such an option, the company probably thinks it would be a money-loser. So if we want Facebook users to have control over how their data is shared, we may need outside pressure. The company isn’t likely to provide the option on its own.

It’s also worth noting that advertising and data sharing don’t have to be completely coupled. Facebook could enhance privacy directly by adopting data protection strategies based on privacy science, as Apple, Google, and the Census have in some of their applications.

The National Credit Regulator (NCR) will investigate Standard Bank’s new credit card fee, according to a report in the Sunday Times.

The bank has been charging a standalone monthly “card fee” of between R10 and R210 to customers who use its credit cards only, with the fee depending on the type of card the customer uses.

The card fee was implemented at the beginning of 2018 and is charged in addition to the monthly service fee of R40.

According to the NCR, the Credit Act has a closed list of charges a credit provider can levy on customers – and the card fee is not one of them.

The NCR said it would investigate Standard Bank’s card fee and take approporiate action if the fee is found to be illegal.

According to Standard Bank’s pricing guide for 2018, the card fees are as follows:

Gold, Blue, and Access cards – R10.00
Titanium standalone – R25.00
Platinum standalone – R40.00
World Citizen standalone – R210.00

The report follows SA Consumer Satisfaction Index results in 2017 showing that Standard Bank customers are the least satisfied.

Standard Bank did not respond to requests for comment sent by the Sunday Times.

Source: MyBroadband

Finance Minister Malusi Gigaba said on Tuesday that power utility Eskom’s application for a 19.9% electricity tariff hike next year is “unjustified”.

Gigaba was addressing a business breakfast in Umhlanga, north of Durban, organised by the Durban Chamber of Commerce and Industry.

“To ask South Africans to pay more … when the economy is subdued and the mid-term outlook is as subdued as it is and we have the types of financial and leadership challenges that Eskom is now experiencing, I think that will serve as a perverse incentive,” he said. “We’ve got to be careful what we do.”

Eskom has asked National Energy Regulator (Nersa) to allow it to implement a 19.9% tariff hike for the 2018/19 year. Nersa is currently conducting public hearings into the feasibility of the increase.

Gigaba also called on the power utility to stabilise its finances, saying that public officials needed to be “circumspect” about how they manage public resources.

“All public officials needed to be conscious of the need to fight corruption, irregularities and inefficiencies to ensure that state-owned companies perform well,” said Gigaba.

“That’s why I think that the Eskom application for a higher tariff is unjustified, given the fact that on the other hand we have excess electricity.”

The finance minister told the business breakfast that Eskom must “incentivise” South Africans by improving its governance and employing what he termed “properly qualified executive leaders from CFOs (chief financial officers) to CEOs (chief executive officers) and all other executive directors”.

Mini budget

Gigaba criticised those who said his mid-term budget painted a bleak picture of SA’s economy and failed to boost confidence.

He delivered his maiden mini budget to Parliament in Cape Town last Wednesday.

The minister told the business breakfast that he had to present facts about the state of SA’s economy as they stand. “We gave an honest view of the challenges facing our country. We couldn’t go and spin ourselves to the country knowing all is not well. We couldn’t just go to Parliament and stand before the nation and lie.

“All the things that we said in terms of the country’s economic outlook for the medium-term budget were facts, as they stood before us, when we presented the statement,” he said.

“No minister of finance, worth their soul, would have presented anything different; they would have stated the facts as they are.”

Pay your taxes

Gigaba said everyone needs to pay their taxes, given that SA faces a R50.8-billion tax revenue shortfall.

And with National Treasury expecting GDP growth of only 0.7% this year, Gigaba said that “little social and economic transformation” could be expected without stronger economic growth.

He urged the private sector to join hands with government to boost the economy.

“Economic growth and transformation must become neutrally reinforcing principles. Government is doing its share and will continue doing so,” he said, mirroring what he said in his budget address.

“The private sector must bring something to the table, it must be a give and give situation,” he said.

Speaking of the state’s mounting debt, the finance minister said government doesn’t want to leave future SA generations facing a debt hole they won’t be able to manage.

“We need to give them a growing economy with less debt so that they could begin developing wealth for themselves and grow [the] economy of those who will come after them,” he said.

By Mxolisi Mngadi for Fin24

Vodacom bows to pressure to reduce prices

Vodacom will actively participate in the Independent Communications Authority of South Africa’s (Icasa) consultation process on the draft regulations regarding data expiry periods and out-of-bundle billing.

Vodacom told Fin24 that it was committed to the process of drafting new regulations, after the communications regulator stepped into the going feud between consumers and networks over the high cost of data.

“Vodacom is aware of the draft regulation gazetted by Icasa regarding data expiry periods and out-of-bundle billing,” a company spokesperson told Fin24 this week.

“Vodacom is committed to bringing down data prices and has brought down effective data pricing by 44% over the last three years.

“Through the likes of Just4You, which offers customers hourly, daily, weekly and monthly bundles, Vodacom has made significant inroads in recent years in its pricing transformation journey,” the spokesperson said.

The latest step by Icasa to join the #DataMustFall campaign was aimed at regulating data expiry dates, according to a notice published in the Government Gazette on Monday.

Icasa intends to encourage networks to extend the validity of data bundles.

“With regard to out-of-bundle billing, Vodacom reiterates its position on this matter in that it remains fully committed to addressing these and has already started to implement its plans,” Vodacom told Fin24.

“We remain committed to consulting with the regulator in our shared quest to continuously address customer needs and improve the customer experience,” the company added.

The public has until September 19 to submit comment.

Prior to the recommendation, the regulator announced it would hold an inquiry to try reduce high data costs. This inquiry will be conducted over four phases and completed in March 2018.

These phases include a market study, discussion document, public hearings, and findings document. Members of the public would have 45 days to submit comments following each phase, News24 reported.

By Kyle Venktess for Fin24

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