So, what happens once the ANC has milked the money cow dry? Will they sell their posh cars and houses? Will they build factories and create industries to employ the poor people of South Africa? Will they get tough on corruption and stop giving out tenders to their brothers and sisters who charge 10 times the going rate?
Tonight eNews reported that the Tswane government paid R368 000 for 16m of VibaCrete walls somewhere in the Pretoria CBD. That comes to about R23 000 per running meter. I fixed my friend's wall a few years ago for about R2000 when a tree fell on it. It was about 5 running meters. That comes to R400 per running meter. And I still made a profit.
I never liked Eugene Terreblanche, but I watched his last interview. He said something which has been stuck in my mind ever since. He said, in Afrikaans: "Jy kan kan 'n koei DOOD melk..." (You can milk a cow dead...)
Jacob Zuma told his delegation today that the economy is still in the hands of white men. Damn right it is. If I got a company to quote for a small job worth R10 000 and I got a quote for R368 000, I probably wouldn't employ that guy. But if you're using somebody else's tax money...
The ANC is now moving in for the kill... They will be discussing ways to force pension funds to invest a certain portion of their portfolios in state-run development institutions.
Basically, the people who have been investing month after month for years at Old Mutual or Sanlam will be paying for their infrastructure development scams. Now that squandering our tax money is becoming too easy, they want to get in on the investment action too...
Be warned fellow South Africans - we're heading towards becoming just another African tragedy.
I translated another article that was published on sake24.com today.
Leave our pensions alone...
Various private sector organizations in South Africa have criticized the ANC’s plans to force pension funds to invest in state development projects even before the proposal has been dicussed.
The ANC was quiet about the issue for a long time, but the ruling party will be discussing the proposal again this week in Midrand. The issue should be finalised at the ANC’s election conference in December.
The ANC’s idea is to force pension funds to invest a certain portion of their portfolios in “development”, but they’ve received a wave of criticism.
The minister of economic development, Ebrahim Patel, recently stated that it would be beneficial for pension funds to invest more in state development, because it would stimulate economic growth.
The question remains whether development projects are profitable enough and whether the risks would be justified.
Role players in the financial industry are of the opinion that the government can’t do what they please with funds that are invested by the sector on behalf of clients.
Leon Campher, CEO of the association for savings and investment SA (ASISA), says that the estimated R3200 billion the government is planning to spend on infrastructure development could possibly be partially funded by savings, but that other savings channels should be created for that purpose.
Investment in development projects will only happen if the environment and returns on investment are attractive enough.
Adri Messerschmidt, Senior Policy Advisor of ASISA, says that the government is attempting to break down open doors with forced investments in state institutions and development agencies.
“The need for investment in infrastructure is huge, but the government needs to create an environment where it would be possible and lay down clear regulations to show investors why it would be beneficial.”
The financing of infrastructure and development institutions is a sensitive subject in many other countries according to Messerschmidt. Less than 1% of pension fund assets are invested in development institutions worldwide.
Sanlam economist, Jac Laubscher, says that there is no reason why people who have savings should subsidise the government. By forcing financial institutions to invest in infrastructure development, the government will be transforming them into “development institutions”, which isn’t why they are there.
Prescribed investments for pension funds in infrastructure and development institutions would not increase capital in the economy, Laubsher says. It would just decrease profits on savings and increase opportunity costs on investments.
He says that the government should stick to their mandate and leave the private sector to do its job. “The government is responsible for the development of the country through its policies, while the private sector needs to implement government’s policies due to the state’s incompetence.”
Ismail Momoniat, head of taxation and financial sector policies of the National Treasurer, stated at the annual congress of ASISA last week that government should rather concentrate on the underlying issues that are causing problems.
“Unless projects are profitable, financial institutions simply won’t invest and one cannot expect them to invest pension money in speculative projects.”
Andrew Canter, head of investments at Futuregrowth, says that government does not need money from financial institutions to fund infrastructure development.
He says that the R3200 billion that is needed to invest in infrastructure in the next ten years according to the government is only an estimation and that 78% of the amount represents spending on electricity and transport.