Industry voices opposition to new turn in land expropriation debate

ANC proposal to reduce the power of the courts described as a ‘risky’ and ‘dangerous’ move.
The issue has taken a new twist, with the ruling party proposing reduced powers for the courts in dealing with land expropriation cases. Image: Shutterstock

Organised business bodies including Business Unity South Africa (Busa), the Banking Association SA and the South African Property Owners Association (Sapoa) on Monday voiced concern around a new proposal by the ANC that the courts be cut out as the final arbiter on expropriated land and more power be given to ‘the executive’, effectively the state.

Cas Coovadia, acting CEO of Busa and MD of the Banking Association SA, told Moneyweb both organisations would “totally oppose” such a move.

Cas Coovadia says Basa and Busa are opposed to a new proposal to reduce the powers of the courts in land expropriation cases. Image Moneyweb

“At a time that we need policy certainty, we don’t need such surprises coming up … The issue of land expropriation without compensation [EWC] is already contributing to uncertainty in the market and hurting business confidence,” he noted.

Read: New development charges bill: What it could mean for property industry

“We understand that it is on the agenda and needs to be addressed, but the latest move will add to concerns. We will oppose such a risky move, which aims to take power away from the courts and hand more power to the executive in addressing land reform,” Coovadia said.

Neil Gopal, CEO of Sapoa, said while the commercial property industry body is in support of a “win-win scenario” in dealing with land reform, the proposal to remove the courts from the decision-making process would be a “dangerous” move.

“Land acquisitions should take place within the law and follow a fair administrative procedure … Disputes need to be settled in the courts, and no one should be evicted without a due court process,” he added.

“If the courts are removed from this process, the protection of property rights in South Africa is likely to diminish, resulting in a downward investment in agriculture as well as in property investments.”

Read: Capital flight: SA property companies invest billions more offshore

The controversial new proposal in the EWC debate came out of the ANC’s two-day National Executive Committee (NEC) lekgotla, which concluded on January 20. However, there was just one line in President Cyril Ramaphosa’s post-lekgotla statement on the actual proposal, with most of his attention focused on the challenges facing state-owned enterprises.

“We are encouraged that the Lekgotla endorsed the recommendation that the power to determine the quantum of compensation for land expropriation should reside in the executive,” the president said at the time.

More details of the proposal came to light later in the week as ANC NEC members – including Dr Mathole Motshekga, chair of parliament’s ad hoc committee on the constitutional amendment bill related to land reform, and ANC Secretary-General Ace Magashule – spoke publicly about what the shift in its position could entail.

Court processes ‘arduous’

In an interview with TV news station eNCA, Motshekga pointed out that the move is aimed at speeding up land reform, which often faces “arduous court processes”. Magashule was even more vocal on the proposal during an address at an ANC event in Port Shepstone on the KwaZulu-Natal South Coast on Sunday.

“That power to expropriate land belongs to cabinet. That power to expropriate land belongs to the minister,” eNCA reported Magashule as saying. “That’s why we must clearly, when we amend the Constitution, give that power to the minister, to cabinet because what the courts will do is to interpret the law,” he added.

Meanwhile, Coovadia has called for more decisive action from Ramaphosa to establish more policy certainty, as the country’s economy teeters and faces a downgrade of its last investment grade rating.

“We understand that the EWC debate still needs to go through the parliamentary processes and that the ANC has a right to express its views and arguments. However, President Ramaphosa needs to lead and be clear about important policy issues that affect the economy and investment in the country.

“We can’t have irresponsible statements at this crucial time, especially with ratings agency Moody’s watching us so closely,” added Coovadia. “The SA economy is facing less than 1% growth this year and investment is critical right now.”

LISTEN: Bulelwa Mabasa – director at Werksmans Attorneys and a member of the President’s Land Reform Advisory Panel – talks about the land reform changes on SAfm Market Update with Moneyweb:

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I am fortunate enough to watch this circus from afar. When I talk to my friends on the ground in South Africa, they comment that a strong civil society and independent judiciary are the only things keeping the ship afloat.

Now the redestributionists are trying to push through an amendment to effectively allow themselves to circumvent the courts. It doesn’t take a a rocket scientist to see where this goes.

Any right-thinking person knows that this EWC discussion is a distraction, electioneering and pandering to the far-left.

Remember when Hitler was given powers to dissolve parliament to expedite matters in cases of emergency?

This feels familiar and in the context of 1 vote per person, this won’t end well.

Yes, it’s painful to watch the ruling, privileged elite accumulate and extend their assets while locking the poor into generations of suffering and poverty. By 2040 Zimbabweans will complain about the large numbers of South African refugees in their country, and blame them as the cause of all the violent crime.

Invest in salt. I’m ploughing my land with truck loads of it!!!

@craigl. No need for such effort & cost. You can just leave it for the cadres, as no profitable farming will take place. The farm will lay bare.
The masses will (continue to) move AWAY FROM farms to towns/cities begging for food & jobs as has been happening, and putting up shacks in any open area.

One of my more favorite Reagan quotes

“The greatest leader is not necessarily the one who does the greatest things. He is the one that gets the people to do the greatest things”

We the people must stand up and start fighting back collectively..a good start might be a tax revolt?

These comments shows clearly who is in charge of the country and if any one thought Ramaphosa was the saviour, think again.

For sure.

Rama-poser has got his US$ 400 m (par for a trade leader), you think he gives a rat’s for you and I or SA in general? never forget, he was Zuma’s 2-i-c. He’s as rotten as the rest of them

Correct. CR is (primarily) there to SAVE THE ANC from breaking up in 2017. This he achieved.

Saving the country’s economy, you ask? Purely incidental…

The ANC negotiated an agreement prior to 1994, which it probably never intended to honour (A blatant example of “negotiating in bad faith”).
I base my perception on the systematic erosion of the negotiated constitution/understanding through state based attacks such as BEE (and the other alphabet soup efforts which is leading to new hights with EWC) to punish and be vengeful.

Government becomes valuator, regulator, policymaker and judge in the EWC issue, with corruption so high, farmers especially will be stripped of their land for petty reasoning.

You have described COMMUNISM to a T!

Maybe time for our beloved Chief Justice to pull the finger out and fix the justice system.

Galavanting all over the country giving the one memorial lecture after the other does not help one bit.

Dont blame others. The ANC is blaming you directly for running a dysfunctional justice system.

Fix it.

Our Chief Justice himself is in a spot of trouble?

First the AARTO act circumvents the courts, now EWC is looking to do the same. And I am told to invest locally. Which kangaroo court will replace a mostly fair and equitable legal system next?

What did Siener van Rensburg say? ‘The flag will be dipped in a bucket of blood…….’

This clown in his very early start to the elections has thrown down the gauntlet.

I used to say beware the angry hungry masses, let me modify that: Beware the masses AND the angry farmers.

The past drought has devastated many farmers, do the comrats really want to take over deserts with a few buildings on them. One consoling factor is that these idiots have not got anything right so far who says they will get this right. Land invasions will be a bloodbath as Siener van Rensburg said.

Land and property have a value, a price, a cost when property rights and the rule of law are enforced. That value or price does not disappear when ignorant opportunists make a law that allows expropriation without compensation, that value disappears along with the decay in law and order and the respect for property rights. Under such circumstances, the legalization of plunder is not even necessary. The market value of property crashes to reflect the status of property rights and the rule of law.

In a free market system property has a higher value because the owner’s rights are protected. Such a system leads to prosperity because it forms the basis of any modern economy. The property serves as collateral.

The value of property reflects the sanctity of property rights. Any infringements on property rights lower the value of all property. This lower value is not due to a subsidy or a discount, the difference is still paid in the form of lower economic growth, unemployment, a declining tax base, the implosion of service delivery, famine and disease. The cost is merely “nationalised” or spread between the collective.

A law cannot devalue the property. A law that allows expropriation without compensation merely sends the bill to the collective. The nation as a whole pays for the decline in the value of all property. In a free market system property is valued in terms of currency. In a socialist system, the property is valued in terms of lives. People pay with their lives when property does not have value. The average Venezuelan has lost 28kg of body weight over 24 months because of socialist policies. The price will be paid. It can be paid in the form of currency or in the form of human lives. That is the ultimate choice.

By the way, the most serious infringement on property rights creeps up on us, it does not come via the legislature. It comes via SARS, Eskom and the municipal rates and taxes bill. This combination of redistributive taxes is a serious infringement on property rights already. The decline in the value of the listed property sector is the result of this stealth confiscation. The 65% decline in the value of Hyprop was redistributed in the squatter camps and paid as salaries to municipal employees and looted via the national grid.

Richard Quest referred to these stealth expropriation policies of the government in Davos recently. We lure investors and then we steal from them. This is an ambush! This is not an investment opportunity! Luthuli House is a bunch of highwaymen and thugs!

The banks need to start this fight now. Lets face the facts, they sitting with the bulk of citizens title deeds. South Africans are up to their eye balls in debt, love their access bonds.

Stand around any braai and ask any mate if he has his title deeds?

…indeed. The best investment is to drain the full access bond (or apply even for 2nd bond) and invest that directly abroad.

Leave your debt in SA, but keep your life savings in another developed region respecting property rights.

Unfortunately in SA the norm is not (as it in the US), that your property mortgage is ring-fenced to the property. If you are short R100k on your mortgage the bank comes after your other assets as well.

MFK surprised to read this comment.

This must be the most idiotic recommendation I have ever heard and read. Not the 1st time this has come up.

Maybe great If you keep your job and can pay your bond. If not you go bankrupt in SA currency and the assets abroad come back to SA to pay your creditors off.

Help…………….. how does one get out of this?

@pac. Where did I mention “going bankrupt”?

Try to get your ASSETS/SAVINGS in a stable region, is the message here (where your debt is located is of lesser relevance)

Can’t help you if you go bankrupt. Why do you want to do that? 🙁

Imagine if the ZAR tanks sharply, and you have sufficient foreign currency…the SA debt held in ZAR…becomes cheaper to settle using your favorable forex rate)
Apologies for my idiotic recommendation.

Sure hope no one takes this recommendation literally. (The arithmetic is correct)

The article is about expropriation of property without compensation.

1. There really are living breathing souls who are thinking/planning to
do this. Have met one who seems to think that current income and
prospects all hunkydory in SA economy meltdown and a fragile world
economy. Nothing can go wrong.

2. Borrowing money to invest? Well that is only for seasoned
professionals who can afford to lose that money; not for 99% of SA
population. At this stage of a very fragile world economy where there
are far more predictions of serious declines in markets, equity and
property. Great if the ZAR tanks and those “offshore investments”
still retain their original value

3.Borrowing money on fixed property to invest when there is no clarity
at all about the effects of EWC. What if the banks still want you to
pay the borrowing/bond on your expropriated property which may be your
place of physical living? And you have to pay rent on another
property. Yep one can make the Xrate margin differential on the
hopefully still intact original investment value.

4.Of course if you do want your assets offshore do so. Sell your
equities and property and get the net proceeds offshore. But max out
an access bond or take a second bond??? Hopefully the banks will see
through this. If not, that sure will be reckless lending. Maybe one
could sue the banks for reckless lending and it would serve them right
if they got a bloody nose on this one. Then everything all just
peachy 5 years later

5. Bankruptcy not mentioned. Sure pleased that someone did.

6. Beware the correct arithmetic answers; there are many other factors
to consider. I.M.H.O. liquidity, current and forecast, tops them all.

Regards

Government must surely realize that the first piece of land they take where the owner paid fair value (as opposed to being given the land by previous regime), is the start of a scorched earth policy. Most south africans have nowhere to go. I would not blame anybody that blows up their dams & boreholes, collapses mine shafts, burns down their buildings rather than hand it over. I would definitely.

If the government wants land, they can have land.

It will be a serious strategic blunder for people with a fatal vulnerability to trample on the property rights of farmers. The disdain for building regulations make informal settlements a tinderbox.

Responsible people should consider the repercussions for their personal property in informal settlements.

I think that’s one angle. If people believe 55 million people can be fed by everyone growing potatoes and carrots in their backyard, then may the gods have mercy on them.

The other angle: I suspect commercial and residential landowners were happy with EWC as they thought the target of EWC is going to be Freddie vd Merwe and this 3 acre plot in the north. People were happy for Freddie to take the fall.

It has taken a surprisingly long time for them to wake up to the real intent of EWC. It’s simply a land grab, a bribe for the poor and an accumulation tactic for the privileged and connected.

…a “land tsar” they say

TSAR:
“Noun. An emperor or king. (often initial capital letter) the former emperor of Russia. An AUTOCRATIC ruler or leader. Any person exercising great authority or POWER in a particular field”

Aaaah, another hole in the hull of beloved SA Titanic.

I anticipated SARS’ collections will get even more smaller in future as economy shrinks.

20 years into the future: food is scarce & costly. What happened? “The TSAR ate our food” will become tribal folklore.

No more CGT tax for SARS.

This smacks of desperation on the part of the government in trying to cling to power.

When you have nothing more to offer as a government, then start offering someone else’s property to just hang in there a bit longer.

No foresight, no vision, just live for today is a tragedy in the making.

ANC still don’t understand the term A-C-C-O-U-N-T-A-B-I-L-I-T-Y.

When I read articles like this, I realise the wisdom behind a saying that a dead, wise man said about 3,500 years ago: Weather cause droughts, governments cause famine.

Wise words indeed!

Start by taking all the traditional kings land and give it to the people that farm on it. Transfer the land onto their names so that they own it. These ‘traditional’ farmers are producing food and use the land properly.

Land = property

There’s “land” situated below everyone’s residential dwelling. The improvement upon this ‘land’ = property (i.e.part of EWC)
‘Property’ also implies assets = i.e. your car, your savings, your pension.
Indirectly everything is up for grabs.

(In what other ‘practical’ way can the ANC cling to power?)

Any (bonded) real estate (be it farms, industries or residential) still belong to the bank as lender…pro-rata what is still owed to bank. But what happens when asset value falls below o/s loan amount?!
So the ANC will effectively steal from the banks (as people start to default en masse) as bank-depositors will ‘pay’ for the borrowers.

The above is a real risk to bank cash deposits (i.e. fixed dep / money market call, etc). Starting to realise now “the investment risk” for that nice inflation-beating 7-8% cash return in your bank??

(Buying US$ at even rates of around ZAR20/$…may become a sound long-term investment…). Speak to Magnus / get your offshore bank account up and running 😉

This proposal is absolutely chilling.

Anc simply does not care what they do, whatever the cost, in continuing corruption.

What is Cyril doing about this?

Read Cyril’s comments in the article. He thinks it is a great idea. I thought SA may last long enough for me to see out my time here, now not so sure.

And we know how receptive the ANC is to ideas from business. Just ignore all advice until things are completely broken, then complain abut an ‘investment strike’.

There is nothing left in the state coffers to loot so now the cadres have to look at private property. Let’s also not lose sight of the fact that property includes all property, not just land. So once the farms are destroyed through this lunacy the next step will be companies – if there are any left.

..exactly my point as well. As state coffers start to run dry (due to decades of the redistributive cost of AA/BEE/cadre deployment), prescribed assets will likey be next (…as early as Feb 2020 budget?)

EWC is rhethoric to keep the vote pro-ANC, ahead of EFF. But the regime will eventually go that route as well, given very other little choice 🙁

…and I so hoped the ANC will reduce income tax in 2020 😉 to boost economic activity, that would benefit SARS collections.

Saw this coming years ago…just sold our last property in SA and now 100% offshore (apart from personal residence which is last to go).

Then Mauritius/Madeira are looking like good destinations….hopefully before the inevitable anarchy hits us.

..also Georgia (ex-Soviet state). Much cheaper than those island states! Vehicles are half price. Properties on par with SA.

No visa required.

And one can help the Georgians to fight off the creeping Russian border annexation! (Either that, or the ANC’s long fingers)

At least something familiar for Saffas to enjoy, as they play international Rugby (beating Uruguay in bottom rankings)

Many unfamiliar things for Saffas in “Sakartvelo” as locals call it: getting used to almost zero crime. The govt service works.

Ssshhhhh….. Madeira one the worlds best kept secrets.

…I prefer Sicily, Italy. Mafia controlled…..coming from SA, you’ll feel instantly “at home”.

I don’t speak Greek.. Rather go to Cyprus, they understand Portuguese there

Guys, if you plan on taking your assets offshore, why not simply stay here? If you live in one of the popular local “enclaves” you enjoy a quality of life that is on par with the best the world has to offer. The stupidity of local politicians will benefit your bottom line. Their socialist actions will lower the cost of living locally if your capital is offshore. You will be able to hire a gardener and a domestic servant for today’s equivalent of R5 per month is things go pear-shaped like in Zim. The stupidity and incompetence of government will actually act as a huge subsidy for those whose capital is offshore. This subsidy will be so enormous that we will all be voting ANC out of a warped sense of gratitude!

South Africa is the land of milk and honey if your milk and honey come from your offshore account.

ANC are now listening to EFF to get 2/3 majority. All about themselves to hell with the country which they already stripped and to hell with the future of their own people who will starve like Zim etc.There is no such thing like “provide for tomorrow” What do you expect from people who cannot even read figures with more than six zeros? If you cannot even read, how can you understand the value?
I am starting to appreciate Siener van Rensburg

Zimbabwe 2.0

…add, Mozambique 3.0

Well we know where this is going…

Downhill like off a cliff.

Time for a tax revolt! Its the only tool left to protect against this theft

Tax revolt sounds good but is it possible?

..tax revolt already happening in stealthier forms. Anyone these days can name a person in direct circle of friends/family that “voted with their feet” the past 2-3 years especially.

Plus SA companies has also “emigrated their capital” by purchasing foreign companies…in the name of “growth” (too many examples to mention…WW’s David Jones, SASOL’s Lake Charles, MTN, VC & Shoprite forats into Africa, etc etc)

If fear, the ‘direct’ tax revolt may start against municipalities….why pay if your property is taken? And then spread to SARS…there will be losses. Then as Tito says, it will be “gave over” for the country.

Why a picture of farmland in this article?

I dare MoneyWeb to replace the farm image with a neat row of urban townhouses in an estate! (with flashy cars parked in the driveways…like you see on computer-generated real estate glossies)

That will make readers to SIT UP AND TAKE NOTICE!

Michael Plus your bank account, shares everything you owe. I agree with you that will make people realise what the future is about. Imagine. To enjoy a Sunday lunch at your villa with family and and some of them walk in and tell you to f… “this property is now mine” Like how they chased the farmers in Zim off their farms.
Come on Moneyweb as Michael challenged you—out with the truth

Thanks FG. Yes, let’s challenge MoneyWeb to place more thought-provoking and ‘relevant’ images in future. The real deal. The truth as you say.

No CGT, Transfer duty or estate duty.

…makes sense what you say, as most Sandton / Clifton / Rondebosch / Umhlanga properties may sell for “well below” the R900,000 Transfer Duty threshold 🙁

The state seems hell-bent on collecting lower TD, Estate Duty, CGT & Income tax going forward.

agree some of those huge Sandton estates can fit a few families around the pool, tennis court and gazebo. Why always farmland?

…for sure 😉 But also until such time all the “drinking water” in the pool is used up (as taps for whole city would be dry, as their municipal finances would’ve collapsed due to no-one paying rates in this cataclysmic scenario).

The closer you get to cities the more squatter camps you see. The platteland is getting depopulated.

This is nothing but state-sanctioned theft and needs to be vigorously opposed by every person and every organisation who doesn’t want this country to turn into another Zimbabwe!

“That’s why we must clearly, when we amend the Constitution, give that power to the minister, to cabinet because what the courts will do is to interpret the law,” – God forbid that this minister must be subject to the law!

How many prospective new experienced farmers are there for the expropriated land? How many new agricultural colleges have been created in the last 25 years? Do we have sufficient funds to set up the new farmers?

China has a CoroNA virus, causing their markets to fall recently.

South Africa has a cANCer virus, causing local assets to lose value since 2015.

China’s virus is temporary.

South Africa’s virus is PERMANENT!

Squirrel and FlipFlop are in collusion to destroy SA. Guaranteed.

For “the executive” read ANC cadres in committees behind closed doors.

But we’ve seen this before in recent political history: Stalinist and Maoist Chinese Communism, Nazi Germany disposing Jews of property, Zimbabwe’s Mugabe throwing white farmers off their legally purchased land ….

This is telling:  “eNCA reported Magashule as saying. “That’s why we must clearly, when we amend the Constitution, give that power to the minister, to cabinet because what the courts will do is to interpret the law.” Clearly ANC party politics is above the law then.

Which global corporate in their right minds would want to invest here?

The second home(Rental property) and the little house by the sea will be easy pickings.

I say go for it ANC. The sooner the place implodes the sooner the long, hard struggle to rebuild (after the ANC destruction) the better. No use delaying the inevitable and no progress whatsoever is possible while the ANC madness continues..

Ask your bank if you’ll be expected to continue making bond repayments after your property has been “expropriated”.

The ANC just want to expropriate mineral fields to sell to the Chinese.

All comments only focus on farm land. Property means houses, cars , investments , everything.

Beeshaas, correction there, all WHITE owned property.

If property rights operate outside of the law, then transfer duties, Capital Gains and tax on rental interest will also be outside of the law. That will be the beginning of the tax revolt! In my opinion. Property owners and the ANC have each other by the balls with this one. Will be interesting to see who dares win!

End of comments.

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