Tripartite Alliance moots prescribed assets, self reliance

Encourages the use of both privately managed pensions and civil-servant retirement funds administered by the PIC.
Image:: Michele Spatari/AFP via Getty Images

An alliance between South Africa’s ruling party and labor unions is pushing for the mobilisation of domestic pension funds to drive economic growth, and urging caution about borrowing money from international financial institutions.

A discussion document dated May 25, prepared for meetings of the alliance members, cited the use of so-called prescribed assets during the apartheid era to fund infrastructure. South Africa has been ruled by the African National Congress, which is in an informal alliance with the Congress of South African Trade Unions and the South African Communist Party, since white-minority rule ended in 1994.

Attempts to fuel growth “must include a large drive toward domestic resource mobilisation from both the public and private sectors,” according to the document seen by Bloomberg and verified by Cosatu. Measures taken must include “among others, impact investments, interchangeably developmental and productive-asset investment requirements,” it said.

The alliance encouraged the use of both privately managed pensions and civil-servant retirement funds administered by the state-owned Public Investment Corporation.

South Africa’s economy is forecast by the country’s central bank to contract 7% this year as a result of the coronavirus outbreak and the loss of the last investment-grade rating on the nation’s debt. While South Africa has shunned the use of funds from institutions such as the International Monetary Fund in the democratic era, labor groups have now backed the government’s approach to the lender to seek $4.2 billion from its Covid-19 relief facility.

“International finance should therefore only be accepted if the conditions do not undermine, compromise or subvert South Africa’s national sovereignty, democracy or independence,” the document said. It should “neither interfere with our domestic development policies and goals nor our fundamental right to self-determination,” it said.

© 2020 Bloomberg

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Prescribed assets is a dangerous when projects can be procured normally in non-corrupt regimes, but now when things are desperate and projects need to be procured quickly, the wastage factor(BEE) will increase dramatically and the corruption factor(ANC) with increase beyond control.

While it is good not to have too much hard-currency debt, it is still better to get government rather to do the structural reforms – get rid of non-productive people, reduce salaries, and get everyone to pay for electricity.

RW Johnson was correct when he notes in his book that SA can choose to either have a modern industrial economy or the ANC, but it cannot have both.

So let me get this straight: people who have diligently saved some of their income over many years in order to ensure a safe retirement must now risk this money being used to prop up SOEs that have consistently been a black hole of disaster, with billions upon billions lost to mismanagement and corruption?
What kind of people are these in the Tripartite Alliance that could even think up stuff like this? Oh, maybe I get it: the Communists in the govt (who wouldn’t dare to stand alone in an election) think that THEY will do things differently here in SA. Never mind that there are some 30 countries worldwide where Communism has destroyed the economy and been chucked out, plus another 50 countries where Communism was part of the multi-party govt and are now listed as ‘Former multi-party states.’ COMMUNISM. DOES. NOT. WORK. Historically proven. Yet we have these utterly discredited types shaping our laws in this land? Dear God, help us.

If you still have a pension in SA take the knock and cash it in ASAP. Get the money out as far away from these thieves as quick as possible. Offshore is the only way.

If you don’t you only have yourself to blame. Do you trust socialist / unionist / communist thugs to look after you in your old age? Especially with the “history” they have?

Go stand in front of the mirror when you answer this question.

How do you cash in your retirement annuity or pension fund if you are below the age of 55?

There you go folks! Socialism: You eventually run out of someone else’s money

The state cannot run a bath and now wants your struggling pension funds to plug the hole of corruption and mismanagement.

GET YOUR MONEY OUT OF SA NOW!!

Convert all the public-sector funds to defined-contribution and see if Cosatu still sing the same song.

End of comments.

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