DA Leader Mmusi Maimane
Instability over the implementation of legislation is exacerbating uncertainty around policies – something South Africa can ill-afford as it tries to retain its attractiveness as an investment destination.
There was an absolute need for predictability and stability around South Africa’s legislation and policy framework, Democratic Alliance (DA) leader Mmusi Maimane said on Friday.
Speaking at the Southern African–German Chamber of Commerce and Industry’s first member’s brunch of the year, he asserted that promulgating and then retracting or altering policies created an environment of uncertainty for current and potential investors.
The continued regulatory uncertainty was apparent in the recently announced deferment of the Taxation Laws Amendment Act and the promulgation and easing of the visa regulations last year.
Cabinet on Wednesday delayed the commencement of the Taxation Laws Amendment Act, 2014, which was set to be promulgated on March 1, by two years, to allow for further consultations with all key stakeholders that could result in further amendment to the laws.
The new law stipulated that both provident and pension fund contributors would only be permitted to extract one-third of their fund benefits in cash upon retirement, with the balance to be used to acquire annuities.
“It is apparent that despite the extensive consultation processes which were embarked on before the law was passed that those concerns still exist and that those concerns have to be addressed urgently to ensure that, when the law commences, the changes to the provident fund benefits will be implemented smoothly and efficiently,” Cabinet noted in its post-meeting briefing on Thursday.
However, Maimane expressed concern over the amount of influence trade union federation Congress of the South African Trade Unions (Cosatu) had had on the sudden retraction after the African National Congress-aligned organisation threatened strike action and the removal of its support for the party in the upcoming local government elections.
Cosatu had strongly opposed the provisions of the new Bill that would see workers unable to access all of their savings in a lump sum at their own discretion.
Further, Maimane pointed to the controversial visa regulations implemented mid-last year, which attracted much criticism over certain strict regulations, such as requiring visitors to provide biometric data when applying for visas and requiring parents to carry unabridged birth certificates for their children when travelling to South Africa, besides others.
An inter-Ministerial committee on the Immigration Act and Visa regulations was subsequently established to investigate the unintended consequences of the new laws, which were eased somewhat by October.
Meanwhile, the mining industry continued to face uncertainty in a weak commodity environment and required clear legislative direction, but was still awaiting the finalisation of the long-overdue Mineral and Petroleum Resources Development Amendment Bill, Maimane added.
Earlier this week, Cabinet reaffirmed its commitment to ensuring the finalisation of the Bill, which was before Parliament.
Further, Maimane declared the new Land Expropriation Bill unconstitutional.
The unpopular Bill was adopted by the Portfolio Committee of Public Works in February; however, it remained “at odds” with the Constitution, particularly as the definitions of “property” and “expropriation” were unclear, he said.
The Land Expropriation Bill restricted foreign ownership of land and allowed the Public Works Minister the right to expropriate land for a public purpose.
The move was widely believed to risk foreign investment in an environment where the need to take action to develop South Africa as an attractive investment destination was critical, said Maimane.
Earlier this month, Engineering News Online reported that several organised business groups had called on government to apply stricter, more robust regulatory-impact assessment criteria before developing policy, legislation and regulations, as the uncertainty surrounding South Africa’s policy direction would continue to negatively impact on the domestic economy and foreign direct investment.