Collecting money is easy, spending well is trickierComment on this story
It was the sort of State of the Nation address that everyone expected a few weeks ago from the president. It was strong on “here’s where we’ve come from, and here’s where we’re going to”. Which is just the sort of stuff that makes a citizen want to jump up and proclaim “Yeah South Africa”.
Once a year or perhaps twice – if we allow for the medium-term budget thingy – we all get a reasonably close view of what must be one of the most impressive government departments in the world, the Treasury. It is a formidable machine.
And while the un-remarked prospect of a Treasury without Pravin Gordhan is a particularly grim one, the fact is that the pool of talent in his department is exceptionally deep.
It is unfortunate for President Jacob Zuma that each year the remarkably impressive performance from the Treasury follows, and therefore highlights the modesty of, his own speech after just a few weeks. But, in Zuma’s defence, he has a much tougher task than Gordhan.
Gordhan is responsible for collecting the money and then, in combination with his cabinet colleagues, for allocating it to the various departments. Zuma is responsible for how it’s all spent. And it’s the spending that causes all the problems.
This is not unique to the South African government or its fiscus. A few years ago, when one of the world’s richest men, Warren Buffett, first ventured into philanthropy, he remarked: “Making money is the easy part, it’s spending it well that is difficult.” Or words to that effect.
Since Trevor Manuel first took the reins, the Treasury has mastered the science of “making money”. The good news is, of course, that judging by yesterday's budget, the Treasury – with the support of the cabinet – remains determined to ensure the same skills and integrity are applied to the more challenging “spending money” part of the government.
Property sector merger
The co-operation agreement signed between listed property companies Rebosis, Delta and Ascension that averts a hostile takeover or legal battle is to be welcomed.
The three companies said the proposed merger, if successfully concluded, would result in the establishment of the largest listed black economic empowerment property fund on the JSE with an anticipated property portfolio valued at more than R16.5 billion and a market capitalisation in excess of R9.5bn.
The signing of the written co-operation agreement follows Delta and Rebosis earlier this month both announcing details of shares acquired or secured in Ascension and both claiming to have valid agreements for the acquisition of Ascension Management Company (Manco).
A hostile takeover or even an expensive legal battle appeared to be looming for control of the Ascension Manco. All three companies need to be complimented for their maturity in seeking and finding a way to resolve the dispute in a non-confrontational and most likely far less expensive way, which will also be in the interests and to the benefits of investors in the companies by preventing the erosion of distributions because of legal costs.
Analysts have predicted consolidation in the listed property sector this year and there was an imminent threat that smaller companies in the sector might be swallowed by their larger counterparts.
A merger of Delta, Rebosis and Ascension will hopefully permit a much more cordial relationship between the management of these firms than if they were taken over by one of the property giants.
The benefits or rationale for the merger spelled out by the three companies appear convincing. However, there is still likely to be some friction about which personnel are retained in the merged entity and will fill the top management positions.
Platinum strike violence
Yesterday, two Association of Mineworkers and Construction Union (Amcu) leaders appeared in court for attempted murder of an Anglo American Platinum (Amplats) employee who was on his way to work earlier this month.
The attempted murder case, involving Amcu’s Siphamandla Makhanya and Jacob Khoza, came amid intimidation and humiliation meted out to employees who want to work.
Brigadier Thulani Ngubane said the incident happened after the employee asked the two leaders for a lift to the Khuseleka shaft where he works on February 3.
Instead of taking the employee to his workplace Makhanya and Khoza allegedly drove to a picketing site where the man was stripped naked and assaulted.
“The man ran naked to the mine shaft to find refuge with the mine security. He lost three fingers in the incident,” Ngubane said.
Incidentally, Makhanya, the chairman of Amcu’s Khuseleka branch, is one of the 39 Amcu leaders that Amplats wants fined or arrested for contempt of court.
Intimidation is increasing by the day in the strike involving the 70 000 Amcu members at Amplats, Impala Platinum and Lonmin – who downed tools on January 23.
After having missed a month’s salary, many employees will want to return to work, and we can expect more incidents of intimidation.
In the six-week unprotected strike involving 17 000 employees at Impala Platinum in 2012, intimidation was common.
Many people stayed at home to avoid being victimised by striking employees.
The employers are proposing a wage increase of between 7.5 percent and 9 percent a year over three years. Amcu wants a R12 500 a month minimum wage.
According to a statement by employers earlier this month, the proposed increases will take the minimum guaranteed pay for entry-level underground employees to between R9 390 and R10 250 in the first year and to between R10 900 and R11 900 in the third year. The salaries are better than those of waitresses, security guards and petrol attendants.
Edited by Peter DeIonno. With contributions from Ann Crotty, Roy Cokayne and Dineo Faku.