Recently appointed Minister of Energy Ben Martins introduced an enormous team of officials yesterday at his first press briefing since being appointed to the post in June.
The presentation started with a 40-minute – it seemed much longer – introduction of everyone and the topics at hand. Then about eight people, including the director-general, a deputy director-general, chief director and officials dealing with petroleum regulations and nuclear policy, spoke. Officials outnumbered journalists by about two to one.
Finally, the minister got down to the nitty-gritty, or so we hoped. He was asked what the department was doing about ordinary South Africans who could not afford their escalating electricity bills. And how was the government reacting to the consequences of this inability of people to pay, such as the billions of rand outstanding to municipalities for outstanding electricity bills?
Martins answered: “With regard to the challenges faced by ordinary citizens… in areas where people are unable to pay the fees they are supposed to pay, I would like to remind you that [these] issues fall under the Department of Public Enterprises.
“Our responsibility in the main… is policy formulation.”
While the aim was to be able “to reach a situation where imperatives are such that make it possible [for] people to afford electricity”, the pricing matter was the concern of Public Enterprises as the supervisor of Eskom, he repeated.
Noting that the ANC’s stances on energy were captured in the National Development Plan, he emphasised that “if one summarises the objectives of the department [the aim is to build] energy infrastructure to provide quality energy services that are reliable, efficient and competitively priced to facilitate local production of energy technology”.
An official in his department came to his rescue, pointing out that there were declining block tariffs that applied in municipalities. Free basic electricity services were also provided to the indigent.
The problem with these answers is that it indicates that there are too many chiefs in government, too many responsible departments and not enough Indians paying – or able to pay – for their services.
Local industry needs protection from cheap imports of every kind if we are going to put a dent in the scourge of unemployment in the country.
Most recently in the spotlight are the poultry and sugar industries, which are being brought to their knees by cheap imports. Both say they are at a tipping point as many local jobs hang in the balance.
Local sugar producers had a minor triumph when the International Trade Administration Commission agreed to consider their application for tariff protection against cheap imports which put 40 000 jobs at risk. The industry is asking for the review of the dollar-based world reference price that was too low for local sugar producers to make any money.
The poultry industry, which has been dubbed a “distressed industry”, struggles with issues including ambiguity in the law on brining, dumping of chicken and the high cost of production.
SA Poultry Association chief executive Kevin Lovell and a number of poultry producers, such as RCL Foods and Afgri, say the situation has reached critical proportions and have pleaded for the government to help them survive through an import tariff increase of 82 percent.
The local system is failing producers and as one sugar official pointed out “it’s the small guys that fall off first”. Small farmers are the first to suffer from an ineffective system with little to no profit.
Already the sugar industry has a lower headcount of small producers than at the beginning of the year. Cheap imports may be a catalyst to industry problems, but the inefficiencies in the system inhibit local producers from being internationally competitive. The 25.6 percent unemployment rate will undoubtedly increase unless intervention is swift and effective.
While we are fretting over the hole that unsecured lending is burning in the nation’s pocket it is worth taking heed of some excellent advice coming out of the finance sector as this year’s Johannesburg International Motor Show winds down.
Curiously, in an age where consumers are under pressure to buy more and more – as seen with the latest proposal to clear bad credit records so households can borrow more to spend more to keep our consumer-dependent economy ticking over – the advice is to think carefully before signing away a significant chunk of income to buy an expensive new car.
“The trouble with motor shows is that they are like sweet shops. Everything you see, you want,” says WesBank sales and marketing head Chris de Kock, reminding us that only half the number of people who apply to WesBank for vehicle finance actually get it.
Of the rest, some will be among the 9.53 million South Africans who, according to Standard Bank, had poor credit records at the beginning of this month.
As a result of changes to the National Credit Act, deposits are no longer obligatory, although banks do demand them in 25 percent of cases and most applications are now for repayment over 72 months, instead of what used to be 48 months.
De Kock also cautions against rising fuel costs. In 2010, for an entry-level car financed over 60 months fuel added 28 percent to ownership and running costs. By this year that share had risen to 37 percent.
A final word of caution is to carefully consider the meaning of attractive-sounding balloon payment deals. For a R200 000 car paid over six years with a 35 percent balloon, that means a R70 000 final payment. Usually that translates to another two years of loan payments.
Edited by Peter DeIonno. With contributions from Donwald Pressly, Zandi Shabalala and Peter DeIonno.