Judgment reserved in DA fight against transformation criteria for government relief

Black economic empowerment. Picture: werksmans.com

The DA has argued that government needs to consider the financial status of companies applying for Covid-19 relief and not use broad-based black economic empowerment (BBBEE) criteria to determine who gets funding.

The DA on Monday asked the High Court in Pretoria to declare it impermissible and unlawful for government to use BBBEE status, race, gender, age or disability as criteria for funding during the pandemic.

The case was heard virtually by a full Bench, led by Gauteng Division Judge President Dunstan Mlambo.

The party argued that government’s decision to use transformation criteria when determining who gets economic relief was illegal.

Arguing for the DA, advocate Steven Budlender told the court there was no need for race to be used as a metric to determine who benefits from government funding.

“We say the BBBEE Act has no application here. There are neutral ways of assessing need that do not require the imposition of race, gender or disability,” he said.

To contend otherwise demonstrated a lack of appreciation of deep structural inequality within society along the lines of, among other things, race, gender, age and disability.

Budlender further argued government could look at the current financial status of those applying for relief.

“If you were to design a system that says we are going to look at cash flow over the year leading up to Covid-19 (lockdown) and the cash flow in the month of lockdown, or we are going to look at sales. That would be a way of [using] objective criteria that avoids any need to overlay race or gender,” he told the court.

In response to the DA’s application, Small Business Development Minister Khumbudzo Ntshavheni said race, gender, age and disability were recognised indicators of past and present disadvantage.

She also said it assisted with identifying the most vulnerable people in society.

“There can never be a debate that government is, as a matter of law and policy, entitled and enjoined to prioritise these vulnerable sectors as beneficiaries of state-sponsored relief efforts,” she argued in papers.

“To contend otherwise demonstrates a lack of appreciation of deep structural inequality within our society along the lines of, among others, race, gender, age and disability. This inequality has been sharply highlighted by the Covid-19 pandemic which disparately affects the poor and marginalised,” the minister said.

Judge Mlambo reserved judgment.

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