Echoing the sentiments of his Commander in Chief (CiC) that the state president had failed to provide a comprehensive plan on addressing challenges faced by the country, EFF deputy president Floyd Shivambu offered President Cyril Ramaphosa some advice during the debate on the Sona yesterday.
“Maybe we must take this opportunity to give you some free advice because we do that – we specialise in that as a government in waiting,” Shivambu said.
Shivambu tabled three main proposals, which were the establishment of a sovereign wealth fund – a state-owned investment fund – forming a state-owned assets supervision administration commission and that the president should deal decisively with tax avoidance.
Shivambu said the state-owned investment fund should be similar to the Singaporean investment holding company Temasek.
“Temasek has got a net value of $275 billion – that is trillions of rands in a country which has a population of about 5 million,” he said.
The EFF leader said though Singapore did not have mineral resources nor strategic assets like South Africa, it had intelligently created a holding company that was earning money for its citizens.
“It can be modelled in the form of China’s Investment Corporation,” Shivambu added.
He said the Chinese government emulated the Singapore state-owned company by establishing China Investment Corporation in 2007.
“It is worth more than eight trillion, currently. It contributes currently to the country’s national revenue fund, a meaningful contribution,” Shivambu said.
He questioned why South Africa has not established a sovereign wealth fund which would contribute to the country’s coffers.
“There is enough expertise found in the PIC [Public Investment Corporation] and in the emerging black asset managers that can be redirected into the sovereign wealth fund,” he said.
Shivambu’s second proposal, the establishment of a state-owned assets supervision and administration commission, would be similar to the one in China, SASAC – State-owned Assets Supervision and Administration Commission of the State Council, the People’s Republic of China which oversees the country’s state-owned companies.
“The important component about China’s state-owned companies is that of the top 500 companies in the world, China has got more than 100 state-owned companies there, who go all over the world to earn the Chinese government a lot of resources, invest in their development,” he said.
He further advised that when government reforms state-owned companies, the practice of single ministeries running those organisations should be discontinued.
“We cannot have the Department of Public Enterprises as a single shareholder of Eskom, there should be other role players – DBSA [Development Bank of South Africa], IDC [Industrial Development Corporation], PIC, so that accountability mechanisms are handled better,” the Commissar said.
The EFF leader said Sars is efficiently technically capacitated to deal with tax avoidance.
“Legislate clearly on what we do with the billions of rands that are being lost to creative accounting practices of almost all the multinational companies that exist in South Africa,” he said.
He further said this law should cover illicit flows, base erosion and profit shifting.
“Because in the current framework of your revenue collection, you have got a permanent short blanket of revenue, you cannot cover everything,” Shivambu said.
He added that the country would need to multiple by ten its current budget for it to deal with its developmental challenges which include the eradication of informal settlements, the provision of free tertiary education for all as well as proper quality roads and create jobs for the millions of South Africans who are unemployed.
“What do we do to deal with non-tax and tax revenue collection streams so that we are able to find a balance?” he said.
According to the Shivambu, one of the crucial focus areas the president has to immediately deal with is the expansion of the quantitative and qualitative space in the higher education and training sector.
“Because there are 1 million children in universities and TVET colleges but there are 2 million learners who are eligible to access the system who are outside,” Shivambu said.
To address this, he said the government would have to redirect its focus from building new universities to expanding existing institutions by instructing these to have an annual 20% increase in the intake of students.
“The last issue that we are going to deal with is that we are not happy with your close relationship, president, with white monopoly capital. They seem to be very comfortable with you. If white monopoly capital is comfortable with you, it means something is wrong. You cannot be friends with white monopoly capital,” he said.
He further advised that a visit to the widows of those who died during the Marikana Massacre is long overdue, adding that government should not be ordered by a court to compensate the families of those who lost their lives during the massacre.