During a parliamentary debate on draft legislation on the insourcing of workers tabled by the Economic Freedom Fighters (EFF), the party’s deputy president Floyd Shivambu addressed the topic of prescribed assets.
President Cyril Ramaphosa said in August that South Africa should discuss prescribed assets, the policy of using worker pension funds to finance development and infrastructure projects, a proposal that earned the backing by the Congress of South African Trade Unions (Cosatu).
According to Shivambu, there shouldn’t be an outcry about government potentially adopting this policy, as all white South Africans are already a beneficiary of prescribed assets due to apartheid-era policy.
“Let’s us clarify prescribed assets; the reality is that all white people in South Africa are beneficiaries of prescribed assets by the apartheid government,” he said.
“The apartheid government had channeled all pensions to benefit the white minorities when sanctions were being imposed against apartheid, they utilised those prescribed assets to benefit.
“All white people in South Africa are beneficiaries of prescribed assets and when we want to use that for the benefit of black people, they want to cry foul and say there is a crisis,” he said.
The apartheid government did indeed implement prescribed assets. Faced with international sanctions, the National Party (NP) resorted to this policy to fund state-owned enterprises (SOEs) like railways, harbours and the SA Airways (SAA).
However, at the time political analyst Daniel Silke cautioned against government repeating mistakes which were made under apartheid.
“Should prescribed assets be legislated into law, it means that a certain portion of these funds will go towards funding the ailing and mismanaged SOEs like Eskom, SAA and Transnet, in a compulsory fashion through government bonds.
“When the NP government channelled this money from pension funds, there were outflows out of equity funds into government bonds.
“The problem with this approach is that it affects the equity markets by reducing the value of equities.
“The equity component of the funds lost value, because reinvestment with government bonds did not provide effective returns. State-owned bonds underperformed,” Silke said.
The EFF second-in-command also said during the debate that the relationship between SA and UK is still “neo-colonial” and that the government’s policies seek to maintain this status quo.
“The Ministry of Trade and Industry is one of the most dependable colonial administrators in the post-1994 setup.
“Whatever they do, whether it is industrial policy or trade policy or issues that deal with tax avoidance, what they seek to achieve is to protect the white minority economic control of South Africa.
“The reality is that there won’t be anything fundamentally shifting in terms of the colonial status SA occupies in its trade relationship with the United Kingdom,” Shivambu alleged.
(Compiled by Daniel Friedman. Background reporting, Brian Sokutu)