There is no truth to speculation that the ANC wants to review regulation 28 of the Pension Funds Act so that it can use pension funds to bail out struggling state-owned enterprises.
This is according to Enoch Godongwana, head of the ANC’s economic transformation subcommittee. He was speaking during a webinar organised by the ANC-aligned Progressive Business Forum on Monday evening. The webinar was called to discuss the party’s economic recovery plan, announced last month.
“I want to dismiss and debunk the claim that we want to utilise pension funds to bail out collapsing state-owned enterprises,” said Godongwana. “And the latest theory is that we want to fund the state bank. All of those things are mischievous, with the intention of discrediting our argument. That’s not where we are at the moment.”
The proposal to amend regulation 28 of the Pension Funds Act is carried in a discussion document of the ANC’s economic transformation committee titled “Reconstruction, Growth and Transformation: Building a New and Inclusive Economy”, published last month.
The party has been at pains to say this is not an attempt to grab private pensions through prescribed assets.
In the document, the ANC said amending regulation 28 of the Pension Funds Act would “increase access of the savings of South Africans to fund long-term infrastructure capital projects managed by development finance institutions (DFIs)”.
Some of the proposals the ANC is making as part of resource mobilisation include the establishment of a state bank as part of expanding access to funding of small, medium and microenterprises and low-income households.
“You will recall that in our conference, we emerged with a proposition which suggests that we should look at prescribed assets,” said Godongwana on Monday.
“When we talk about tweaking regulation 28, we are moving in a slightly different [position] from what conference said. We are moving from an environment where there is no enforced prescription, but you create an environment where trustees can be able to invest in infrastructure projects, as long as those infrastructure projects are profitable.”
Godongwana said the new nuance emerging in the document from the ideological perspective of the ANC is that they have now agreed on taking private-public partnerships and build-operate-and-transfers.
“That is the new thinking within the ANC,” he said.
Co-operation between role players would be key in efforts to recover the economy, he said, adding that the government, business and other parties already agreed on a range of areas.
According to ANC treasurer-general Paul Mashatile, also a panellist in the webinar, the amendments to regulation 28 will also facilitate direct access to pension funds’ pool of resources by development finance institutions. These amendments will be accompanied by the introduction of strict measures to prevent the erosion of workers savings, he said.
“In the delivery of infrastructure which is key to South Africa’s economic recovery and reconstruction, great care will be taken to ensure that local industries are privileged and that the empowerment of women, young people and people with disabilities is strengthened in a manner that fosters competitiveness and resilience,” said Mashatile.
He said attention will be paid on improving the state’s technical and financial capabilities to fast-track the delivery of infrastructure projects.
Mashatile said the ANC is ready to mobilise all stakeholders around the infrastructure-led recovery and new investments in energy, water, sanitation, bridges, human settlements, health, education, digital infrastructure and public transport.