Slew of dubious legislation being rushed through Parliament is ‘electioneering at its worst’ - legal expert

Minister Joe Phaahla during a media briefing. 31 May 2023 in Pretoria, South Africa. (Photo: Gallo Images / Alet Pretorius)

By Neesa Moodley

10 Dec 2023

The government is fast-tracking new legislation and legislative changes in what seems to be a blatant ploy to win over voters ahead of next year’s elections.

The slew of legislation being rushed through includes retirement reform (the two-pot system) under the Revenue Laws Amendment Bill, the Pension Funds Amendment Bill, the Road Accident Fund Amendment Bill and the Expropriation Bill.

The biggest one is the National Health Insurance Bill, which was approved by the National Council of Provinces on Wednesday, 6 December. The Bill now awaits sign-off from President Cyril Ramaphosa, but the healthcare industry is aghast that it has gone this far with few to no amendments, and has not taken much, if any, feedback into account.

Martin Versfeld, a partner at Webber Wentzel, says it is nothing more than “electioneering at its worst”.

“It’s extraordinary that the Bill has gone through unamended when even the Department of Health has accepted that there should be amendments pursuant to submissions made by the industry,” he says.

“The only plausible explanation for the way it has been rushed through in such an unseemly fashion is that this is part of the electioneering process.

“It’s got nothing to do with whether the Bill is in good order or not, and everything to do with the ANC wanting to make the statement that they are changing the healthcare landscape, [when] what they’re in fact doing is reckless.”

Versfeld says consequences could include massive disincentives for those wanting to study medicine, massive push factors for healthcare providers to exit the market and huge uncertainty for the medical schemes industry, whose future hangs in the balance.

The Board of Healthcare Funders says the Bill in its current form restricts medical schemes to the provision of complementary cover, potentially rendering them unsustainable, and the enormous economic value that medical schemes currently add to the health sector would be lost to South Africa if the Bill goes ahead unchanged.

Even the Minister of Health, Dr Joe Phaahla, in a carefully worded statement issued on Wednesday, said: “Continued collaboration with all stakeholders, transparent communication and a phased approach to implementation are crucial components of our strategy.”

Versfeld points out that, since the idea of the NHI was first floated, the question of how it will be funded has remained unanswered.

Minister of Health Joe Phaahla. (Photo: Gallo Images / Alet Pretorius)

Retirement reform

Then we have the two-pot retirement reform system, where the implementation date allowing members to make an initial seed withdrawal from their retirement funds has been ping-ponging back and forth.

The implementation date was initially set at 1 March 2023, then postponed to 1 March 2024. The retirement funds industry made much of the fact that this did not give it sufficient time to change its processes accordingly.

At the Medium-Term Budget Policy Statement (MTBPS) on 1 November, National Treasury indicated that the implementation date would move to 1 March 2025. And then, in an astonishing about-turn, Parliament’s finance committee voted to move the implementation date back to 1 March 2024 (on the back of very loud motivations from labour unions), before the implementation was moved to 1 September 2024, where it now stands.

Joon Chong, a partner at Webber Wentzel, says retirement funds have indicated they need 12 to 18 months from the date of final legislation to implement the required changes. However, the September implementation date, though better than 1 March 2024, will only give them six months’ lead time.

“Effectively, around 1,324 active retirement funds will have to have rule amendments signed off by the Financial Sector Conduct Authority before 1 September,” she says.

Finance Minister Enoch Godongwana has cautioned that this process alone will take at least three months.

SRD grant extension

The Social Relief of Distress (SRD) grant has been extended by another year to March 2025, although National Treasury has made it clear that additional taxes may be needed to fund the grant.

The SRD grant was introduced to support low-income individuals affected by the lockdowns during the Covid-19 pandemic and was intended to be in place for one year only. However, as elections loom in 2024, the grant has been extended each year, despite the glaring lack of a funding mechanism.

The MTBPS last month cautioned that, if the SRD grant or a similar type of new grant were made permanent, beneficiaries were expected to increase from 27.3 million in 2023/24 to 40.4 million in 2040/41. This was expected to shift social grant expenditure to 3.8% of GDP in 2040/41.

ANC’s dwindling popularity

The results of three separate, independent opinion polls released in October could point to the rationale behind the legislation being rushed through with little thought given to practical implementation or funding.

An Ipsos poll in June and July found 43% support for the ANC, 20% for the DA and a much-improved 18% support for the EFF, with the remaining 19% split among a host of smaller parties.

Two separate telephonic polls, by The Brenthurst Foundation and the Social Research Foundation, presented similar results. Notably, the Ipsos and Brenthurst Foundation polls also showed the ANC losing its majority in two key provinces: Gauteng and KwaZulu-Natal. Together with the Western Cape, which has long been governed by the DA, the three provinces account for more than half of South Africa’s population and nearly two-thirds of its GDP. DM

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