Did the minister?

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These are pertinent questions.  The draft codes came out in October 2012.  There were apparently 500 odd comments and most were ignored.  Let's face it the commenters were most like going to be those who were affected by the codes.   They made small concessions and fucked up SED.

No one complained.  Back then empowerment was a sacred cow.  But it's not like that anymore.  Think about the Legal code.

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  1. Talk to multinationals and white-owned businesses and ask them about the challenges that they faced in implementing the current version of the codes.
  2. Consider the 800,000 plus white people who live below the poverty line when he decided that 100% of SED contributions must go to black people
  3. Try and figure out how many companies are value-added suppliers (I took a sample of three clients and out of 148 suppliers 56% were NOT value-adding suppliers, by the way none of the major retailers are value-adding suppliers either)
  4. Speak to the SETAs and find out whether they are able to provide sufficient learnership to the economy. I have a large client whose score dropped by 15 points because the SETA would not allocate learnerships to them
  5. Find out how complicated it is to register for VAT when you are below the VAT threshold.
  6. Establish the ramifications for a small business that does need to register for VAT, in registering for VAT. Think admin overhead etc
  7. Consider that 100% black-owned EME's can now happily charge and extra 5.5% on 90/10 tender or 10% on an 80/20 tender and still win the business (fleecing the taxpayer in the process) (I think he did think about this)
  8. Ask himself whether fronting practices will increase exponentially because black companies who turnover less than R10m can bid for work on behalf of white companies who won't even get on the BEE scorecard
  9. Ask whether doubling the target for skills development will impact on productivity (surely if a company like FirstRand has to spend R19k on skills development for each black person they'll never see them in the workplace – they'll be on courses all the time)
  10. Think that using what appears to be national EAP targets under EE and Skills Development will be worth anybody's time
  11. Think that using punitive measures, doubling targets in certain places and raising the entry level to 40 points where the only guaranteed points are those under SED (5%) would encourage people to transform.
  12. Conduct a proper survey within all verticals to see the actual failure (or God forbid success) of BEE at the moment
  13. Take into consideration his own government's responsibility in the lack of skills and literacy in the economy which is holding it back completely.

The answer to these questions is likely to be no. Minister Davies (love the name Rob – it's another word for steal) in all likelihood surrounded himself with mostly black (and disgruntled) advisors on the BEE Council and the BBC (throw in a Ralph Lauren-like character who swears that neither she nor Confucius were involved in the drafting of the new codes – contrary to the reports of many people closely associated with these codes). His stats are open to question – I would suggest that the EmpowerDex figures are based on JSE-listed companies. The state of inequality graph is an indictment on the ANC-led government not the private sector.

Over the next week or so I'm going to put down these ideas on the blog and then combine them into a submission to the DTI to let them know that these codes are not going to work. And I encourage all those who read this blog to do something similar – hell I don't mind if you submit my submission. Part of what we have to be careful of here is that Rob removes the most extreme parts of these codes as a compromise – this is not acceptable. Not even Mugabe has gone to these lengths to fuck up the economy. But then Rob is………………….

PS: I had an interesting conversation with a reader who made an incredible observation – every time there is an ANC conference they pass legislation to appeal to their voters. If we take these codes into account then you'll notice that they are VERY black business friendly. If you consider that there is growing dissatisfaction with the ANC from the black business class then these codes are method for the ANC to buy more votes. It doesn't matter that they aren't going to work – that's a problem for another time. Why didn't I pick up on this!!!

 

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