Rubber stamping NHI Bill will have damaging consequences for SA for generations
- BUSA / B4SA calls on NCOP and Deputy President to defer Bill for NCOP to properly consider concerns raised by Provinces and many stakeholders.
Johannesburg, 27 November 2023 – BUSA and B4SA have written to the Presiding Officers of the NCOP as well as to the Deputy President, in his capacity as Leader of Government Business in Parliament, to register their deep concern regarding the lack of due process in the NCOP Select Committee on Health and Social Services on their adoption of the NHI Bill without any amendments on 21 November.
BUSA and B4SA say that no consideration was given by the select committee to the many constitutional issues, both procedural and substantive, in the Bill, which were raised by four Provinces and a wide range of stakeholders. This amounts to a serious and significant procedural lapse and a violation and disregard of Parliament’s own public participation model, fundamentally undermining the principles of participatory democracy on which our Constitution is based.
BUSA and B4SA have consequently requested, in their letters to the NCOP and the Deputy President, that the NCOP does not consider the Bill during its plenary session on 29 November, but rather defers consideration of the Bill until the Select Committee has substantively discussed and engaged on the comments and proposals put forward by stakeholders, as well as those of the provincial legislatures and the Department of Health itself. A thorough and proper legislative process would require these constructive inputs and proposed amendments to be circulated, properly considered and only then voted upon.
Cas Coovadia, CEO of BUSA says: “For the National Assembly and the NCOP to disregard proposed amendments that will have a beneficial and tangible impact on citizens, or indeed would prevent harm to citizens, in the interest of rushing the Bill through Parliament, is unconstitutional. It makes a mockery of due process and portrays the NCOP as nothing more than a rubber stamp.
“Our belief is that the Bill in its current form is utterly unimplementable, and will have severe consequences for South Africa, the economy and every citizen, for generations to come. The self-evident truth is that there is no money to fund this NHI Bill, and there is no clarity over its benefits, contracting terms, capacity, systems, management, governance or even a plan that begins to outline a viable approach to these fundamental considerations. We have also repeatedly cautioned against a single fund for the NHI that, inter alia, will require taxes to be raised to unsustainable levels. This is unaffordable, unsustainable and presents a material risk to the economy,” says Coovadia.
Critically, the Bill does not provide for public-private sector collaboration, which is essential for the NHI’s success. To address this, BUSA and B4SA have proposed an amendment to Section 33 of the Bill, which currently says that when the Minister of Health declares that the NHI is fully implemented, medical schemes will not be able to cover or pay for any health service offered by the NHI. This impacts all employed citizens, including public sector employees who currently enjoy medical aids as a material employee benefit through ParMed, GEMS, PolMed and others. By limiting the role of the medical aids, it also imperils the entire private healthcare sector, which depend on them for financing.
As currently drafted, the bill limits access to healthcare for over 9 million South Africans, infringing their constitutional rights. No other country in the world has a legislated limitation on the role of private health insurance, not even the wealthy countries with a substantial tax base and extensive publicly funded healthcare.
Martin Kingston, B4SA Steering Committee Chair says: “Government’s mandate is to act in the best interest of all of its citizens. It is totally irresponsible to rubber stamp into law legislation that will have such a severe impact on the country and her people, ignoring the legitimate and substantive inputs that have been made by multiple stakeholders to date. We recognise that the passing of this Bill is a key aspect of the upcoming election but it must properly take into consideration due process and afford the necessary time and engagement to achieve that.
“The ramifications are significant. There are bound to be numerous legal challenges to the Bill, and the consequence will be that the NHI will not be implemented at a time when we all agree that it is imperative to address the many challenges facing the country’s healthcare sector.
“The private sector has made repeated suggestions as to how reforms can be immediately implemented in order to improve access to quality healthcare for many more millions of South Africans. The introduction of low-cost medical aid options is one such example. All that is required is for the Council of Medical Schemes and the Minister of Health to approve them. These proposals have been on the table since 2015 but no satisfactory explanation has been provided as to why there appears to be regulatory paralysis. Furthermore, the cost of private medical aid cover could be reduced by over 20% if the 2019 recommendations of the Government’s Health Market Inquiry are urgently and responsibly implemented.
“All of these initiatives can start now. This will take further pressure off the public healthcare sector and move universal health coverage forward in a way that supports the NHI, in a meaningful and visible manner.
“The approach adopted with respect to the NHI Bill, including certain key aspects thereof, has created substantial and widespread uncertainty, which is already impacting investment into the sector, and more broadly for the country. By amending Section 33 and clarifying a number of other critical aspects of the NHI Bill, introducing low-cost medical options, and reducing the cost of private care, the country can build a better overall healthcare system with immediate benefit for all. This will attract more capital and investment into the healthcare sector without the Government needing to raise taxes to unsustainable levels or take on additional debt, whilst retaining the country’s precious healthcare workforce.
“These proposed amendments and reforms will strengthen the NHI, to secure access to quality healthcare for all citizens, for generations to come,” concludes Kingston.
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JOHANNESBURG, 31 OCTOBER 2023 – The deteriorating state of public finances threatens the delivery of public services and puts the economic recovery of South Africa at risk.
The Minister of Finance, Enoch Godongwana, has warned that South Africa will run out of money by March 2024, unless it reduces its spending. This is a dire warning that must not escape the attention of the rest of the government, unions, political parties, businesses, civil society, and ordinary citizens.
South Africa has increasing expenditure and decreasing revenues which places the sustainability of its capacity to service its debt in question. As of June 2023, South Africa’s debt to GDP ratio was 72,7% up from 70,9% in the previous quarter. The cost of servicing the debt is now the single largest expenditure item in the budget. At the same time, the South African Reserve Bank has forecast a mere one percent growth in gross domestic product (GDP) in 2024, which is insufficient to generate the revenue needed for the social and economic expenditure of the country.
South Africa also has a growing tax revenue shortfall, in part because of weak household finances, low business confidence, low investment, lower global commodity prices, and a weak rand. Consequently, BUSA recommends the following for the MTBPS:
Curtailing expenditure: The Minister needs to outline clear measures to ensure available funds are spent efficiently and to curtail expenditure, which has to include deep and substantial cuts in spending on non-essential and non-productive programmes, the shelving of unfunded prestige projects and linking future public sector wage increases to inflation. These measures must have the support of the rest of the Cabinet, which must speak with one voice to boost public confidence in the government’s commitment to responsible management of the economy.
Raising debt to fund growth-enhancing expenditure: The Minister has no choice but to raise more debt, as a stop-gap measure to fund capital investment in growth-enhancing economic infrastructure. However, the increase in debt must be kept to a minimum and be complemented by vital economic reforms that will encourage and facilitate private-sector investment.
No tax increases: South Africa’s tax-to-GDP ratio is already amongst the highest in the world. Increasing any taxes will burden households and hobble economic growth further. The most effective way to generate fiscal resources is to support economic growth.
South African businesses are working with the government to resolve the crisis in energy, ease the bottlenecks in logistics, and fight crime and corruption. Businesses’ commitment to the country is clear. However, South Africa needs leadership with the political will to provide a clear policy environment, a commitment to removing barriers to investment, and to building business, investor, and consumer confidence. Economic growth is the national imperative if South Africa is to avoid a fiscal crisis, create jobs, deepen the tax base, and provide sustainable support to its most vulnerable.
Business Unity SA CEO
For more information, please contact:
Tel: 011 784 8000/0766516444
BUSA expresses a significant concern regarding the potential ramifications of the draft Companies Amendment Bill on the business community should it be enacted in its current iteration. While the Bill aspires to bring about constructive reforms, it has also given rise to several legitimate concerns and alarms that require thorough and deliberate consideration as outlined below:
Impact on Small Businesses: Small and medium-sized enterprises (SMEs) are vital contributors to our economy. We are concerned that certain provisions in the Bill might inadvertently place additional compliance requirements and costs on SMEs, potentially impeding their competitiveness and growth.
Complexity and Ambiguity: Some sections of the Bill have been deemed complex and ambiguous, making it challenging for companies to interpret and comply with the new regulations. This ambiguity may result in increased legal disputes and compliance difficulties.
Increased Regulatory Oversight: While enhanced regulatory oversight is intended to improve corporate governance and transparency, business is apprehensive about excessive government interference and bureaucracy.
Data Privacy: Provisions related to the collection and sharing of corporate data have sparked concerns about data privacy and cybersecurity. Companies are anxious about the security of their sensitive information and the personal data of their employees being shared with the public.
Unintended Consequences: As with any significant legislative changes, we are concerned that certain provisions in the Bill may have unforeseen negative impacts on businesses.
Enforcement Challenges: Effective enforcement of the new regulations and penalties for non-compliance is a vital aspect. There is a concern that inconsistent enforcement could undermine the Bill’s objectives.
While acknowledging these concerns, it’s essential to recognize that the draft Companies Amendment Bill also holds the potential to strengthen our corporate regulatory framework, improve corporate governance, and boost transparency in the business environment. Striking a balance between these objectives and addressing the apprehensions raised is crucial for the successful implementation of the Bill.
BUSA is committed to engaging in constructive dialogue with regulators, lawmakers, and other stakeholders to ensure that the Bill is refined to address these concerns while achieving its intended positive outcomes. Getting the Bills right will address the current socio-economic challenges that our country is faced with.
We believe that by working together, we can create a regulatory framework that not only fosters a conducive environment for businesses but also upholds the principles of good governance and accountability.
Economic Policy Director
For more information, please contact:
Tel: 011 784 8000/0766516444
JOHANNESBURG, 04 OCTOBER 2023 – Business Unity South Africa (BUSA) is gravely concerned about the systemic dysfunction at the Unemployment Insurance Fund (UIF) that is putting the livelihoods of workers at risk. The ineptitude of the UIF to fulfil its promises has led to workplace disruption and had a negative impact on the employer-employee relationship. Of major concern is the fact that calls for the authorities to intervene have gone unheeded.
BUSA has been engaging the government, together with labour, at Nedlac to try and resolve serious systemic dysfunction and alleged corruption in the administration of the UIF office. These engagements have been going on for the last three years and no progress has been made due to the inability or unwillingness of the UIF Commissioner to address the systemic issues. BUSA has also written to the Minister of Employment and Labour several times, but we have not received any positive responses.
The systemic issues at the UIF office have been publicly revealed recently by news that questionable investments have put at risk billions of rands that should be allocated to workers in distress. This, especially at a time when poor economic conditions due to load-shedding, escalating inflation, and diminishing consumer demand, are likely to lead to employees being placed on short-time or potentially even laid off. For impacted individuals, the safety net afforded by the UIF benefits scheme is not guaranteed.
The systemic dysfunction has also resulted in lengthy delays in application processes, including via online systems, receiving incorrect information, or constant changes in requirements. Payments, when finally processed, are typically received long after the period of lost earnings, providing little financial support when needed most.
Special schemes, including C19 TERS, Workers Affected by Unrest (WABU), and others designed to support affected individuals, whilst positive in their intention, remain to a significant extent ineffective as hundreds of thousands of applications remain unresolved.
Recent media reports highlighting the depth of corruption that has taken place within the UIF are of major concern. We have consistently urged that the systems be modernised to identify and limit corrupt practices, including within the ranks of the UIF. Central to this is the implementation of effective ICT systems that contain risk mitigation measures whilst enabling simple, efficient, and timeous service delivery to enable workers to access funds when they are in periods of unemployment or on reduced earnings (maternity), and not many months later, if at all.
It is clear the current management within the UIF is unwilling or unable to execute their mandate and has embarked on ill-considered systems, such as the eCompliance platform, which have failed and introduced risk in the business landscape, both for companies seeking assurance about the compliance of their providers and for the protection of workers. Failure to address the systemic issues, including alleged corruption, will result in increased frustration amongst employers and employees, and in greater financial losses that could impact the sustainability of the fund.
BUSA supports the call by other Business organisations and Organised Labour to have the UIF put under immediate administration. We remain committed, as we have been over the past three years, to providing support, advice, and expertise to drive a clear modernisation programme that addresses the changing needs of the new world of work and ensures efficient, cost-effective, and timely service delivery to beneficiaries. The resolution of the systemic issues in the UIF architecture is of critical importance to workers and employers alike. Business stands together with those seeking an urgent resolution to the problems in the UIF system and calls on the minister to act with speed.
Business Unity SA CEO
BUSA Nedlac Labour Market Convenor
BUSA Social policy Manager
For more information, please contact:
Tel: 011 784 8000/0766516444
Johannesburg, 27 September 2023 – President Cyril Ramaphosa yesterday met with members of Cabinet and senior business leaders to receive an update on progress made in the collaboration between government and business. This collaboration was initiated in June 2023 with the aim of significantly growing South Africa’s economy and restoring public and investor confidence through critical interventions to address the key challenges of energy, logistics, and crime and corruption.
Highlighting the meaningful progress made since the start of the initiative, President Ramaphosa said: “We have established an effective working relationship between government and business to tackle the most immediate challenges facing our economy. While we have identified key milestones and set out the processes to achieve these, the real test of our success will be in the results felt by ordinary citizens. We are confident that, by working together and marshalling the significant resources and expertise that exist in our country, we will end load shedding, fix our logistics system, and tackle crime and corruption.”
Adrian Gore, co-convenor of the business delegation, said: “It’s early in the partnership, but the collective work rate has been excellent and there are clear areas of progress, which we believe we can build upon to achieve real change. Putting in place a viable critical path per focal area with clear short term deliverables against which we collectively measure our progress is crucial for building confidence in our ability to deliver.”
Good traction has been achieved within the energy focal area, through the National Energy Crisis Committee (NECOM), which has been established to ensure delivery of the Energy Action Plan (EAP). Business and government reaffirmed the importance of the EAP as the country’s blueprint for reducing the severity and frequency of load shedding in the short term and ending it altogether in the long term. Full implementation of the plan across three core priorities – improving the performance of Eskom’s existing power stations; adding new generation capacity; and reforming the energy sector – will result in over 12 GW of generation capacity being recovered or added to the system from Eskom and the private sector by the end of 2024.
As part of this collaboration, Cas Coovadia, CEO of Business Unity South Africa (BUSA), and Martin Kingston, Chair of the Steering Committee of Business for South Africa (B4SA), noted that business is mobilising additional capacity and skills to support implementation of the EAP. This includes nearly 130 volunteers from the private sector who are being coordinated through the Energy Council of South Africa to work in partnership with Eskom and government. The deployment of technical support teams to five power stations – Kendal, Kriel, Majuba, Matla, and Tutuka – is on track, in addition to ongoing support for the return of Kusile Units 1 to 3.
The Electricity Regulation Amendment Bill has been tabled in Parliament, and the public comment period is underway. Government is engaging closely with Parliament to prioritise the passage of this Bill, given its crucial importance for the reform of the energy sector.
Encouraging progress has been made in the establishment of the National Transmission Company of South Africa (NTCSA), with all three licenses approved by the National Energy Regulator of SA (NERSA), and the appointment of an independent board is in process. The One Stop Shop for energy projects has been established, and a Memorandum of Understanding (MOU) has been signed with the Energy Council to support enhancement of its capacity and systems to further streamline regulatory processes and facilitate private investment in energy generation.
In the logistics focal area, the collaboration is centered on ensuring implementation of immediate operational interventions, which have already been defined, alongside the development of the Freight Logistics Roadmap. Government has committed to finalise the roadmap, which will outline a sequenced set of actions to fundamentally reform the logistics system, by the end of October 2023. Business emphasized the urgency of this roadmap in the context of the ongoing challenges in the logistics system.
Six of the eight work streams of the National Logistics Crisis Committee (NLCC) are now fully operational, while the remaining two will transition from Operation Vulindlela. Interventions to improve the operational performance of the multimodal bulk freight rail network and port system are well underway through the NLCC. Corridor Recovery Teams have been established for five strategic corridors, comprising Transnet managing executives, industry representatives and independent experts, and a delivery plan has been developed with specific actions and timeframes to achieve the targeted increase in freight volumes.
Business and government further emphasized the need to support the Board of Transnet in its turnaround plan in order to drive operational improvement and sustainability.
A multi-disciplinary team has been formed to address congestion challenges at the Lebombo border crossing, resulting in a reduction in the border processing time, while a dedicated work stream has been established to expedite the restoration of passenger rail services. Law enforcement agencies are working to protect rail infrastructure through a range of interventions, including aerial surveillance on the North and Central Corridors as well as the Majuba rail line.
In the crime and corruption focal area, current engagements centre on building capacity within the National Prosecuting Authority (NPA) and Directorate for Priority Crime Investigation (DPCI), along with the modernisation of the 10111 emergency response centre and collaboration between industry and the SAPS to address crimes targeting infrastructure.
The NPA Amendment Bill has been tabled to establish the Investigating Directorate as a permanent entity with investigative powers. This Bill responds to a key recommendation of the State Capture Commission of Inquiry, and will strengthen the capacity and independence of the NPA to tackle corruption-related crimes.
A further meeting will be held in six weeks’ time to assess progress on these commitments. During this period, the immediate focus will be on ensuring the passage of critical reform legislation such as the ERA Bill and the NPA Amendment Bill; scaling up technical support for power station performance recovery; finalizing and adopting the Freight Logistics Roadmap; and establishing a joint delivery mechanism to coordinate agreed interventions to tackle crime and corruption.
Both government and business continue to engage with other social partners in parallel, as part of their respective commitments to advance collaboration on shared national objectives.
For further information, please contact:
Vincent Magwenya – +27 82 835 6315
Business for South Africa:
Cas Coovadia, BUSA – Cas.Coovadia@busa.org.za / +27 79 499 8889
Martin Kingston, B4SA – firstname.lastname@example.org / +27 82 372 5225
Julian Gwillim, Aprio – email@example.com / +27 82 452 4389
Esme Arendse, Aprio – firstname.lastname@example.org / +27 82 694 7643
Note to editors:
About Business Unity South Africa (BUSA): BUSA is a leading business organisation that represents the interests of South African business, covering major sectors and industrial groupings. BUSA aims to create an enabling environment for business success and economic growth in the country by engaging with government, labour unions, and civil society.
About Business for South Africa (B4SA): B4SA is a BUSA platform, bringing together key South African business leaders to address urgent national challenges and drive economic recovery. B4SA focuses on key priority areas and works in close collaboration with government counterparts to find innovative solutions and create a positive impact for all South Africans.
NEW YORK CITY, NEW YORK – On the sidelines of the 78th session of the UN General Assembly, Business Unity South Africa (BUSA), and the U.S. Chamber of Commerce’s U.S.-Africa Business Center (USAfBC) hosted the U.S.-South Africa Trade and Investment Executive Dialogue with the President of the Republic of South Africa Cyril Ramaphosa. The dialogue built on partnership efforts articulated in the organizations’ Memorandum of Understanding, included the launch of an annual U.S. Chamber-BUSA South Africa-U.S. Trade and Investment Forum and explored how the new Trade and Investment Forum can have the most actionable impact on growing U.S.-South Africa commercial ties.
President Ramaphosa said, “Over 600 U.S. businesses are operating in South Africa, the most industrialized and diversified economy in Africa. I am glad that the U.S. Chamber of Commerce convened today’s productive discussions on the U.S.-South Africa economic relationship. I invite more U.S. companies to invest and build manufacturing and other productive facilities in South Africa and share in the opportunities in our economy and the fast-growing African market. I wish the partnership between the U.S. Chamber and Business Unity South Africa well, as it adds to the private sector’s existing efforts to strengthen our countries’ economic bonds, and to expand South Africa’s role as an economic hub in Africa.”
BUSA CEO Cas Coovadia said, “The opportunity is ripe for U.S. and international investors to be part of South Africa’s growth efforts in a partnership between business and government, to put the country onto a sustainable growth path and optimize its amazing potential—exactly the aim of today’s dialogue. The MOU between Business Unity South Africa and the U.S. Chamber—and now our launch of the South Africa-U.S. Trade and Investment Forum—demonstrates how partnership is so key to prioritizing and promoting our countries’ shared growth and prosperity. As BUSA and the U.S. Chamber continue stimulating U.S.-South Africa trade and investment, BUSA stands ready as a trusted partner for investors entering the South African market.”
USAfBC President Scott Eisner said, “At the 2019 South Africa investment conference, I pledged the U.S. Chamber would strive towards doubling U.S. commercial and foreign direct investment in South Africa by 2025—an ambitious target that the U.S. Chamber publicly recommitted itself to last year. Today’s dialogue, themed around ‘An Agenda for Accelerating Economic Growth,’ is organized in that collaborative spirit, and we were honored to hear President Ramaphosa’s vision for the U.S.-South Africa commercial partnership, and of his support for the U.S. Chamber and BUSA’s intent to launch a yearly South Africa-U.S. Trade and Investment Forum. We look forward to further elevating our partnership in-person in South Africa this November, at the next annual United States-Sub-Saharan Africa Trade and Economic Cooperation Forum (AGOA Forum) meeting.”
Learn more about the U.S. Chamber’s U.S.-Africa Business Center here.
Business Unity SA CEO
For more information, please contact:
Tel: 011 784 8000/0766516444
Johannesburg, 18 September 2023 – The National Health Insurance (NHI) Bill if adopted in its current format excludes a collaborative role for the private sector that is critical to the NHI being affordable and sustainable for everyone and undermines the fundamental objective of the NHI, which is to address the current inequality in the South African health care system.
This is according to a written submission made by Business Unity South Africa (BUSA) and Business for South Africa (B4SA) to the Select Committee on Health and Social Services of the National Council of Provinces in respect of the NHI Bill.
Cas Coovadia, CEO of BUSA, said: “Universal health coverage is very important for the future success of our country and our economy, and we are deeply concerned that the current process and version of the NHI Bill with its attendant constitutional risks, is likely to widen health inequality rather than reduce it. However, we believe that with small but critical changes to the Bill, which allows both the public and the private sector to work together, as we did during the COVID-19 pandemic, a sustainable and affordable NHI is possible, that meets the health care needs of all citizens, regardless of their socio-economic status. The NCOP process offers the country an opportunity to make these changes. South Africa’s health care system has much to gain if we get this right. It is essential that we do.”
The NHI Bill creates a single Government-controlled fund relying entirely on tax revenue that will buy and pay for all health care services for everyone, which includes the services of doctors, nurses, specialists, allied health care professionals, hospitals, clinics, ambulance services and medication.
Coovadia said: “The Government says these services will be free at the point of access, but that it will require an additional R200bn to fund the NHI. This is an estimate made by the Department of Health in 2011, but independent experts estimate that the amount actually required will be closer to R500bn. This money has to come from somewhere, and the Department of Health has said it will come from increasing taxes.”
According to FTI Consulting which conducted the analysis on behalf of BUSA and B4SA, just to raise an extra R200bn, the government will need to increase VAT from 15% to 21%, or raise personal tax by 31%, or a payroll tax that is 10x higher than the current UIF contribution, or a combination of these.
“This is not possible, because South African taxpayers who already fund the public healthcare system, are overtaxed and under extreme pressure, and the economy is struggling. This is clear from National Treasury’s recent proposal to cut government spending, warning of unprecedented challenges and South Africa’s deteriorating public finances.
“In addition, a single Government-controlled fund is at risk of running at a loss, and so Government will need to top up the NHI whenever it runs out of money, as we have seen in other countries similar to our own which have adopted this model. This presents a stark challenge to Government – a funding top up will be at the expense of other important services such as education, energy, social security and law enforcement, or the NHI will be forced to reduce the scope and quality of health care services it offers.”
“For all these reasons, we cannot support this model. The NHI’s source of funding and health care benefits need to be clearly understood before the Bill is adopted by Parliament, as it would with any Bill that has tax implications.”
The BUSA/B4SA submission makes the point that a sustainable and affordable NHI that meets the health care needs of everyone is possible if Government and the private sector work together.
The private health care sector is a valuable part of the national health care system with deep and valuable experience, resources, capacity, advanced technology, systems and a track record that can be used to support the NHI for the benefit of everybody. However, section 33 of the Bill does not allow this to happen as it limits the role of the medical aids, which are the main source of funding for private health care providers. There is no other country in the world that has adopted the single Government-controlled fund for health care that effectively prohibits alternative funding sources from the private sector.
Meeting the objectives of UHC requires a sustainable private sector collaborating through a contracting framework that is scientifically informed, independent, and transparent. This must take into account the many differences in costs related to the delivery of healthcare services in the private sector compared to the public sector, and must support continued investment in the private sector. Failure to do so poses an enormous risk to the country’s ability to keep highly mobile and vital healthcare skills and resources.
Martin Kingston, Chair of the B4SA Steering Committee, says the submission outlines proposed changes to the NHI Bill which will allow for the active and ongoing involvement of the private health care sector, and which are needed to set the country on the pathway to achieve universal health coverage. These proposed changes are also intended to address the operational and constitutional challenges contained in the Bill, so that once it is adopted the country can proceed with implementation of the NHI without lengthy litigation.
“We saw the benefits of an effective public-private partnership during the COVID-19 pandemic, when the private sector pooled its skills and funding to support government efforts for the benefit of all South Africans. This partnership continues today, where Government and Business are working together to address problems in the energy, transport and logistics sectors, and tackling crime and corruption. We believe this model, combining public and private funding, can serve as a successful template for ensuring access to quality health care and fostering social solidarity, to ensure no person is left behind. Our country has been at its most successful when the private and public sectors have been able to collaborate in a coordinated fashion, and regrettably, some aspects of the Bill constrain this. For this collaboration to work, it needs to be clearly stated in the Bill.”
In addition, the submission BUSA/B4SA outlined the impact on the provinces, highlighting that the Bill introduces material budgetary and operational changes in the provinces, in that it immediately re-assigns about R196bn or 85% of provincial health budgets to the NHI Fund, and requires significant human resources restructuring, as between the Fund and provinces, for which there is no detail outlined in the Bill. The provinces will no longer be responsible for allocation of this budget to its health care services and employees, as this will be managed at a national level, and the provinces will only be able to invoice the NHI Fund for services provided.
Coovadia said: “We appreciate the efficiency gains that this reorganisation is intended to being about. However, these are significant changes and so require proper planning and impact assessment prior to passing of the Bill to ensure that there are no service delivery interruptions, and that the impact on provincial employees is mitigated. To date, no plans have been shared and it is not clear whether the provinces have been informed of the substantial impact of the Bill, or the risks it introduces to health care delivery.”
Dani Cohen 082 897 0443/ email@example.com
Martin L. Kingston
Chairman – Steering Committee Business for South Africa
8 August 2023
Good afternoon, friends and colleagues, ladies, and gentlemen.
It is fitting that the topic is focused on the social partners’ response to crisis situations. Pre the pandemic, it would have been difficult to characterise the post-democracy headwinds we faced as crises of existential proportions, threatening the lives and livelihoods of our citizens, and presenting unprecedented challenges to economic and social stability.
The ability of social partners to engage and mobilise individually and collectively was seen both in the response to the economic, social, and healthcare ramifications of the pandemic as well as in response to the subsequent civil unrest, the floods, and the present economic challenges. In all these cases we have experienced major crises, threatening to undermine our efforts to deal with the growing and unacceptable levels of poverty, inequality, and unemployment. Failure to address these issues will fundamentally erode the progress we have made since 1994 and the work of society at large to ensure that we can deliver on the explicit aims of our constitution to deliver a better life for all South Africans.
It is only by harnessing the skills, resources, and commitment of social partners that we will be able to avert the worst consequences of any crisis, often unanticipated and achieve our potential as a country. Interrogating how we navigated the pandemic, identified the key considerations, established, and resourced appropriate structures and communicated with our constituencies provide essential inputs and, hopefully, equips us with the tools and knowledge to anticipate and react to other similar situations now and in the future.
I must commend Nedlac and the NRRTT for its speedy mobilisation, the flexible and accommodating governance structures that it implemented and for incorporating social partners into various committees that demonstrated focus, agility and responsiveness to the many issues that arose and for the continuous and transparent communications that took place. The integration of the skills and resources that were required played a significant role in building trust between social partners, ensuring effective intervention during the different phases of the pandemic and creating a precedent for addressing other crises. The success of the NRRTT is a strong justification for focused social compacting.
It is now some three and a half years since the special exco was convened at the IDC in March 2020, resulting in all social partners agreeing to the establishment of the NRRTT. At the same meeting the concept of a Solidarity Fund was launched – an unprecedented social response to the approaching crisis. In that case the structure was conceived, the platform established, the executive formed, and the board appointed, drawn from all social partners within a month of that special exco. We were able to raise over R4 billion in donations from individuals, companies, institutions, philanthropies, and governments. We deployed those funds to efficiently target and support key relief efforts for the pandemic, including the vaccination rollout, for affected communities in the aftermath of the civil unrest and towards the flood victims. For the first year more than 100 volunteers worked unstintingly and pro bono to ensure that the skills, resources, systems, and processes were in place to achieve the objectives of the Fund – with minimum frictional costs, maximum efficiency and impact and full transparency and accountability.
A similar approach informed the establishment of B4SA, Business for South Africa – an all of business response, spearheaded by the Black Business Council and BUSA. Large or small, informal, or formal businesses, across all sectors of the economy, some not members of organized business, brought skills and subject matter expertise to bear, abandoned brands and egos and worked together, harmoniously, and urgently, on an integrated basis to save lives and livelihoods. Within the same timeframe we mobilised over 450 people from a wide variety of disciplines, focusing on the three works streams of healthcare support, including procuring PPE primarily for the Solidarity Fund, working with our social partners within Nedlac to access social relief and drafting the accelerated economic recovery strategy – a key input into the reconstruction and recovery plan, whilst also engaging on lockdown levels and workplace interventions.
In the second year of the pandemic, B4SA focused on collaborating with government and other social partners on the design, development and operationalisation of the vaccination roll out programme, ensuring once again that critical skills were mobilised and partners and funders such as the Solidarity Fund could help enable that critical intervention.
In all these areas, putting in place appropriate governance and support structures, including a properly resourced project management office, ensuring that there were teams focusing on legal and regulatory considerations, and effective, consistent, comprehensive, and transparent internal and external communications were essential ingredients to a successful response.
As the recently released Nedlac report – on “learning the lessons, creating a legacy” correctly depicts, without the role played by the social partners at Nedlac, the harm to the economy and society could have been much greater.
As the report outlines, it was not always smooth sailing. Despite alignment and consensus in many areas, including the need for effective interventions that were practical and implementable, there was understandable disagreement on a number of matters such as mandatory vaccination, the banning of tobacco and alcohol sales, opening up the events, tourism, and entertainments sector with widespread ramifications for livelihoods and the economy.
Some 1.2 million people working in the events industry were directly or indirectly impacted. It has been estimated that the alcohol ban cost the country some R8 billion and put 165 000 jobs at risk, whilst between R4.5 and R6 billion in taxes and 300 000 jobs were either lost or jeopardised due to the tobacco ban. However, regardless of the area for focus, there was a willingness to engage, to access data from multiple sources and perspectives and to seek to align under the auspices of the Nedlac team wherever possible. The structures that were implemented and the agile, proactive, and committed resources that were made available by all social partners-built trust and camaraderie.
In the face of adversity, we saw social partners forging agreement in key areas, resulting in several successful interventions. These included:
- A much-improved understanding by employers of risk-based approaches to occupational health and safety.
- Significant relief schemes such as the Covid 19 temporary employer employee relief scheme (TERS) programme and the social relief of distress grant. We should applaud the fact that nearly 6 million workers received over R60 billion from the UIF.
- The establishment of the National Communication Partnership to ensure that complex messages were effectively and continuously conveyed, leveraging the resources and communication channels of civil society formations, organised labour, the business community, and all arms of government.
We need to internalise and learn from key lessons that emerged during and after the crisis, many of which the Nedlac report highlights:
- The importance of surveillance systems, particularly in the workplace
- Identifying areas where, working together as partners, we could successfully localise the manufacture of key products to support employment growth, in the case of the pandemic, including PPE, ventilator programmes and the production of vaccines.
- Clear, consistent, and comprehensive internal and external communications to build trust and confidence in the role of Government and its social partners.
- The significance of scientific, rational, and evidence-based inputs which withstand scrutiny and can be crisply articulated.
- The need to develop appropriate policy responses to societal challenges including alcohol abuse, gender-based violence, appropriate and safe arrangements for transportation, the workplace, and places for gatherings.
- Relief measures for future crises including adequate funding, adaptable and fit for purpose structures and the ability for rapid response interventions – such as could and indeed should behave been used for other humanitarian crises such as the civil unrest and the floods.
The impact of the pandemic manifested in significant GDP contraction and the permanent and temporary loss of jobs that still reverberate today. Indeed, it magnified and, in some cases, crystallised ongoing structural flaws that have become significant crises in their own right. A year ago, we identified three focus areas of 1) energy, 2) transport and logistics and 3) crime and corruption that had the potential to fundamentally undermine any real prospect of recovery, let alone sustainable and inclusive growth. Individually and collectively, they act as either a brake or a spur on our ability to address poverty, inequality, and unemployment.
We recognise that there are other areas that also demand focus but that limited resources requires us to be disciplined in the prioritisation of critical interventions and scope for collaboration. The creation of structures such as the National Energy Crisis Committee, the National Logistics Crisis Committee and the Joint Initiative on Crime and Corruption; and the formation of the Resource Mobilisation Fund to access and deploy resources to those structures is a clear manifestation of how we, as social partners, can and should respond to such crises. Business has indicated its full commitment to collaborate as evidenced most recently by the CEO pledge.
Nedlac had a crucial role to play and, understandably, given its experience and convening power should be called upon again whenever appropriate in future. Its ability to manage knowledge and disseminate information on a timely basis, whilst co-ordinating and integrating many of the activities of social partners, is an area that requires further consideration.
Let us hope that we can take the lessons we have learnt from these past and present crises and respond appropriately by leveraging on combined skills, resources, and commitment in the future.
Delivered by Cas Coovadia, CEO of BUSA at Nedlac Summit on 8th September 2023, Gallagher Estate, Johannesburg.
Deputy-President Paul Mashatile
Minister Thulas Nxesi
Other Ministers present
Nedlac Executive Director
The Leadership of Nedlac Constituencies
Ladies and gentlemen
We commend the continued performance of Nedlac under the leadership of the ED, Ms. Lisa Seftel, and her team! It is evidence of what can be achieved if an institution has committed leadership, as well as skilled and motivated staff.
The report highlights the crises we face in SA across a very broad front. This includes a negative trend in critical economic and social indicators, ranging from decreasing GDP to increasing inflation, increasing unemployment (especially among the youth), and increasing public debt and debt servicing costs. All of this is exacerbated by ongoing load-shedding, deteriorating security conditions (law and order), the impact of climate change, and ongoing constraints to growth. This toxic mix has led to SA no longer being an attractive investment destination.
The geopolitical dynamics globally are also very volatile, and critical developments like the Russia-Ukraine war, our positioning on foreign policy, and some of the rhetoric around an otherwise valid move towards building a “south” bloc are all impacting negatively on our country.
We note some critical progress in NEDLAC’s performance, particularly the following:
- The decision by the PCC to join Nedlac (albeit on a temporary basis).
- The work of the Governance Task Team to review Nedlac’s founding documents to make the institution future-fit and ensure proper representation, mandates, and positioning.
- The stakeholder satisfaction survey shows that 73% of stakeholders are happy with the performance.
- The achievement of an unqualified audit opinion for the third year in a row with reduced findings. This is important in an environment of growing fiscal constraints.
Notwithstanding the good performance in the last period, we must ask the following questions: What does the future hold for NEDLAC, and what are the critical considerations that will shape it?
South Africa has not seen decent levels of GDP growth since 2007, the year just before the Global Financial Crisis (GFC), where 5.4% growth was achieved. Since then, we have had several crises:
- The load-shedding crisis that continues today and is expected (according to Reserve Bank projections) to deduct as much as 2% from GDP growth in 2023.
- The state capture crisis which took place over a period of more than a decade and all the damage it caused.
- The Marikana disaster which claimed 44 lives and marked the lowest point in our industrial relations in the country.
- The logistics and transport crisis that is destroying growth and jobs.
- The debilitatingly high levels of crime and corruption.
- Infrastructure failures across the board, leading to the outbreak of cholera in Hammanskraal earlier this year, and
- More recently the death of 77 people in one building in Johannesburg.
All of this must challenge us to reflect deeply on our model of engagement as social partners. These things should not be happening in a normal society. How can we continue with the same mode of engagement when things are falling apart? Although Nedlac may not have all the answers, it is the perfect platform for all social partners to raise and address these tough questions.
Business considers the following matters to be critical:
- NEDLAC must ensure it is “fit-for-purpose” to be relevant in the current context and the challenges of the next decade.
- It must be a forum for social dialogue and focus on programs on which there is the greatest scope for collaboration across stakeholders, instead of being a conflictual platform. The ED, in her report, talks about “social compacting.” We agree with this, instead of trying to reach grand social compacts. Our success during COVID-19 was a sterling example of social compacting.
- On public policy matters, Nedlac must facilitate as much agreement as possible amongst stakeholders but must not try to reach consensus at all costs.
- Where appropriate, Nedlac must recognise and appreciate progress on matters through bilateral engagements and seek to add value to those.
In conclusion, let me refer again to the report presented by the ED. She talks about NEDLAC facing an existential risk. We agree with this. It is thus critical for NEDLAC to grapple with its role, positioning, mandate, and value-add. We have mentioned above some of the critical issues to be addressed if NEDLAC is to avoid an existential crisis.
Finally, the ED talks about the world being in a “poly-crisis” and this requires a “poly-response. SA also faces a “poly-crisis” of sorts and NEDLAC must respond accordingly. In an environment of dwindling budgets, we appreciate that Nedlac will need to actively prioritise to maximise its response and impact. As Business, we will continue to play our part to ensure Nedlac’s continued success.
Business Unity SA CEO
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