An association of chambers of commerce has voiced strong opposition to the R100bn Transformation Fund proposed by trade, industry & competition minister Parks Tau.
The fund aims to raise R100bn by 2029 through the use of broad-based BEE codes of good practice and the public interest conditions imposed by the Competition Commission on mergers & acquisitions. It will be administered by a special purpose vehicle of the National Empowerment Fund.
Association of SA Chambers (Asac) chair Melanie Veness said in a statement that while the association embraced transformation as an economic imperative, it supported Business Unity SA (Busa) in opposing the establishment of such a fund.
Asac represents among others the Cape Chamber of Commerce & Industry, Durban Chamber of Commerce & Industry, Pietermaritzburg & Midlands Chamber of Business, Nelson Mandela Bay Business Chamber, Border-Kei Chamber of Business and the Johannesburg Chamber of Commerce & Industry.
It is separate from the SA Chamber of Commerce and Industry.
Busa CEO Khulekani Mathe has been quoted in the media as saying that the proposed Transformation Fund was an “ill-advised” concept, which would not work and would be challenged.
He said in a SAfm radio interview that there had been no consultation on the policy — as required by the constitution — and no discussion document on it. This went against the principles of policymaking. Busa, he said, wanted a detailed document setting out the plans.
Tau committed in a statement on Friday to hold public engagements on the conceptual framework of the plan. He stressed that the fund was not about imposing new obligations but about ensuring that existing commitments under the BBBEE legislation were strategically used to create meaningful economic transformation.
The minister said the fund would address the fragmentation of support by aggregating resources from existing enterprise and supplier development (ESD) obligations and other sources.
Business doesn’t need an additional tax, we need government to enable us to do what we do best and to create an enabling environment for our members to operate in.
— Melanie Veness
Association of SA Chambers chair
Veness said in a statement that there was already a mechanism in place in the form of BBBEE “so this would amount to a form of double taxation, and secondly, we are of the strong opinion that it will not yield the desired outcome.
“We are at the coalface of business, empowering black-owned enterprises and supporting their sustainability as part of our mandate, so we know what interventions are working and which are not.
“Business doesn’t need an additional tax, we need government to enable us to do what we do best and to create an enabling environment for our members to operate in. It’s becoming more and more impossible for local companies to compete globally, given the operating environment, and we’re making it increasingly difficult to attract the level of investment that we need to address our unacceptably high levels of unemployment.
“The DTIC (department of trade, industry & competition) has for years neglected its primary mandate, which is to create an enabling environment that stimulates investment and growth. Onerous policies and an unconducive environment are what’s causing the SA economy to seriously underperform, so we’d encourage the minister to prioritise interventions that address these challenges. We really can’t afford to make things worse,” Veness said.
The BBBEE codes of good practice oblige companies to contribute an equivalent of 3% of annual net profit after tax for the development of black suppliers and they will be required to contribute this to the Transformation Fund.
The codes also make provision for multinational entities in complying with ownership element to set aside funds (25% of the value of their SA operations), which will be used for transformation purposes.
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