Failure @ Government

14 Jan 2020 | R M Ertner (Into SA)
Government South Africa fails

The departments of government have in 2019 – more than ever before – across the board and for reasons beyond any comprehension discontinued to fulfil their mandates to administrate and serve the public, us, the residents of South Africa. Here are some “Downlights” of the last year, which can leave one only speechless, frustrated and in awe of the shenanigans this circus has served us as politics. Let’s rewind and review what our "government” was up to last year:


Already in October 2018 SARS admitted to a four-year backlog of VAT Refunds, totalling a staggering ZAR 20 billion in VAT refunds owed to companies. Former and current senior SARS officials, who have appeared at the Nugent commission of inquiry investigating the destabilisation of SARS when Tom Moyane was at the helm, have testified that VAT refunds were withheld to manipulate the tax revenue collection numbers.

Notably, the chief executive officer in the office of the tax ombudsman, Eric Mkhawane, told the commission, headed by retired judge Robert Nugent, that delayed VAT refunds had been raised in the ombudsman’s annual reports tabled in Parliament. In addition, the delays were also noted in the ombudsman’s quarterly reports to the commissioner since 2014.

Mkhawane said the cases where SARS had placed unwarranted special stoppages on tax refunds were “causing a lot of inconveniences for taxpayers”. He said taxpayers who lived far from SARS branches would have to take time off work and travel long distances to verify their banking details if they were “lucky enough to be served”. Mkhawane said even after completing the relevant verifications, two months or three months would elapse and the refund would still not be released.

Finance Minister Tito Mboweni acknowledged that withheld tax refunds had harmed company cash flows, particularly those of small businesses. He said clearing out the refunds would provide a “much-needed boost to the real economy”. As much as he is right, nothing has changed – neither under him nor under his successor Lesetja Kganyago – and the fact remains that SARS is in possession of billions of rand VAT, which SARS is not entitled to as it is collected without any value added to any local supply chain.

However, the SA Revenue Services have now declared it their standard to delay and reject VAT Claims, partly with insane excuses like they cannot find the bank branch details online or that due to cash flow issues payments are delayed.

With gross negligence and under the non-existing supervision of SARS Commissioner Edward Kieswetter, who had been appointed more than six month ago, SARS is continuing to cripple small and medium businesses by delaying VAT Payments.

Here is how a typical SARS VAT Refund Process goes down (… the drain):

28 FEB VAT Claim filed via eFiling, claim due to SME PTY ZAR 100 000. The 21-day processing period starts to run.

31 MAR NO PAYMENT – follow up reveals that the eFiling portal was not properly linked and that return need to be submitted again. 21 days start to run again.

30 APR NO PAYMENT – follow up was finally answered on 8 May with the reason that the new return has not been submitted and therefore the old one cannot be processed. Now that return was submitted as well, claim for another ZAR 60 000. 21 days start to run again.

31 MAY NO PAYMENT – follow up this time reveals that the bank account of SME PTY needs to be verified, which has to be done physically at one of SARS branches with one of the directors present.

4 JUN Director SME PTY is back from his business trip to Italy and attends SARS Branch where he is issued a letter that the bank he is banking with in South Africa (one of the 20 accredited banks by Reserve Bank) is not recognised on their system.

7 JUN Proof of bank accreditation is sent by bank to SARS. 21 days start to run again.

30 JUN NO PAYMENT – follow up reveals that there is a balance of ZAR 28.55 outstanding from a penalty levied for late payment of PAYE and UIF in February and it is requested to set those off against claim in order to process. Although they were never served any notice of penalty this was agreed to by SME PTY and the 21 days run again.

31 JUL NO PAYMENT … and so it goes on and on and on … until you have to file for liquidation!

HOME AFFAIRS: Immigration Visa and Appeals

The Department of Home Affairs, represented by the Acting Director General, Thulani Mavuso, has opted for not acting after all and after former Minister Malusi Gigaba’s instructions locally as well as abroad to try and reject any application for a work-related visa, the number of normal appeals – together with overstay appeals have not been attended to in almost one calendar year! The appeals are currently hindering investments and preventing the job creation through foreign subcontractors, but are partly also violating the Constitution as those with a family and a constitutional right to stay are not even heard as the woman in charge, Mrs. Hilda Dlamini, remains defiant and has not processed a single overstay appeal or answered a single query in months.

A specific case grabs one’s attention as an Austrian engineer, who worked for decades in South Africa and is currently key in a US$ 6bn investment into SAPPI and MONDI had been declared undesirable due to a fault of Home Affairs and is awaiting for his appeal being heard outside the country for almost a year, preventing any South African sub-contracts to be concluded and therefore delaying hundreds of new jobs from being created. But the best in this case: he is married to a South African and has a constitutional right to reside with his wife, a fact that Home Affairs flat-out ignores as “it stands above the constitution”.

Nobody at the Department of Home Affairs – even those in favour of actually working and granting visas to foreign workers and investors – is currently willing to risk their job by making any decision, as the new Minister Aaron Motsoaledi apparently only attends office once a week and whoever comes with criticism or a case that has been unduly neglected gets the boot, meanin g he or she gets fired or demoted.

FOREIGN AFFAIRS: Boycotting Embassies

The former Department of Foreign Affairs, now DIRCO, has the oversight over the South African embassies and consulates abroad. These are the first port of call for all first visa applications nd therefore crucial for the immigration of foreign skills and investors.

But going back to the times where Malusi Gigaba held the reigns over Home Affairs, the basic policy was dictated – with or without the knowledge or approval of DIRCO – to try and reject as many visa applications as possible. This led in some embassies to today’s practice to make up and re-invent checklists for visa, which are not in tune with the Act or its Regulations.

The main culprits, which currently are preventing almost any serious investor or skilled foreigner to successfully apply for work or business visa are the ambassadors in Berlin and Vienna as well as the Consul General in Munich. The recent history shows a frightening stretch of rejected visa applications of potential investors, which were measured against fabricated checklists with new prerequisites introduced by the embassies far outside legislation. On top of it the South African embassy in Berlin and the Consulate in Munich try to deter applicants by irregular opening hours or days on which you cannot submit visa applications (currently Wednesday of all days).

Are you surprised? Maybe not anymore knowing that the ambassador in Berlin is Phumelele Stone Sizani, qualified for this sensitive position by his degree in Art (sic!) but formerly the Chief Whip of the ANC. The Plot thickens, but there is hope that this year sees the end of his horror rein over the embassy as the fourth year should be his last year. His counterpart in Vienna, which is also responsible for Slovakian and Slovenian applicants, is Rapulane Sydney Molekane, former NEC member of the UDF and ANC Youth League, the same place which nourished Julius Malema before he started the EFF.

EDUCATION: Matric Pass Rate 2019

While controversial former ANC Women’s League President and Basic Education Minister, Matsie Angelina Motshekga, and the Department of Education are celebrating an all-time high matric pass rate of 81.3%, the Democratic Alliance revealed that the real pass rate is in fact 38.9%: In 2017, a total of 1 052 080 learners were enrolled in grade 10, yet only 409 906 learners eventually passed matric last year. This means only 38.9% of grade 10 learners actually wrote and passed matric. This is for the most part due to an extraordinarily high drop-out rate, which means that hundreds of thousands of learners are denied the chance to write matric, let alone pass it, which is a clear indication of a dismally failing system, not a functional and successful one.

“For years now the department of basic education has punted the national pass rate because it shifts the focus from their perpetual failures as an ANC government” the DA further commented and summarised: “The slow poison of drop-out rates between grades 10 and 12 is eating away at the future of the youth of this country!”

Here it must also be repeated that the Level of Pass Rates to be reached for passing Matric has been lowered again and again and that currently a pupil must obtain only 40% in his or her home language, 40% in two other subjects, only 30% for four other subjects and must pass at least 6 out of 7 subjects. This means that you pass with an average of just over 30%: A TOTAL JOKE! What is the Minister celebrating? Did she actually pass matric? We have to doubt that, seriously but when looking at her being in office since 2009 (the birth of this Department) and that she is a member of the NEC of the ANC, then we all know why she is still here to continue her reign of incompetence. Nepotism at its worst on the account of our children.

Finally: There are 18 schools which failed to chalk-up any successful exam outcomes – that’s six more with a 0%-score than registered in 2018!

ENERGY: Load Shedding and ESKOM

Nothing feels more real, nothing affects residents and resident businesses more than the load shedding. Right through to Stage 6 the country is paralysed, even crippled and the medium to long-term consequences are dire, not that the Minister of Corporate Greed, ruling now mines and energy, omnipotent ANC NEC member and “top graft honcho” Gwede Mantashe would care! Unscathed and unindicted for in his involvement in a class A sex scandal involving young students, he stands tall and laughs justice and the South African public into their faces: LOOK, I AM UNTOUCHABLE!

So why exactly are we where we are? What happened to ESKOM and the formerly lowest electricity price in Africa? Until the early Nineties the price for electricity was below 0.10 R/kWh while today the tariff averages just under 1.10 R/kWh – exactly one Rand or 1 000% more than when the ANC took over. But let’s not dwell in idle speculation or historic events, let’s talk about today. Why do we have load shedding today? The answer is as simple as it is diverse and coincides with the countless lies served by ESKOM:

“Coal Shortage”
Eskom ran out of coal because former CEO Brian Dames wanted to procure coal without tenders and former FCO Bongani Nqwababa said no. On top of it, South Africa was selling top quality coal to countries like Germany, while trying to procure cheaper coal from Asia and to pocket the price difference. Well, that obviously back-fired.

“Wet Coal”
Didn’t it rain in South Africa prior to the beginning of load shedding in 2008? It sure did! But also prior to 2008 the quality of the coal stored was of a different, higher quality. For more than three years Eskom’s top coal scientist, the late Mark van der Riet, fought to set a coal quality standard, but Gupta-inspired Eskom boycotted those efforts until his heart gave up. Sub-quality coal is very well susceptible to water, but that fact is just a consequence of the above coal shortage as without cheap coal no trade profit could wander into the private pockets of the Eskom Board.

“Load Losses due to incessant Rain”
Those power stations that are affected had been exposed to similar and even worse weather conditions in the past, but the lack of maintaining water proofing and flooding prevention between 2010 and 2014 has now made those station susceptible to heavy rains and flooding.

“Unforeseen Maintenance”
Maintenance is done based on schedules finalised in advance. There are no unforeseen maintenance issues, but ESKOM had not completed major maintenance works in the past due to a stop in maintenance ordered by former CEO Brian Dames between 2010 and 2014 and has now to scramble for work unfinished. Neglected or postponed by Dames.

“Medupi and Kusile unfinished”
The reason for it lies simply in the fact that instead of ordering Power Stations “turn-key”, ESKOM management wanted ESKOM to be the Project Manager, so that kick-backs and commissions could be negotiated with each supplier for the benefit of those in Management and behind ESKOM. Those kick-backs and the non-existing knowledge of how to project manage such a technology also led to the exorbitant extra costs to build the plants.

“A Sign of Growth”
Saving the best for last: Deputy President David Mabuza had the audacity to step in front of cameras and explained that “energy shortage and load shedding are a sign of economic growth!” REALLY? Why is this man still in office as he must be one of those who did not even meet the 30% pass-rate for matric candidates, or is he THAT arrogant that he thinks he could feed any justification to the public as we are so stupid and believe whatever he dishes up?

The list of lies goes on and on, but what really shows the irresponsible behaviour among the Board Members, the Senior and the Executive Management of Eskom is the fact that although some of the reasons for load shedding above became more and more possible, they continued to line their pockets by continuing to sell good quality coal and continued to sell and export electricity across border even WHILE load shedding was immanent and the problems continued to pile up.

ESKOM has 47 658 employees and generates an annual loss in excess of ZAR 20bn with having reached the ZAR 500bn debt threshold this year. At less than ZAR 180bn annual turnover this makes ESKOM technically bankrupt. But if you really want to have a good laugh – or maybe rather a long cry – then know this:

Eskom wants taxpayers to cough up a further ZAR 1.8 bn for performance (sic!) bonuses, despite the power utility’s well-documented inability to keep the lights on. And this after ESKOM paid bonuses of ZAR 4.2bn in 2017! If these bonuses were distributed equally among all ESKOM employees, each would have received about ZAR 88 000.

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