Today's Labour News

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ancSunday Times Business Times writes that the ANC's economic policy guru has reiterated the party's desire for the government to raid private and public pension funds to raise money to rescue ailing state-owned enterprises (SOEs) and meet its financial obligations.  

Enoch Godongwana, head of the party's economic transformation subcommittee, noted in an interview last week that the asset management industry, which included pension funds, insurers and other investors, was sitting on R6-trillion under management and should lend some of this to the state.  In his view, this was a better option than approaching the International Monetary Fund (IMF) or World Bank for a bailout.  Godongwana pointed out that while the ANC investigation into prescribed assets was ongoing, his wish for government to raise money from pension funds was not a pronouncement on the prescription of assets through legal means.  "Borrowing from domestic markets is not prescribed assets, that is a separate investigation," he stated.  Zingiswa Losi, president of labour federation Cosatu, commented:  "If government is going that route it will be better than us going to the IMF, which would mean our sovereignty as a country is also at risk.  What we want to see is assurances that the money is going to be used for its intended purposes and not corruption, and there will be guaranteed returns."  Asset managers are opposed to asset prescription, which would compel entities such as pension funds to invest a portion of their savings in SOEs and government bonds.  Reserve Bank governor Lesetja Kganyago said in an informal briefing last week that SA "is not there yet" in terms of requiring IMF aid.

  • Read the full original of the above report by Caiphus Kgosana and Asha Speckman at BusinessLive (paywall access only)

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