Did the minister?

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!!!

Comments

[Desmond Makiti]

But then again who exactly are the black business class. The general argument about the economy not moving in the correct direction, not creating the necessary employment growth is that the micro and macro economic policies of SA inhibit the development and growhth of small-medium business, in other words there is a very small SMME business enviroment, let alone a black business class. If this runs correct these votes of black business that are mentioned, are they sufficiently enough to change or influence the course of direction within the ANC. As always said that business within the ANC is about patronage, not preference over other white business's. So if whatever black business within the ANC is not to be advantaged a lot more than they are now, purely being a card carry member or one of Zuma's nephews, how is this black business friendly attitude for the votes. Is there even enough black business? If the BMF and BBC together could not change the course of Transet and PRASA capital expenditure project and how procurement is completed, even after much attempt and fanfare (Zungu being head of the latter), how is black business able to single handely shape the Codes to such an extent as alluded by your reader. Yes these Codes are black business friendly, I thought BBBEE in one its objective is black people and business friendly. The ANC have a bigger problem at the moment than the general elections of 2014 and that is Mangaung. If the politics of the ANC are appreciated you will know this, towards an elective conference governement stops thinking beyond the conference because you just might not be around after the conference. Hint: Look how much is going on in the country and yet all that concerns the ANC is the nomination lists. In the NW there has been 8 other deaths related to the Mine strikes, the economy is potentially being hit hard by the strikes in the transport and potentially the rail and port. The Codes yes have question marks, grey areas, they could do with more assessment and analysis of the achievements to date, but also an imperfect situation at times requires change. Purely as there is section 9 in the Constitution and Section 2 of the BOR right, there will always be a requirement for redress, questions is how? For now its BBBEE.

[Richard Ferrer]

I think that the most important question to ask is this: "Is the Minister and his advisers intelligent on business and BEE matters or are they stupid?" If the former then there is probably a longer term strategy to move BEE codes from voluntary to complusary. If the latter then take shelter in prayer, emigration or something else from which to gain your happiness.