Andile Ntingi comes out firing for prescribed assets, but his claim that such a regime will save rural SA must be questioned, along with the belief that the government should be entitled to the after-tax assets diligently saved by South Africans for their retirement (“Prescribed assets may save rural areas from disappearing down potholes", January 28).
Another claim that must be challenged is his notion that prescribed assets benefited white but not black South Africans in the past. When it was applied, the policy meant the pensions of ordinary people (black and white) were invested in underperforming assets. The returns (if any) were far lower than those from investments in equities, making people poorer at retirement (or meaning they had to work longer to ensure they could retire).
Evidence also shows that prescribed assets are not a necessary requirement for there to be investment in infrastructure. Companies have shown that they are prepared to invest in infrastructure projects that are well managed and can ensure a return. In SA, Cape Town is an example of a municipality that has seen private investment in infrastructure projects.
Prescribed assets will not save SA’s rural towns. What will save them (and, in time, SA itself) is real economic reform that will enable businesses to thrive, create jobs and grow wealth. The government needs to focus on making it possible for businesses to succeed by meddling less in the economy and, at the same time, reining in spending.
A policy of prescribed assets — whether to try to fix rural SA or save Eskom — will fail. The government must leave the pensions of ordinary South Africans alone and make the hard decisions that are necessary to fix this country.
Marius Roodt, Institute of Race Relations
https://www.businesslive.co.za/bd/opinion/letters/2020-01-29-letter-hard-decisions-needed/
