Incentives could give factories relief

There is a need “to talk the economy up” while the high exchange rate remains a challenge, according to the Department of Trade and Industry (dti).

The government must also send “appropriate signals” like new tax incentives to bolster greenfield industrial investments in the current difficult economic environment, director-general Tshediso Matona told the trade and industry portfolio committee yesterday.

The government on Monday announced the tax incentives in the context of what Matona described as “the greatest challenge” to the economy at present – the high rand exchange rate which, he said, was facing “a short-term crisis”.

He told MPs the incentives were needed to promote and support manufacturing.

He said that the department had held talks with manufacturers last week and they were unanimous in the view that the exchange rate was a key challenge to the sustainability of their businesses.

Trade and Industry Minister Rob Davies announced that investors in greenfield projects – new projects that use manufacturing assets with a capital investment of R200 million up to R1.6 billion – would be able to apply for a tax allowance of between 35 percent and 55 percent of the project’s value.

The incentive, which will also apply to brownfield projects where there are expansions and upgrades, will run until December 2015.

Business Unity SA economist Simi Siwisa welcomed the tax incentive. She said it built on industrial policy action plan objectives and could “further stimulate” domestic manufacturing sectors. “Indeed it is supportive of a new growth path,” she said.

Asked if the department had the capacity to carry out the programme, Siwisa said business would be meeting with the department next week to find out how to assist it in implementing the programme.

“This will require a partnership between dti and business in general.” Siwisa added that the tax incentives to spur industrial development had to be supported by “non-direct” measures, including beefing up transport infrastructure.

Responding to concerns from DA trade and industry spokesman Tim Harris, Davies acknowledged that there were certain incentives where uptake had been slow. However, the motor industry incentive programme had worked well, largely, Harris believed, because it has been carefully planned with the industry.

Investec investment strategist Brian Kantor said he was “all for low business taxes… investment allowances are one way to do that”. Kantor added that whether it would work would depend on how it was implemented.

ANC MP Joan Fubbs, the committee chairwoman, said it was important the currency issue be resolved at this week’s Group of 20 meeting in Seoul.

Nedbank group economist Dennis Dykes said the green economy was something the government was looking “to bolster” through tax incentives and possibly even subsidies. - Donwald Pressly(Business Report)

R5 billion skills fund untapped

The bloated National Skills Fund, which is meant to be one of the main drivers of the training lay-off scheme to ameliorate the impact of the recession at affected companies, has hardly been touched, according to the Department of Higher Education.

Announcing the scrapping of three sector education and training authorities (Setas) that were not financially sustainable, Higher Education Minister Blade Nzimande yesterday referred questions to his deputy director-general Percy Moleke. Moleke said about R1 billion of the fund – which now stands at about R5bn – had been earmarked for the amelioration effort.

Nzimande said a further R1bn had also been earmarked by the Unemployment Insurance Fund for this purpose

The money has accumulated since 2005 in the skills fund.

It was key that the skills fund was “not treated like an ATM” and that its resources were directed properly at raising skills levels, Moleke said. It was particularly important that money flowed for the training of engineers, where the numbers of graduates were lagging.

When Nzimande was asked whether the investment of public money by the transport education training authority (Teta) – one of the 20 Setas to survive the shake-up – would be prevented in the future, he appeared not to know about the investments made in J Arthur Brown’s failed firm Fidentia Asset Management.

But Moleke said the matter was still before the courts and the department could not comment further at this stage.

The case against Brown and others will be held in January in the Western Cape High Court. Teta originally invested R250 million in Fidentia.

Nzimande then commented that it would “not be business as usual” for the Setas – which are meant to drive the country’s learnership programmes in various sectors. He pledged that his ministry would be working closely with the Setas “to ensure that there is minimal wastage or no wastage at all in terms of these funds”.

The minister also said that it was important to co-ordinate the work – and have in-depth access to the skills database – by co-ordinating the information technology systems for the universities, further education and training colleges and Setas.

Meanwhile, Nzimande said it would be incorrect to say that the Setas had generally failed. “What everyone accepts (is that) there has been unevenness overall… we could have made a much better impact.”

He pledged that a ministerial task team would be looking at co-ordinating the work of the Setas. In “a couple of months” they would be able to tell his ministry “how better to align and improve the capacity of the Setas to respond to the challenge of skills development”.

The minister announced that from April next year to March 2016, 12 Setas would continue without change. Six Setas would be re-established with minor changes to their mandates, while two would receive sub-sectors from other Setas and three would be abolished.

The clothing, textile, footwear and leather Seta, the media, advertising, publishing, printing and packaging Seta and the forestry industries Seta would be abolished. - Donwald Pressly(Business Report)

Redplan vir maatskappye misluk

Die regering se reddingsplan om maatskappye in die resessie te help, het misluk.

Dié plan het onder meer die heropleiding van werkers behels om afleggings te voorkom.

Uit verskeie voorleggings gister in die parlement is dit duidelik dat burokratiese rompslomp die plan gekelder het.

Net ’n deel van die beskikbare R8,5 miljard van die reddingspakket wat in Augustus verlede jaar deur pres. Jacob Zuma aangekondig is, is benut.

Hiervan sou R6,1 miljard se hulp na ondernemings gaan wat kwaai deur die resessie getref is en R2,4 miljard aan die heropleiding van werkers.

Besigheidseenheid Suid-Afrika (Busa) het gister die siening van die Nywerheidsontwikkelingskorporasie (NOK) beaam dat die regering se resessie-hulpplan geen verskil gemaak nie.

Me. Bev Jack, Busa se verteenwoordiger vir behoorlike werk, het aan die portefeuljekomitee vir arbeid gesê sy is teleurgesteld dat die opleidingskema “nie geslaag het nie”.

Teen die tyd dat die skema in (September 2009) in werking getree het, was meer as 750 000 poste reeds verlore. Dié werkers kon nie ingesluit word by die opleidingsprojek nie omdat hulle reeds die maatskappye verlaat het, het sy gesê.

Vroeër vanjaar is net sowat R10 miljoen van die geld vir die opleidingsprojek benut. Die reddingsfonds moet voor April 2011 al die geld toeken.

Afgevaardigdes van die NOK het onlangs in die parlement gesê slegs R1,4 miljard van die beskikbare R6,1 miljard wat aan die NOK toegewys is, is benut om maatskappye te help wat weens die resessie op die punt was om ten gronde te gaan. Dit is omdat die sakesektore nie geweet het hoe om die geld betyds te benut nie.

By die bekendstelling van die fonds het mnr. Ebrahim Patel, minister van ekonomiese ontwikkeling, gesê: “Die behoefte sal altyd groter wees as die geld wat ons beskikbaar het.” Destyds is gesê aansoeke van 47 maatskappye ter waarde van R1,1 miljard is reeds ontvang en meer as 20 aansoeke om hulp ter waarde van R2,6 miljard word oorweeg.

Klem is gelê op hulp aan die motorbedryf en ’n reddingsplan vir die klere-en-tekstielbedryf. Dié bedrag moes verhoog word met geld uit die sektorale opleidingsowerhede (setas), want hulle is gevra om bykomende geld vir dié opleidingsprogramme opsy te sit.

Dr. Blade Nzimande, minister van hoër onderwys, het gister gesê dié seta-geld is amper glad nie benut nie. Die geld uit die nasionale opleidingsfonds moes die heropleidingsprojek aanvul.

Die nasionale opleidingsfonds staan nou op ’n onbe­nutte R5 miljard waarvan R1 miljard vir die heropleidingsprojek bedoel was.

Volgens mnr. Kaizer Thibedi, projekbestuurder by die Kommissie vir Versoening, Bemiddeling en Arbitrasie (KVBA), het die administrateurs van die heropleidingsprojek 9 444 gevalle by 66 maatskappye tot op hede verwerk.

Dit sluit sake in wat nie suksesvol was nie asook sake wat onttrek is.

Tot Maart vanjaar het minstens 2 700 maatskappye om hulp aansoek gedoen. 

Bron: Sake24

Companies Act inaccuracies cleaned up

Cape Town – The companies amendment bill was tabled in Parliament on Tuesday and is aimed at tidying up the slack wording and inaccuracies in the original Companies Act which was first passed in 2008 and assented to by the president in 2009.
 
A memorandum attached to the bill explained the need for it and said that during consultations on regulations, it became apparent that there were sections containing technical errors, incorrect referencing, omissions and grammatical errors.

"Furthermore, it became apparent that some of the regulations would be ultra vires for lack of empowering provisions in the act empowering the minister to issue them," the memorandum said. 
"As a result … some of the policies and principles of the act are adversely affected," it said.

"In addition, some of the policies are expressed in language that creates undesirable doubt about the intent, and an equally undesirable degree of uncertainty as to their meaning and effect. Considering the nature of the errors, it is probable that in its
present form, the Companies Act, 2008, will result in doubt and uncertainty that could lead to litigation."
The bill says that the uncertainty, and the cost of resolving it through costly legal disputes, may act as a drag on the economy which would have been "fundamentally inimical to the goals of the act itself."

The amendment bill now hopes to provide a proper statutory foundation for the regulations that will be needed to administer and enforce the act.
Amendments are inserted to address uncertainty resulting from lacunae in the act, none of which can properly be resolved by the regulations.
Technical deficiencies are tackled to remove inconsistencies and disharmony among provisions of the act itself and to avoid  conflicts with other legislation or regulations and to remove ambiguities as to how certain provisions were to be applied to give full effect to the policy of the act.

According to the memorandum the proposals contained in the amendment bill aimed at rectifying errors in the principal Act, should be seen against the magnitude and nature of the new act.
"The Act embodies a comprehensive and modernised legal regime providing for the incorporation, registration, organisation and management of juristic persons," the memorandum said.

"It is in nature and extent one of the most extensive laws to be passed by our democratic Parliament, covering almost 400 pages."

Source: INet Bridge

Minister concerned about lack of skills among the youth

The Minister said that nearly two million young people have not completed their secondary school training, making them unfit for employment.

This is of course a huge problem for business as increasingly more job entrants have to be trained on the job, making our uncompetitive industry even more so.

However, the Minister intends fixing the problem with assistance from some of his colleagues

You can read all about it here