'Land reform legitimate but not expropriation'
Coovadia said the banking sector supported a 51%-49% arrangement between farm workers (subsidised by the government) and farm owners on new farms adjacent to existing farms. On this basis, the sector was ready to commit about R15bn over the next few years.
This proposal was made some time ago to the government and the industry wants it put back on the table.
Land could no longer serve as collateral for loans
Coovadia said the banking sector was hopeful that the election of President Cyril Ramaphosa would open the door to negotiations on land expropriation, social grants and debt relief in the same way that it had led to the renegotiation of the contentious Mining Charter with the mining industry. Expropriation without compensation would erode property rights and would mean that land could no longer serve as collateral for loans, said Coovadia.
There was also the danger of international disinvestment and the risk of losing benefits from initiatives such as the African Growth and Opportunity Act, which was adopted by the US Congress to give free access for certain products to the US market to exporters from Africa.
Coovadia reiterated Basa's opposition to a proposed amendment to the National Credit Act that would provide debt relief to the overindebted. The measure has been proposed by Parliament's trade and industry portfolio committee, which has been conducting public hearings on the proposed amendments.
Basa was opposed to a legislated approach as banks had measures to provide debt relief. "Basa proposes the introduction of a subsidy, which can be used to cover the cost of using existing debt-review measures," he said.
Debt-counselling costs between R3,500 and R5,000.
"Appropriate debt intervention measures should rehabilitate, educate and reintroduce consumers into the credit market," said Coovadia.
Source: Business Day