The Portfolio Committee on Trade and Industry continued its public hearings on the National Credit Amendment Bill, which is aimed at finding debt relief mechanisms for heavily indebted poor South Africans.
Business Unity South Africa (Busa) was represented in the public hearings and organised labour was also represented by the Congress of South African Trade Unions (Cosatu). This was the third set of public hearings held by the Committee at Parliament. During yesterday’s meeting Busa proposed that the Committee go ahead with the proposal by the South African Reserve Bank to conduct a quantitative impact study on removing debt from the poor by banks and financial institutions.
Busa also reiterated Constitutional concerns raised by other stakeholders during the public hearings, particularly with regard to debt intervention. The organisation said Busa members are of the opinion that an impact assessment and due process in terms of mitigating consequences would have addressed and answered their concerns. Busa said the Bill is open to challenge on the grounds that credit providers need not have demonstrated intent in reckless lending.
Committee Chairperson, Ms Joanmariae Fubbs, previously said a need was identified for the National Credit Act to make a provision for the introduction of capped debt intervention measures to further alleviate household over-indebtedness and prevent the widespread abuse of consumers by unscrupulous lenders. Current proposals include consumers who are earning less than R7 500 a month with minimal asset value, as these consumers were unlikely to be assisted by debt counsellors due to the cost associated with administering debt review.
The Bill aims to provide for a once-off debt intervention for qualifying consumers. It proposes that consumers will apply to the National Credit Regulator (NCR) for a debt intervention for existing, cumulative, unsecured debt of no more than R50 000.
In its presentation, Cosatu said applaud the Committee for taking the initiative with regard to the Bill and urged the Committee to attempt to have it finalised within the minimum time of not more than three months. Cosatu said a long drawn-out process should be avoided and also cautioned the Committee to keep in mind next year’s national elections which will lead to the Bill lapsing when the work of the 5th Parliament comes to an end.
Both Busa and Cosatu mentioned that a Bill that deals with labour or trade issues generally makes its way from government to Nedlac, where both organisations are represented. Because this is a Committee Bill and not a Departmental Bill, it did not go to Nedlac. The organisations wanted clarity on why the Bill did not make its way to Nedlac.
Ms Fubbs said Nedlac serves a different purpose and Parliament has its own function and therefore the process the Committee is currently following is not incorrect. She assured the presenters that the Committee is looking at the constitutional issues that were raised in the hearings.
Rajaa Azzakani
21 February 2018
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