Is BEE coming to residential complexes?

The Institute of Race Relations notes comments by Minister for Human Settlements Mmamoloko Kubayi that obligatory empowerment demands for residential complexes are under consideration.

In comments widely reported since, the minister spoke at the Community Schemes Ombud Service Indaba this month about the extensive spend on services across South Africa’s 70 000 community schemes, adding: “We need to put measures in place to ensure that a procurement approach that gives opportunities to emerging black SMMEs becomes mandatory.”

This is an extraordinary suggestion. Community Schemes represent the home investments of innumerable South African households. For most, this will be the largest outlay they ever make; for many, costs associated with housing are the single largest monthly expense.

This is a significant matter for the country’s hard-pressed middle class. Not only has the country seen a marked escalation in the cost of living, but state failure has forced those who can afford it into a regime of effective double taxation as they buy privately what the public administration is not providing. This is part of the reason for the growth of community schemes in the first place.

Making empowerment criteria mandatory would be another effective tax, the equivalent of demanding that households commit an additional portion of their after-tax incomes to supporting a government policy. Think of this as imposing a triple tax obligation.

Note that BEE is not a mandatory obligation for either the public or the private sector. It is surprising that Kubayi proposes imposing it on ordinary households.

Media contact: Hermann Pretorius, IRR Head of Strategic Communications Tel: 079 875 4290 Email: hermann@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za

Sinalo Thuku, Tel: 073 932 8506 Email: sinalo@irr.org.za