Hon House Chairperson, I think that we should perhaps take no one's approach and give a clear context of what this debate is all about. However, the size of retirement funds in South Africa is about R4,2 trillion, and about R1,8 trillion of that belongs to the Government Employees Pension Fund. The manner in which retirement funds are managed is through asset management companies. The biggest asset management company is a state-owned Public Investment Corporation, PIC. It is 100% owned by the state and it is the biggest asset manager in the continent. However, also, it is the best performing asset manager in the entire continent even compared to the privately- owned asset managers. It does better than Sanlam, Old Mutual, Coronation and Allan Gray asset management companies.
Therefore, you have got a state-owned asset management company that is performing far much better than the privately-owned asset management companies - and already the PIC is exposed to both government and parastatal bonds. I don't know what are we
debating if all of us know now that the PIC is exposed to government bonds, it invests in developmental projects. It has got private equity investments that it makes. Actually, the biggest danger of the PIC's investments is in the listed states with a recent loss of more than R20 billion through investments and Steinhoff.
I think that this is a nondebate really in terms of what the DA is portraying the issue and raising false alarms to cause panic. Now, the ANC says in its election manifesto that you are going to investigate the introduction of prescribed assets, but you do that in a broad and not clearly comprehensive developmental strategy and agenda. It becomes problematic when you just say that you want to investigate the introduction of prescribed assets without clearly defining under which developmental mandate and strategy do you want to introduce or investigate prescribed assets, because it must be located within the development agenda. What do you seek to achieve and when and how do you want to achieve that because the nonsensical proposal that is being brought by the Minister of Finance cannot fit
squarely into this prescribed asset agenda that it's mentioned in your own manifesto.
It is correct that for 33 years the apartheid government had prescribed assets, from 1956 to 1989, meaning that apartheid was anchored financially by pension funds. It was utilised to guarantee the jobs and the happiness of the white minority. So, there is absolutely nothing wrong that even if it properly located within a proper developmental programme, we should have prescribed assets in South Africa, but the approach would be nuance. I want to explain what should be done in terms of all of those issues.
One is that we need to consolidate all municipal pension funds. The 230 odd municipalities in South Africa have got different pension funds, majority of that managed by private pension fund managers. Therefore, those must be consolidated into one pension fund. We must then have a municipal employee's pension fund and then give an asset manager to then deal with the developmental investments of that pension fund which will have been consolidated - and, of course, deliberately focusing on
municipal infrastructure and other developmental impactful investments that must be looked into.
We should set a target - which we say in the EFF election manifesto - that must be 30% of all the pension funds must be invested in the productive job creating labour absorptive sectors of the economy and deliberately in private equity, because playing with the money of pension funds just in the stock markets without the job returns is wasteful. It is just bloating the stock exchange to more than 15 trillion market capitalisation, but there are no jobs out of that.
Therefore, we need to give a different direction in terms of what should happen. The nuance is that, the already existing PIC or the Government Employees Pension Fund, GEPF, exposure to government bonds should be converted into equity. We should introduce a new model of state ownership of these state-owned companies - meaning that you must have, of course, parts of government through the Ministry of Public Enterprises or other entities owning a portion. However, the PIC or the GEPF should own equity in state-owned companies such as Eskom and Transnet.
We then have a different approach to how we deal with these issues, but really there is no debate that is worthy of the sensationalism that the DA is introducing now, because already regulation 28 in the pension fund is already regulating the manner in which pension funds must be invested in which asset classes do we put these investments. Therefore, there is no debate that is even calling for the participation or the anger of workers as is being portrayed. It is just scarecrow which is fundamentally based on the racist distrust of a black management of common resources that must be managed. Thank you very much. [Time expired.] [Applause.]