The Oppenheimer family’s Brenthurst Initiative got a thumbs-down from some delegates at a debate on the plan on Monday as the proposal is seen unlikely to allow more of South Africa’s population to become economically active.
The Brenthurst Initiative seeks tax breaks as an incentive for empowerment and also calls for a balance between economic growth and transformation.
South African President Thabo Mbeki has welcomed the proposal as he sees it stimulating discussion and debate on the subject of transformation.
“I don’t agree with the tax incentives contained in the Brenthurst Initiative. The quantum of the tax incentives are too large,” said past president of the Black Management Forum Bheki Sibiya on Monday.
“Transformation is the biggest challenge for business leadership in South Africa,” he added.
The Oppenheimer family argues that for South Africa to cut unemployment and drive transformation there needs to be strong growth.
“South Africa must both grow and transform. A failure to transform is clearly unacceptable, but slow growth will reduce severely our capacity to transform,” the Brenthurst Initiative document says.
“Under apartheid black people were oppressed while white people accumulated wealth, do we need to again pay for the apartheid sins (with tax breaks)? The Brenthurst Initiative is logical but emotionally unintelligent,” Sibiya added.
He warned that South Africa will experience a repeat the disastrous situation in Zimbabwe if transformation failed in South Africa.
“Transformation is key to the South African economy and if it isn’t done South Africa is likely to default to anarchy,” said Ernest Oppenheimer & Sons representative Jonathan Oppenheimer.
The Oppenheimer family has a 45% in the world’s largest diamond miner De Beers.
“Transformation that results in declining gross domestic product per capita will result in anarchy. There needs to be transformation and growth,” he added.
Big business in South Africa needs an incentive to embrace empowerment, as the process is costly, Oppenheimer said.
There was also a difference of opinion at the debate regarding what transformation is, with Sibiya referring to the Oxford dictionary, which defines transformation as to “make a thorough or dramatic change in form, outward appearance or character”.
On the other hand, Oppenheimer said transformation would see industry changing with the process less dramatically and focusing on employment equity, change in ownership, skills development and corporate social investment.
However, some delegates echoed Oppenheimer’s sentiments, saying that transformation should not focus on the colour of the skin of the country’s business elite.
“To prevent anarchy, there must be a focus on education and training. South Africa’s education system needs to be fixed so as to drive economic growth,” a delegate said.
South African Reserve Bank deputy governor Gill Marcus said that South Africa’s lack of skills was an inhibitor to the country’s growth.
One of the key downfalls of the Brenthurst Initiative was the lack of focus on women, she added.
The Brenthurst Initiative and South Africa’s business elite was also criticised for a lack of patriotism.
“This is a group of robber barons, which list elsewhere, and don’t see South Africa as a country to invest in,” one delegate said.
The Brenthurst Initiative was also seen decreasing the South African government’s tax base.
The Brenthurst Initiative was also criticised for being too limited, a criticism which Oppenheimer acknowledged was valid. – I-Net Bridge