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Umsebenzi Online

Volume 6, No. 9, 16 May 2007

In this Issue:

Red Alert

Amnesty from the Credit Bureaux: Let us not allow what we have won on the ground, to be lost on the table!

Blade Nzimande, General Secretary

The new National Credit Act and its regulations come into effect on 1 June 2007. This is a very crucial piece of legislation and an important development in our struggles to transform the credit regime in our country to serve our developmental agenda. The SACP, together with the Financial Sector Campaign Coalition (FSCC) it leads, can proudly claim this legislation as its victory. When we launched our 2000 Red October Campaign on the transformation of financial sector campaign way back in 2000, we had amongst other things demanded the creation of a new credit dispensation, including the regulation of the faceless credit bureaux, and called for lowering and regulation of credit interest rates charged by credit grantors, including omashonisa, especially to workers and the poor. Our campaign also called for universal access to affordable banking for all our people.

As our campaign unfolded through intense mobilization and close interaction with our people on the ground, we later demanded a once-off credit amnesty for all the millions of our people blacklisted by the credit bureaux; and a new model to finance mortgage bonds for low-cost housing.

Progress on all these fronts has however been uneven. It is indeed now well-known that we have won some important victories towards universal access to banking through the launch of the Umzansi account. There is now new legislation on co-operatives. We are indeed concerned that legislation on co-operative banks has been very slow in coming, despite promise by government to expedite this legislation over the last five years.

Credit amnesty: Important gains, but not nearly enough

The SACP welcomes the granting of amnesty to certain categories of our people blacklisted by the credit bureaux, including those with debt of up to R500-00. This is another important victory in our campaign for the transformation of the credit regime in our country. This further underlines the importance of mass mobilization and continuous campaigning by the SACP and its allied mass formations.

The categories of information that will be removed by 1 June 2007 from the Credit Bureaux, according to the Credit Information Ombud, include the following:

  • Adverse credit information listed on the credit bureaux by 1 September 2006, on debt of less than R500
  • Accounts that have not been paid for a period longer than 24 months by 1 September 2006, and the credit grantor had not handed the account to attorneys for collection or take a judgment

In addition, ‘judgment information which credit bureaux receive from the courts will be removed from the credit bureaux in the following circumstances’:

  • All judgment information in respect of a debt of up to R500 which was listed on the credit bureaux by 1 September 2006, unless the consumer has more than two unpaid judgments of this amount on his/her credit record
  • In respect of a debt of up to R5000, if the judgment is older than 18 months by 1 September 2006, unless the consumer has more than two unpaid judgments
  • In respect of debt of up to R50 000, if the full amount was paid in full by 1st September 2006
  • Debt of up to R50 000 reflecting on the credit record on 1st September 2006, if the full amount is paid by September 2007

These are indeed important advances and achievements for the SACP-led financial sector campaign!

However there are a number of problems, despite these welcome developments. To us as the SACP it is not clear what percentage of blacklisted people will benefit from this. It is estimated that the number of people blacklisted by the credit bureaux for amounts less than R500 constitute only 37% of the total number of the blacklisted. This is definitely inadequate, as it still leaves millions of people blacklisted, and therefore unable to start their economic lives anew. It is for this reason that the FSCC is calling for the threshold to be raised to at least R1000, as this would at least benefit about 57% of all those who are blacklisted.

The SACP is also still concerned that the figure of those owing less than R500 was either arbitrarily arrived at or a concession to credit grantors and credit bureaux. The SACP is of the view that this decision was not informed by a careful assessment of the full developmental implications of blacklisting in our country. The SACP is very worried that in all its engagements on this matter, government has been more influenced by the faceless credit bureuax and capitalist credit grantors, rather than a serious consideration of the negative implications of blacklisting even on government’s own poverty alleviation programmes. We might as well lost a golden opportunity and a historic moment to tackle this matter, and the SACP is convinced that this will come back to haunt us.

We are also concerned that the cut-off date of 1 September 2006, does not address the situation of those blacklisted between then and 1 June 2007, the date on which the Act and the regulations come into effect.

All the above makes the SACP to be convinced that our call for a once-off credit amnesty for all is the only logical step to address the problem of blacklisting in our country. We will therefore intensify our campaign in this regard. However, in the meantime we call upon our people to make full use of these concessions, inadequate as they may be.

Defeat attempts to steal our victories

In typical capitalist fashion, the financial institutions are trying to steal some of the victories that we have scored in our campaign thus far. The selective granting of credit amnesty is an attempt to undermine the advances made in the National Credit Act, by carrying over into the new credit dispensation the majority of old records, many of which were compiled under conditions when there was no regulation of credit bureaux.

The banks in particular are now trying to use the fact that the new credit Act has capped interest rates on micro-lending at 21%, to raise mortgage bond rates for low cost housing to 21%. The SACP is completely opposed to this, and we will ensure that our people are mobilized to oppose this, and for the workers and the poor not to pay more than what the rich are paying. This underlines the importance of our call for the development of a completely new model to finance low-cost housing.

The new Act also makes provision for debt counselors, in order to assist those of our people who find themselves in a debt trap. Whilst this is a welcome development, we however do share the concerns of the Black Sash that debt counseling must not be used to further exploit the already indebted, and that this becomes a new method for accumulation by a few at the direct expense of the workers and the poor.

The SACP, together with allied formations in the FSCC, is committed to intensify the campaign for the transformation of the financial sector on all fronts, so that we do not lose on the table what we have already won on the ground. We need to ensure that the SACP-led FSCC participation in the Financial Sector Charter Council is not used by financial bosses to roll back our gains. The only way to ensure that this does not happen is to do what the SACP Policy Dialogue in February 2007 enjoined us to do; policy engagement always buttressed by ongoing mass activism.

During the (CODESA) negotiations in the early 1990s, we coined a phrase that ‘we cannot win on the table what we have not already won on the ground’. This was indeed correct, as it emphasized the need to combine the negotiations strategy with mass mobilization.

However, with our own experience in government since 1994, and specifically through the SACP led struggles through our annual Red October Campaign, we need to add to this phrase that, ‘we must always guard against the dangers that what has already been won on the ground, can also be reversed on the table’. This vigilance is even more important given the many corporatist institutions and practices that have been created and evolved over the last 13 years of our democracy. Hence the importance of ongoing revolutionary activism, with the working class at the head!


SACP statement on the release of Luis Posada Carriles

The SACP is extremely disappointed by the decision of the El Paso Federal Court in granting Louis Posada Carriles freedom against the background of many atrocities that he has committed.

It makes no sense how a court can arrive at a conclusion to grant bail to a man who destroyed a Cuban passenger plane in midair, with 73 athletes, students and other Cuban and foreign travellers on board, together with its dedicated crew. Furthermore it still remains to be answered how this terrorist got out of prison in Venezuela and only for him to conduct a dirty war against the people of Nicaragua, resulting in the loss of thousands of lives and the devastation of a country for decades to come. His role in Operation Condor and international terrorism directed at the people of Latin America does not deserve him any freedom as granted by the American Courts.

The release of Carriles must be condemned in the strongest possible terms. This also serves to expose the real agenda of President Bush and his administration; that their fight against terrorism is selectively being pursued to protect the interests of the US, rather than to fight terrorism wherever it happens. For Bush and his administration, it is okay to tolerate terrorist actions if directed against its enemies. For them terrorism is only bad if directed at the US.

We urge the international community, led by the United Nations and its various organs, to decisively intervene and bring Louis Posada Carriles to justice. We owe it to the people of Cuba, Venezuela, Nicaragua and indeed the world for all peace loving people to speak on one voice on such hilarious crimes against humanity.