OPINIONISTA: The constitutional challenges facing the prescription of assets

Somewhat vaguely, the President has confirmed that government is considering the “prescription of assets” as a way of raising funds to keep underperforming or technically insolvent state-owned enterprises funded.

The difference is that during apartheid SA was a parliamentary sovereignty, but now we are a constitutional state in which the provisions of the constitution and the rule of law are supreme. In turn, Section 7 of the Bill of Rights requires the state to respect, protect, promote and fulfil all of the rights in the Bill of Rights. One of these rights is the right to property. A pension is undeniably property. Under Section 25:No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property.”

Except as provided in subsection or in any other provision of the Constitution, no law may limit any right entrenched in the Bill of Rights.” The importance of the purpose of the limitation on the rights to pensions is that the state needs to raise funds to keep failing SOEs afloat. Vanity projects such as SAA are not a worthy cause; other avenues, such as the unbundling or privatisation of Eskom, Prasa, Denel and others are available to the government; only hidebound and outdated ideology is preventing the alternative cures from being implemented. These are not good reasons for the introduction of prescribed assets.

There are many less restrictive means of achieving the funding of failing SOEs, such as selling them off, closing them down and unbundling them with a limited sell-off of a percentage of those SOEs which seem to stand a chance of survival. More importantly, the failure of SOEs is attributable to their mismanagement and to the looting of their assets during the heyday of state capture in SA.

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