{"id":1158,"date":"2017-03-16T12:07:29","date_gmt":"2017-03-16T10:07:29","guid":{"rendered":"http:\/\/marxistworkersparty.org.za\/?p=1158"},"modified":"2020-07-29T14:12:15","modified_gmt":"2020-07-29T12:12:15","slug":"sassa-crisis-capitalism-and-corruption-two-sides-of-the-same-bloody-coin","status":"publish","type":"post","link":"https:\/\/marxistworkersparty.net\/?p=1158","title":{"rendered":"Sassa Crisis Capitalism and Corruption: Two Sides of the Same Bloody Coin!"},"content":{"rendered":"\n

by Weizmann Hamilton<\/strong><\/p>\n\n\n\n

The contract awarded to Cash\nPaymaster Services (CPS) to distribute social welfare grants to 17 million\npeople reveals everything that is rotten in the capitalist system and the\nZuma-led ANC government. It has exposed a web of corruption connecting CPS, its\nparent, the US-owned Net1 UEPS, BEE front men, the Minister of Social\nDevelopment, Bathabile Dlamini and the presidency itself. We are not dealing\nhere with mere incompetence but a premeditated act of criminal negligence by a\nminister whose track record includes pleading guilty to misappropriating\nR245,000 in the \u201ctravelgate\u201d corruption scandal. Dlamini, with the full support\nof the Zuma faction of the ANC, aimed to create conditions that would keep\nalive an unlawful contract to be administered by a company facing corruption\ncharges both in SA and by the Department of Justice in the USA.<\/p>\n\n\n\n

For the financial year to June\n2016 alone, CPS made pre-tax profits of R1.5bn from a contract the\nConstitutional Court had ruled should be set aside. CPS had lied about its BEE\ncredentials and used willing accomplices in and outside government in fronting\n\u2014 a criminal act. But such eye-watering profits from a corruptly awarded\ncontract were not enough. CPS is now claiming that, should it have to continue\ndistributing grants when the contract expires on 31 March, 2017, the cost per\nbeneficiary would have to increase from R16.40 to between R22 and R25. That\nwill cost up to an extra R1.3bn!<\/p>\n\n\n\n

In a breath-taking example of the\ngreed that oils the machine of capitalism, CPS has exploited its position as\ngrants distributor to make available confidential personal beneficiary\ninformation to its subsidiaries to exploit and further impoverish the poorest\nof the poor. Like vultures they descend on grant recipients, with various\nproducts including funeral policies at month end.<\/p>\n\n\n\n

\u201cShareholders of Cash Paymaster\nServices, Net1 UEPS, have utilised the database of grant recipients to\ncross-sell a range of additional services to them through a network of\nsubsidiary companies. These include MoneyLine, which provides microloans,\nEasyPay Everywhere, which sells smart cards, Manje Mobile, which sells\nutilities such as airtime and electricity, and SmartLife, which offers\ninsurance. (Daily Maverick<\/em> 07\/07\/17)<\/p>\n\n\n\n

CPS and partners consciously\nexploit beneficiaries\u2019 temptation to top up the pitifully low social grants to\ncope with the pressure of the high cost of basic commodities on which the poor\nspend a far greater proportion of their income than the middle class and the\nwealthy. Writing in the Daily Maverick, Rebecca Davies tells the story of\nMaria (not her real name) \u201ca 63-year-old pensioner who receives a monthly\n\u201colder persons\u201d grant from Sassa. She uses it to pay for rates and taxes, food,\nand electricity. She receives the grant as a cash withdrawal from one of the\nCash Paymaster Services (CPS) merchants \u2013 usually Pick n Pay. In March 2014\nMaria started noticing that her grant amount was lower than usual. The problem\npersisted the next month. Her account statement revealed that 18 deductions of\nR5 each had been taken from her account for airtime in March. In April, ten\ndeductions of R10 each happened. With the help of her son-in-law she managed to\nstop the deductions taking place, but never received her money back. Maria,\nsays NGO the Black Sash, \u201cdoes not know how or why this depletion of her grant\noccurred. She did not seek out or authorise this service\u201d.<\/p>\n\n\n\n

Reacting to Black Sash\u2019s ongoing\nlegal action to stop the practices of abusing beneficiaries\u2019 private personal\ninformation Net1 CEO Serge Belamant told FIN24 that when it came\nto the case outcome, \u201cI don\u2019t really care what it means. It\u2019s not going to make\nany difference to how much money we\u2019re going to make.\u201d (Daily Maverick<\/em> 09\/03\/17)<\/p>\n\n\n\n

Taking advantage of the\nvulnerability of the poor, they deceive grant recipients, trapping them into\ntaking \u201cmicro loans\u201d offered \u201cinterest free\u201d but which cost a service fee that\nis the equivalent of interest ranging from 180% to 450% for loans from R150 to\nR1,250. Grindrod Bank shares the loot with CPS by providing bank accounts. By\naccepting a bank card, beneficiaries consent to the storing and processing of\npersonal information, their use by third party service providers, subsidiaries\nand affiliates.<\/p>\n\n\n\n

It is common to find that grant\nrecipients have never knowingly accepted any of these products let alone\nauthorized deductions from their grants to pay for them. Even if they are\nfortunate enough to stop unauthorized deductions, they never recover the money\nthat has in effect been stolen from their accounts. For the financial year to\nJune 2016, CPS\u2019s partner in this criminal enterprise, Grindrod Bank, made a\nprofit of R793m from microloans alone!<\/p>\n\n\n\n

The criminals at work here are\nnot armed robbers lying in wait at pay points to ambush old age pensioners on\nsocial grant payment days. These are men and women in suits, allegedly\nrespectable members of society, shareholders in highly profitable businesses\nwho collude with highly paid civil servants and ministers who enjoy the\nprotection of the president. Their weapons of choice are not AK 47s, but\nelectronic payment systems, social grant cards, the accounts of the poor and\nthe patronage networks that the Zuma administration has spent its entire\ntwo-terms putting in place. They include Allan Gray, Africa\u2019s biggest privately\nowned investment management company which is also the single largest\nshareholder in Net1, whose share price went up when news broke that CPS will\nlikely get a new contract. It is an outrage that CPS, having benefitted so\nhandsomely from a corrupt contract, now wants to increase its profits by up to\n36% while citing inflation which sits at 6%!<\/p>\n\n\n\n

The social grants scandal is a\nperfect illustration of why the government\u2019s neo-liberal capitalist outsourcing\npolicies are such a disaster and the private-public sector partnership concept\nis just a cover for looting. It will be difficult to find a better example of\nwhy private profit is incompatible with social need. When the ConCourt ruled\nthe contract unlawful, they also stated that CPS should not benefit from it.<\/p>\n\n\n\n

The social grants crisis is\nfurther confirmation that the ANC has been turned into a vehicle of a corrupt\nelite that will stop at nothing to enrich itself. This will hasten its decline\nand even produce a split in the not-too-distant future. Even if the calamity of\nnon-payment is avoided on 1 April, what will be burnt into the consciousness of\nthe most downtrodden in society for whom the social grant is the difference\nbetween destitution and survival, is that the ANC\u2019s dominant elite is prepared\nto profiteer out of their poverty.<\/p>\n\n\n\n

The ANC has reaffirmed that\npolitically it has forfeited any right to lead society; the same applies to the\ncapitalist economic elite the ANC is imitating and serving so slavishly. \nThe Zuma faction is not an ANC aberration; it is merely a more brazen version\nof its capitalist self.  The working class must prepare to kick out this\ncorrupt capitalist government in 2019 and take over the rulership of society.<\/p>\n\n\n\n