Premier
With regard to the announcement by the Minister of Finance, Tito Mboweni, that the government has initiated a process to review regulation 28 to make it easier for retirement funds to increase investment in infrastructure, should their boards of trustees opt to do so:
(1) What is his government’s response to this announcement;
(2) whether his government has plans to consider the use of retirement funds to increase investment in infrastructure as opposed to taking up loans from financial institutions; if not, why not; if so, what are the relevant details;
(3) whether his government will endorse the plan when a draft is published for public comment in the Gazette; if not, why not; if so, what are the relevant details?
Provincial Treasury provided the following information:
(1) The Western Cape Government (WCG) is opposed to the amendment of the regulation, if it will prescribe to retirement funds on which kinds of assets they will have to invest. However, the WCG will support amendments that will allow greater flexibility, within limits, to retirement funds to invest directly or indirectly (government bonds) in infrastructure if the board of trustees of the pension funds are convinced that such investments will be in the interest of the its members.
(2) Finding new ways to finance infrastructure. The Western Cape Government plans to appoint suitably qualified professionals/ experts to assist Provincial Treasury in identifying, attracting, securing and retaining alternative financing for the roll-out of public sector infrastructure initiatives in the Western Cape. In this instance, ‘alternative’ refers to funding that comes from sources other than the Provincial Revenue Fund (own revenue, equitable share and conditional grants), including private-sector financing, public-private partnerships, ‘blended financing’, green financing, impact fund financing, or national funding sources such as the Budget Facility for Infrastructure and the Infrastructure Fund.
This may also include investment by pension funds / institutional investors in a provincial investment vehicle or platform, should the studies to be undertaken by WCG prove the feasibility of such an approach.
(3) It is too early to provide a conclusive answer on this question as the WCG’s position will depend on the contents of the draft version when published in the Gazette, as indicated in the response to question 1 above.
