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R100 Billion Race-based BEE Transformation Fund Rejected

Dear Editor

The Democratic Alliance (DA) strongly condemns Minister Parks Tau’s recent unilateral policy announcement regarding the creation of a R100 billion Transformation Fund to exclusively assist black businesses, which undermines Cabinet and the Government of National Unity (GNU). His approach is not only irresponsible but deeply problematic, as it completely bypasses the necessary Cabinet discussions and approvals that are required for such significant policy decisions.

The DA will not support this madness. The Minister’s plan to impose further obligations on the private sector through the BBBEE codes and force companies to contribute to this fund or face penalties is not only uncompetitive but also illegal. The government cannot create such a fund without first obtaining the explicit approval of Cabinet, especially when it effectively introduces a new tax on the private sector.

This policy is a clear violation of the principle of good governance. It is unthinkable that the Minister would announce a policy of this magnitude without ensuring the necessary legal processes are followed. The government cannot arbitrarily impose taxes or new financial obligations on businesses without proper legislative procedures.

Furthermore, the DA is deeply concerned about the risk of corruption and mismanagement that could accompany this fund, given the lack of resources and accountability within the National Empowerment Fund, which is tasked with its administration. This fund could very easily become a bottomless pit for taxpayers’ money, with little to no oversight or meaningful outcomes.

We call on Minister Tau to immediately bring this matter to Cabinet for proper discussion and approval. The DA will not support any effort that seeks to undermine the rule of law or jeopardise the competitiveness of the South African economy.

We will continue to stand for a government that operates transparently, in consultation with its partners, and within the bounds of the law. This reckless plan cannot and will not be allowed to proceed without the necessary legal framework and Cabinet approval.

Regards

Toby Chance MP
DA Spokesperson on Trade, Industry & Competition

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