Parly committee removes controversial clause in National Credit Amendment Bill
The bill aims to help over-indebted poor people who don’t have the same options as wealthier debtors in distress.
CAPE TOWN - Parliament’s Trade and Industry Committee has removed a controversial clause from the National Credit Amendment Bill it is working on, that would have given the minister, Rob Davies, broad powers to introduce debt-relief measures in the wake of economic shocks or natural disasters.
The bill aims to help over-indebted poor people who don’t have the same options as wealthier debtors in distress, such as debt administration or sequestration.
It proposes a range of options for those who take home up to R7,500 a month and owe R50,000 or less, including the scrapping of their debt.
The controversial clause would have allowed Trade and Industry Minister Davies to declare debt-relief measures in the face of massive job losses caused by a crisis in the local economy, including strikes, political unrest or natural disasters.
Those opposed to it [bill] included the banking sector and Treasury, but the death-knell was sounded in a legal opinion by senior advocate Wim Trengove, who warned that giving the minister such wide and unfettered powers would be unconstitutional.
On Wednesday, all parties agreed to delete the offending clause, with African National Congress MPs ready to concede in order to prevent any future Constitutional Court challenge.
The committee will resume work on the bill later in August and hopes to finalise it by 16 August.
(Edited by Zamangwane Shange)