COSATU applauds the National Assembly's adoption of the Debt Relief Bill today
12 September 2018
COSATU welcomes the National Assembly’s passing of the Debt Relief Bill (National Credit Amendment Bill) today. This is one of the most pro-poor and pro-worker bills passed by this parliament.
It will provide badly needed debt relief to millions of over indebted and heavily exploited workers and their families. It is estimated by Treasury and the banking sector that it will provide debt relief of billions of rands.
It will allow the unemployed and persons earning R7, 500 and less per month to apply for debt relief for short term debt valued at R50, 000 and less. It targets in particular households headed by children, persons with disabilities and women. It also allows the Minister for Trade and Industry to seek relief for sectors that may have been devastated by a natural or economic disaster.
However it is critical for consumers not to misunderstand it as a green light to engage in reckless lending or financial behaviour. It will allow eligible highly indebted consumers to apply for such debt relief interventions as:
- Restructing their debt repayment schedule over 5 years or if not possible then to;
- Suspend credit payments for 12 to 24 months with regular reviews; and to
- Extinguish the debt or a percentage of the debt if after 2 years the consumer is still not able to pay the debt.
- Empowering magistrates to reduce interests charges to as low as 0%.
These interventions will only be possible once all existing consumer debt relief options have been exhausted. Consumers need to understand that once taking accepting such interventions that they will not be eligible to apply for further credit for a certain period.
COSATU also welcomes the criminalisation of illegal lending. Government must crack down on these loan sharks who have preyed upon, fleeced and exploited thousands of impoverished and desperate workers. These crooks must be shipped off to prison.
The federation urges the National Council of Provinces to urgently process and adopt this progressive bill. Parliament must not rise at the end of November without having passed this bill. The President must sign this relief into law before Christmas.
COSATU appreciates the dedicated efforts and leadership shown by the ANC MPs on the Portfolio Committee on Trade and Industry to draft this humane bill, to defend it from numerous attacks and to ensure its passage. In particular we would like to thank the Portfolio Committee’s chairperson, cde. Joan Fubbs, whip Bheki Radebe and sub-committee Convenor Adrian Williams. They have been true allies of workers and we salute them
We also welcome the constructive support offered by some banks for this bill although we note with dismay the continuous attempts by the Banking Association to collapse the bill.
Issued by Matthews Parks, Parliamentary Coordinator, COSATU, 12 September 2018