Debt control: A political hot potato
The upcoming elections may be driving the rush for amnesty and reform to the garnishee system. Political pressure ahead of the national elections is seen as a motivating force for the sudden flurry of activity by the government around credit practices, including reforming the garnishee system that allows creditors to deduct money from employees’ salaries. A presentation this week by the Gauteng finance department to its provincial finance portfolio committee showed that government employees in the province have, on average, six garnishee orders.
This is exacerbated by moves to fast-track a credit amnesty, which will allow for the removal of black-listed offenders as soon as their debts are paid. This is opposed by banks, which say it will be harder to run credit checks without the blacklist.
The fast-track is being seen by banks as a politically expedient move ahead of elections next year. The treasury remains opposed to the garnishee system, which it sees as deeply flawed.
It would prefer to scrap the system, not reform it. In the garnishee steering committee, set up under the auspices of the department of trade and industry, allegations of betrayals and attempts at behind-the-scene negotiations between organisations and government departments have led to bitterness among certain members.
One of the actions that caused deep unhappiness among task team members was the sudden decision by the Banking Association of South Africa (Basa) and the treasury to call a press conference in November to announce that the banks had committed “to no longer use garnishee orders against credit defaulters, as they [the banks] believe the use of such orders for credit is inappropriate”.... Read the full, comprehensive news article and discuss at The Teacher/Daily Mail & Guardian