DA opposes Property Valuation Bill

Note to editors: The following speech was delivered in Parliament today by the DA Shadow Deputy Minister of Rural Development and Land Reform, Kevin Mileham MP, during the debate on the Property Valuation Bill.

Speaker,

Let me state at the outset that the Democratic Alliance is appalled at the way that this piece of legislation has been bulldozed through Parliament. I objected during the committee process about the limited time that had been allowed for public comment, and was assured that at least three weeks had been granted. Speaker, according to the departmental website, the Property Valuation Bill was advertised for public comment on Tuesday 4 February, and the closing date for submissions was Saturday 15 February. A mere eight working days.

In the committee, we took just three days (despite comprehensive amendments) to hear the submissions, obtain a response from the Department, consider all the commentary, conduct a clause by clause analysis, amend the Bill further and adopt a report on the Bill. As of 17:00 yesterday, I still had not received a final, cleaned up version of this Bill (see text of the Bill here).

We also have concerns around the tagging of this Bill. Despite assurances from the parliamentary law advisor that there are no provincial impacts, I ask that the following scenario be considered: 

A land restitution claim is submitted for a piece of land owned by either the province or a municipality. The office of the Valuer-General conducts a valuation in terms of s12(a) which determines a value. The province or municipality is substantially disadvantaged as the realisable value is significantly lower than market value.

This implies that the Bill should have been tagged as a S76(4) Bill, as it affects the financial interests of provinces.

Turning now to the content of the Bill: 

According to the memorandum, a critical issue in land reform is that of escalating land prices. These have, allegedly, contributed significantly to the slow pace of land redistribution. This has in turn raised questions about "the need for greater government intervention, including more willingness to use expropriation".  It has been argued that letting the market alone determine the pace of land reform delivery is not desirable.

But is this in fact the truth? A key purpose of the Property Valuation Bill is to speed up land reform. However, the main obstacle hampering success in this regard is not the willing buyer/willing seller principle the Bill seeks to circumvent. Rather it is the State's failure to support emerging farmers, along with incompetence and corruption within Minister Nkwinti's department, that is primarily responsible for the failures of land reform. Furthermore, when one considers the amount of agricultural land that has changed hands over the past 20 years, at market value, nearly the entire land reform process could have been completed with the funds expended to date.

This Bill utilises the expropriation criteria from s25(3) of the Constitution to arrive at "just and equitable value" - which almost by definition would have to be lower than market value.

While some concerns around the determination of "value" were noted by the committee, a key consideration has been ignored. The Banking Association of South Africa's submission highlighted the fact that the regulations to the Banks Act require that the security value of loans be derived from the market value of the property. If the value determined by the Valuer-General (and used for expropriation purposes) is less than market value, banks will have to adopt a much more conservative approach in lending. This could include:

·  Increasing the interest rates significantly;

·  Withdrawing from the market; and/or

·  Offering a significantly lower loan to value.

The net effect is that the cost of production, particularly of agricultural products, will be much higher, and the impact on South Africa's food security is potentially enormous. 

It is also important to note the impartiality required of the Valuer-General. S5(b) of the Bill requires that he/she be impartial and exercise the powers and perform the functions of the office without fear, favour or prejudice. The very next clause - s5(c) states that the Valuer-General is accountable to the Minister, who also, in terms of s8(1) appoints them. 

The Democratic Alliance supports the view that this office should, in the first instance, be placed within the Department of Public Works, and secondly that the appointment follow a parliamentary process through a multi-party committee.

Lastly, the provisions of s25(2)(b) of the Constitution cannot be overstressed. Regardless of the value placed on a property by the Valuer-General, the amount of compensation and the time and manner of payment thereof must either have been agreed to by those affected (i.e. the landowner) or decided and approved by a competent court. S33 of the Constitution provides further for the right to administrative action that is lawful, reasonable and procedurally fair and that national legislation must provide for the review of administrative action by a court. In this regard, the Promotion of Administrative Justice Act provides that any person may approach a court to institute proceedings in a court of law for the review of administrative action. Any attempt to bypass the courts would result in land restitution becoming further mired in corruption and inefficiency.

Speaker, the Democratic Alliance opposes this Bill.

Statement issued by Kevin Mileham MP, DA Shadow Deputy Minister of Rural Development and Land Reform, March 6 2014

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