Deputy Chairperson, all the Ministers and members of the House, we are celebrating Women's Month, and we salute those women who, through their relentless efforts, helped to establish our democracy and the liberation of women.
Hon Deputy Chairperson, the time is now. I don't know who of you can recall the posters in 1994 on the lamp posts that said: "The time is now". For us to introspect about the contribution the financial sector has made in the feminist fight against poverty, we must also assess how the financial sector has assisted in the redirection of a lack of equal opportunities for women in positions of authority in the economy.
The hon Minister emphasised the important role of the SA Reserve Bank in the economy, as well as the relevance of the amendments to the existing Act which addresses the challenges that the Reserve Bank has encountered in the past.
In the processing of this Bill, the Select Committee on Finance also attended a briefing given by National Treasury and the Reserve Bank to the Standing Committee on Finance in the National Assembly, as well as hearings on 2 and 3 June 2010. The select committee also received a briefing on the amending Bill on 12 August 2010 and also received written submissions and had presentations made by shareholders on 24 August 2010.
Hon members will be aware of the debate in the public domain regarding the role of the Reserve Bank which has been going on in the recent past, and now currently since the publication of the Bill for public comment. Prior to the publication of the Bill, the debate was about whether it is desirable to have private investors and shareholders in the Reserve Bank and whether or not it should be entirely nationalised. This question arose out of a concern that private shareholders could use their shareholding power to influence the Reserve Bank's monetary policy to the detriment of the national interest.
With regard to the composition of the board, the committee's work was guided by the minimum regulatory interventions aimed at ensuring that the substance of the key mandate of the Reserve Bank remains the domain of the Governor of the Reserve Bank and other executives. The proposed amendment to the composition of the board gives effect to the separation of responsibilities between the executive and the board. The Bill also proposes that four directors be appointed by the President in addition to those who would be nominated through the public process.
With regard to shareholders, the Reserve Bank is a public institution that derives its mandate from the Constitution, which guarantees its independence from external influence. The role of the shareholder is very limited, and this makes it different from commercial banks. It is in this regard that each person is allowed to own a maximum of 10 000 shares, which entitles him or her to an equal 50 votes in an annual general meeting, AGM.
The attempt by some of the shareholders to increase their shareholding through proxies and associates, such as family members, has serious implications for the Reserve Bank and may lead to monetary policy manipulation of the Reserve Bank, which will have a serious impact on the economy. The consequences of these activities will lead to a narrowing of the public participation share of ordinary citizens in the Reserve Bank.
With regard to the appointment and powers of the board, the select committee is in support of the establishment of the panel which will ensure that certain proper persons will serve on the board. It is important to support these amendments in order for the Reserve Bank to play its central role, where the main task is to achieve and maintain price stability by using various instruments of monetary policy, such as interest rates, which have an impact on inflation and the economy as set out by a democratic government.
I agree that there are opponents to this Bill. We met them yesterday. The question we should ask is: What kind of society do we seek to create? It is about understanding the process of transformation. It is significant to note that our Reserve Bank is only but one of the few - nine, in fact - central banks in the world with private shareholder participation. The others are the United States of America, Belgium, Switzerland, Japan, Greece, Pakistan, Italy and Australia.
It is evident that, after the financial economic crisis, the majority of governments in the world are beginning to review the role of central banking in the economy. Through correct policy mix and choices, a central bank can determine the rate of inflation, which influences the size of the consumer basket. It is important that the value of money remains stable because no modern economy can function well if its currency continuously loses value.
The committee is in support of the establishment of the open process of nominating directors to the board. The creation of legitimate state and public institutions can only be derived through regular and popular participation of ordinary people. The independence of the Reserve Bank can be safeguarded by ensuring that those who are nominated to serve will do so with the full understanding that the primary objective of the Reserve Bank is not to satisfy the likes and expectations of shareholders whose primary motive is to make sure of profit at the expense of the poor.
Hon Deputy Chair, the select committee puts its report to this honourable House and asks the House to adopt their report in support of the SA Reserve Bank Amendment Bill. Hon Deputy Chairperson, I thank you. [Applause.]
Debate concluded.
Question put: That the Bill be agreed to.
Chair, on a point of order: May I request the Minister of Finance to declare his vote? [Laughter.]
[Inaudible.]
You have been answered. You have the answer.
Bill agreed to in accordance with section 75 of the Constitution.