Brenthurst Initiative

The Brenthurst Initiative was a 2003 policy paper on Black Economic Empowerment in South Africa by Jonathan and Nicky Oppenheimer that called for tax incentives to encourage economic growth and black wealth creation.

The proposal

The initial, draft proposal release in August 2003 had the stated objectives of boosting South Africa's economic growth rate from 2.7 percent to 5 percent annually, developing a system of tax incentives and penalties to encourage black ownership of companies and businesses and to raise R224-billion to ensure 26 percent black ownership of all equity on the JSE Securities Exchange by 2014. [Independent Online(1)]

The tax incentives, on a sliding scale, would be calculated based on a company's rating on a governmental empowerment scorecard and was intended to provide a competitive advantage to racially transformed companies. This was interpreted as a "carrot" to balance the "stick" of legislated transformation requirements and associated penalties. [Financial Mail(1)]

Reception

The initiative was first released at a function opened by President Thabo Mbeki [News24(1)] and drew praise from Cyril Ramaphosa and Moss Ngoasheng and criticism from Tony Leon and Mangosuthu Buthelezi [Cape Times(1)] .

The initial response from some economist and trade unions was described as "downright cool". [Business Report(2)]

The initiative was subsequently criticised for being too limited, for potentially reducing the tax base and for effectively proposing that a black majority government fund the transformation of white-owned businesses. [Fin24(1)]

A 2004 proposal by the South African Revenue Service for tax breaks to companies that give shares to a broad base of employees was considered to be linked to the Brenthurst Initiative. [Business Report(1)]

Notes

References

*cite web
url=http://www.iol.co.za/index.php?click_id=13&art_id=vn20030806060159288C443858&set_id=1
title=Oppenheimers pledge to boost transformation
publisher=Independent Online
accessdate=30 July
accessyear=2008

*cite web
url=http://secure.financialmail.co.za/03/0808/cover/coverstory.htm
title=A second CODESA?
publisher=Financial Mail
accessdate=30 July
accessyear=2008

*cite web
url=http://www.fin24.com/articles/default/display_article.aspx?Nav=ns&ArticleID=1518-25_1439830
title=Brenthurst plan under fire
publisher=Fin24
accessdate=30 July
accessyear=2008

*cite web
url=http://www.busrep.co.za/index.php?fSectionId=&fArticleId=2249692
title=Sars proposes tax incentives to encourage black empowerment
publisher=Business Report
accessdate=30 July
accessyear=2008

*cite web
url=http://www.busrep.co.za/index.php?fArticleId=203377
title=Cool response to Brenthurst initiative
publisher=Business Report
accessdate=30 July
accessyear=2008

*cite web
url=http://www.news24.com/News24/Finance/Economy/0,,2-8-25_1397922,00.html
title=Oppenheimer to SA's rescue
publisher=News24
accessdate=30 July
accessyear=2008

*cite web
url=http://www.capetimes.co.za/index.php?fSectionId=273&fArticleId=203240
title=New debate about transformation has begun, sparked by the Oppenheimer dynasty
publisher=Cape Times
accessdate=30 July
accessyear=2008

External links

* [http://www.thebrenthurstfoundation.org/Files/BrenthurstInitiative.pdf Original Brenthurst Initiative policy paper (PDF)]
* [http://www.hsf.org.za/publications/focus-issues/issues-31-40/issue-31/the-brenthurst-initiative Analysis by the Helen Suzman Foundation]