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A ne w initiative to help set South Africa on a path towards achieving transformation and growth was introduced in Johannesburg yesterday.

The launch of the Brenthurst Initiative, hosted by the Oppenheimer family, proposes a national transformation scorecard, creating corporate tax incentives linked to transformation performance, and formulating a plan to close the black economic empowerment (BEE) funding gap.

The presentation and discussion, attended by more than 100 government, business, labour and community leaders, was opened by President Thabo Mbeki.

Mbeki said that one of the great challenges facing South Africa was to ensure that the economic fruits of political transformation could be shared by everyone.

He hoped the ideas presented by the Brenthurst Initiative would provide ground for debate, and help shape a winning future for all South Africans.

Nicky Oppenheimer told the meeting growth without transformation was unacceptable, and transformation without growth severely reduced the country's capacity to create jobs and alleviate poverty.

"South Africa's challenge is to achieve both greater transformation and greater growth".

He said South Africa was making tangible progress in creating wealth and improving standards of living.

However, investor confidence remained a vital prerequisite to further growth and delivery.

He said valid or not, investors perceived South Africa as a high-risk investment destination.

It currently ranked 70th out of 140 nations in terms of investment risk, alongside Syria and El Salvador.

"How we approach transformation must increase, rather than decrease investor confidence," said Oppenheimer.

"This requires measures to ensure business embraces transformation as an opportunity".

According to a statement released after the meeting, one of the recommendations was to create greater investor certainty through agreeing to a national transformation scorecard.

This needed to establish transformation targets that, once set, would not be subjected to further change.

Based on the existing strategy for broad-based BEE, these targets placed the emphasis not only on BEE ownership, but also on performance in areas such as employment equity, skills development and procurement.

"The full power of the scorecard will only be realised if measures are put in place that create real advantage for businesses that transform," the statement read.

Secondly, business partnerships needed to be created through corporate tax incentives that were linked to transformation performance.

The initiative proposed that the rate of corporate tax a company paid depended on its transformation performance as measured by the scorecard.

Businesses that transformed would pay less tax than those that did not.

"Transformed firms would then accelerate their rate of investment to take full advantage over their competitors".

Thirdly, investor confidence should be built by closing the BEE funding gap.

The statement said many current BEE deals were debt-laden.

The future sustainability of these deals could be threatened in an economic downturn.

New sources of BEE equity had to be created to accelerate progress and to ensure future sustainability.

It said the challenge was considerable. To reach a stage where 25% of the JSE was black-owned would require over R200-billion.

New sources of BEE equity could include tax effective Employee Share Options Programmes, mandated levels of savings, increased pension fund investments and incentives for private individual investment in BEE vehicles.

The South African economy needed to grow by five per cent annually if unemployment was to be halved to 20% by 2014.

"These ideas are not a silver bullet - achieving five per cent economic growth requires a range of effective interventions... and these ideas could form part of the solution to South Africa's challenge," said Oppenheimer.

"South Africa's economic advancement depends on investment, both direct and indirect, and on the sentiment that drives it.

"Ever since my grandfather first arrived in this country in 1902 the Oppenheimer family has been deeply committed to South Africa and its future.

"The Brenthurst Initiative aims to raise the primary issues around transformation and growth, and encourage debate, leading ultimately to broad-based consensus on required public policy.

"What is certain is that inaction is not an option, if we are to secure the future for our children and our children's children," he said.

The Oppenheimer family owns one-third of diamond giant De Beers and has a large shareholding in Anglo American, which was founded by Oppenheimer's late grandfather Sir Ernest. – Sapa.

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