Minister of Tourism Budget Speech, responses by IFP, EFF & FF+

Minister of Tourism, Mmamoloko Kubayi-Ngubane, gave her Budget Vote Speech on the 22 July 2020

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Honourable House Chairperson
Deputy Minister of Tourism, Honourable Fish Mahlalela
Chairperson of the Portfolio Committee on Tourism, Honourable Mahumapelo Members of the SAT Board
Director General, CEO of South African Tourism and Senior Managers of the Department and SAT
Stakeholders following this debate Distinguished guests
Ladies and Gentlemen

Honourable members

We have just learned this morning of the passing away of the last remaining Rivonia trialist and Isithwalandwe Seaparankwe Andrew Makete Mlangeni. Chairperson, a giant has fallen. Let me take this opportunity to extend my deepest condolences to the Mlangeni family and to all his friends and comrades.

The Covid-19 pandemic has altered almost all aspects of our lives in ways that we never imagined and has so far been very devastating for the economy, internationally and locally. Tourism has been one of the worst affected sectors. The United Nations Conference on

Trade and Development (UNCTAD) has listed South Africa as one of the top 15 countries that are being the most negatively impacted by the near-closure of the international travel industry during the pandemic. Accordingly, UNCTAD predicts that tourism in South Africa is going to lose 3% in GDP contribution, and the loss of unskilled jobs in the sector could be as high as 12% if the virus is contained in the next 8 months. It is estimated that R54.2 billion in output may already have been lost between mid-March and the end of May this year. The sector now faces a potential 75% revenue reduction in 2020, putting a further R149.7 billion in output, 438,000 jobs and R80.2 billion in foreign receipts at risk.

On the 9th of March this year, we convened a meeting with the private sector to discuss the possible scenarios of what we thought the pandemic was going to play out in our country and the things that we needed to do together to respond to the virus in accordance with those scenarios. At the time we convened the meeting, our country still had only three known imported cases of coronavirus infection but the situation globally was looking very grim.

Of the three scenarios I presented in that meeting, I said that a scenario in which cases of Corona virus increase and only peak between the third and the fourth quarter was very likely to come to pass and that the of impact such a scenario on the sector was going to be severe, characterised by closure of businesses and severe job losses.

Honourable members, all indications are that we are living through the third scenario as I mentioned. This is hardly the time for bickering and apportion blame, rather the situation demands that we work together to ensure that we weather the storm going forward and quote Maya Angelou when she said “We delight in the beauty of the butterfly but rarely admit the changes it has gone through to achieve that beauty” Tourism has proven over years that it is a resilient sector and we shall see its beauty like the butterfly in not so long in future.

Since the meeting of the 9th of March, we have worked very closely with the sector in developing protocols, shared information in multiple meetings including a meeting with the President of the Republic and in the coordination of the gradual reopening of the various subsectors. Just as we worked together to ensure that the sector activities opened at level 3, we must continue to work together to get more tourism activities open going forward.

As per the risk-adjusted strategy, economic activities have been curtailed in accordance with the level of risk of increased infections and deaths identified in our country. Unfortunately, we still have a limited understanding of the pandemic thus it remains uncertain as to what will happen in the coming days, weeks or months. I am mindful that this does not bring any comfort to businesses that are in distress and to jobs that have been lost or on the verge of being lost.

On Relief Measures

House Chairperson, Government has intervened to support businesses that are in distress through the Coronavirus COVID-19 Loan Guarantee Scheme, worth R 200 billion and this is still accessible to many businesses including in our sector. Our sector also benefitted from the Temporary Employer/Employee Relief Scheme (TERS), established to provide financial

relief to employees during the Covid-19 through the UIF. Working together with the Tourism Business Council of South Africa (TBCSA) we were able to arrange for a special dispensation such that tourism businesses could apply for TERS through the TBCSA. TERS has so far disbursed R34-billion in 7.4-million payments since March this year and the announcement by Minister Nxesi of the extension until 15th August goes a long way as we are one of the sectors that made these requests for extension.

For our part, we redirected R 200 million which assisted 4 000 businesses through the Tourism Relief Fund. We ensured that the benefit is spread geographically across the country to cover even businesses in small dorpies and townships as per the discussions in the portfolio committee. I must reiterate Honourable Members that the implementation of the relief fund came under scrutiny and led to a court challenge due to the use of the government adopted policy of BBBEE. Unfortunately, the noise of the naysayers confused and discouraged even those who qualified for the grant not to apply because they were being told that the relief was specifically for Black people. This was not true. We have received many letters of appreciation from patriotic South Africans, black and white, who are indeed sharing their stories and are grateful that they did not listen to the misleading noise.

We have further reprioritised our budget to put together the Tourist Guides Relief Fund. In this regard, we have set aside a total of R30 million to provide financial relief for freelance tourist guides over a period of two to three months. The beneficiaries of this scheme must be registered in terms of the Tourism Act. So far, we have received a list of 9380 tourist guides from the provinces and we are finalising the verification process to start paying the eligible beneficiaries.

The Department introduced the Green Tourism Incentive Programme (GTIP), administered by the IDC, to encourage private tourism enterprises to move towards more efficient utilisation of energy and water resources. The Department is reviewing the implementation modalities of the GTIP to ensure that the much-needed relief for businesses to retrofit is speedily disbursed, so that they can reduce operational costs. We have set aside R 40 million for this programme. This will go a long way in providing the much need relief in this COVID-19 environment and beyond.

With regards to grading, South African Tourism has resolved to support the sector with provision of an exemption for up to 12 months of the grading assessments and fees followed by a payment holiday of 100% grading discount, when the sector resumes operation to aid the recovery of the sector.

We are cognisant of the fact that that both these schemes are incommensurate to the depth of the crisis faced by our sector. 

Projects and Budgets

Honourable members,

Because of the Covid-19 crisis, the Department tabled a revised Annual Performance Plan with revised annual targets, however our five-year targets remain as outlined in the five-year

strategic plan. We are confident that the sector will recover and we shall be able to meet our five-year targets.

We are, going to use the money we have been allocated to work towards building a firm foundation for a rapid and inclusive recovery of the tourism sector.

Honourable members,

During the medium-term, the Destination Development Programme will continue with the implementation of the Destination Planning and Investment co-ordination area of work with a greater emphasis on socioeconomically depressed regions and in alignment to the District Delivery Model. The Destination Enhancement Sub-Programme will similarly focus on implementing the  Tourism Infrastructure and Maintenance Programme in State Owed facilities, these two sub-programmes support the Coastal and Marine Tourism work and are supported by the implementation of the Project Management Standard.

In order to prepare our attractions for the return of tourists as part of the Phase 1 of the Tourism Recovery, the Expanded Public Works Programme (EPWP) will fund the implementation of an infrastructure maintenance programme in partnership with SANParks in three national parks. These are:

• Marakele National park in Limpopo
• Addo Elephant National Park in the Eastern Cape
• Karoo National Park in the Western Cape

We will also conduct a needs assessment and recommendations for Product Enhancement at 5 Local Community Museums:

• Anton Lembede Museum in Ethekwini Municipality (KZN)
• McGregor Museum in the Sol Plaatje Local Municipality (NC)
• Fort Dunford Museum, in Inkosi Langalibalele Local Municipality
• Lehurutshe  Liberation  Heritage  Museum  in  Ngaka  Modiri  Molema  District Municipality (NW)

We are confident that we are still going to meet our target of 2500 work opportunities created through Working for Tourism projects, EPWP.

Honourable members, Before the Covid-19 crisis our 2020/21 budget allocation R 2,480 billion of which R 1,304 billion was for Transfers and Subsidies. The Department’s revised budget allocation for 2020/21 is R 1,480 billion of which R 505 million is for Transfers and Subsidies.

The Department has had a total budget reduction of R 1 billion, with South African Tourism sustaining the largest budget cut amounting to R 886 million due to suspension of most of the marketing activities.

Our recent economic challenges have, in addition to increasing unemployment, thrown into sharp relief the enormous inequality in terms of income, assets, and opportunity amongst our people. It is mainly women and youths who find themselves in the margins of society.

We therefore have a responsibility to ensure that the recovery of the tourism sector is inclusive by increasing women and youth participation in the sector. The backdrop of all our plans and policies will always be transformation in the sector in terms ownership, and management and control in favour of the previously disadvantaged.

The Deputy Minister, Honourable Mahlalela will elaborate on what the Department is doing in terms of training for youth and women in the tourism sector.

With regards to entrepreneurship, the Department will also implement Enterprise Development Programmes, primarily targeted at women and youth, which provides developmental support to rural tourism enterprises over the medium-term period. The Programme comprises Hub-based Tourism Incubation Support and offsite national support for SMME. Our four incubators in Pilanesberg, Manyeleti, Phalaborwa, Mier are currently offering business support programme for tourism businesses affected by COVID-19, conducted through online platforms.

We are also in the process of establishing a Technology Innovation Incubator aimed at nurturing enterprises that introduces technology innovation in the sector and a Tour Operators Incubator, which is aimed at assisting emerging sector players in tour operation to better manage their businesses.

Most notably, the Department will implement the New Venture Creation Programme for youth in food services business including the utilisation of virtual platforms to activate Virtual Kitchens.

This initiative will spawn new value chains of restaurants that do not offer sit-down services and can be run from not so traditional geographic locations serving only online clients. Attached to this will be a growing transport services sector for the youth particularly in food delivery services.

Whilst global tourism activity remains supressed, world economies are under pressure and general consumer confidence uncertain, South African Tourism’s efforts will be strengthened to develop the future leisure and business markets. These will include bidding for future MICE events.

As part of ensuring we remain budget conscious, while executing our role, the South African Tourism Hubs in the various countries, have migrated from focusing on just the specific countries which they operate in, to looking after entire regions.

On Policy Matters

With regards to policy, the current policy framework was developed within the context of a tourism White Paper developed in 1996. In this financial year we are going to initiate a

process to review the white paper and all our policies to align them with the current trends and practices in the tourism sector.

Honourable members,

So much has already been lost, and admittedly, much of it will take time to recover. However, we should not lose this opportunity to work in partnership, government together with all tourism stakeholders, to prepare for the reopening, and growth of the sector. 

Tourism Recovery Plan

Working together with various stakeholders we have put together the tourism Recovery plan and we are in the final stages of consultation and we will within the month August submit the plan for Cabinet for Approval.

So far, the indications are that Tourism recovery will experience a number of phases, from hyper-local community attractions, through to broader domestic tourism, regional land and air markets, and resumption of world-wide international travel.

With regards to interventions, we envisage that Phase 1 of interventions will primarily focus on the protection of the domestic supply side of the sector. In Phase 2, the emphasis will be on managing the re-opening of the sector as tourism activities scale up. Phase 3 will target factors that can drive long term growth in tourism supply and demand.

One intervention that will drive demand in the recovery period is the MICE sector. We will aggressively bid to host large international events in anticipation of the opening of the borders so that upon opening, we can immediately drive up demand for our supply market and also build confidence that South Africa is safe and open for business.

Honourable members, we will work with our sister departments and tourism stakeholders in implementing a set of interventions so that we can induce a quick recovery. These will include readiness for the rollout of the e-visa system, resolving the challenges around the issuance of licenses for tour operators, and ensuring that all our marketing campaigns, globally and domestically and associated partnerships are in place and ready to be rolled out.

We have also been engaging with global bodies so that we coordinate with our partners around the world, especially our source markets, in preparation for the sector recovery. We have participated in virtual meetings with the G20 tourism ministers, the UNWTO virtual conference on Policies for Inclusive Recovery in Global Tourism, the AU First Meeting of the Bureau of the Subcommittee on Tourism of the Specialized Technical Committee on Transport, Transcontinental and Interregional Infrastructure, Energy and Tourism (STC- TTIIET) and the WTTC. The broad consensus in these forums is that countries must:

• Adopt global health and safety protocols to provide assurance to travelers that it is safe to travel again.
• Implement a rapid test and trace strategy to help contain the spread of the virus.
• Foster greater collaboration between the public & private sectors to ensure a standardised, global approach to the crisis.

We will in the coming weeks together with our stakeholders finalise the Norms and Standards that can be gazetted to assure the global community and more importantly tourist that it is safe to travel to South Africa.

The success of the recovery strategy implementation will be determined by how closely government and the private sector work together to harness nation's energies to more rapidly develop and rebuild our sector.

Honourable members

At a time like this we can draw inspiration from the words of Tata Madiba delivered in the National Assembly 100 days after he had been in office as President. Among other things he said: “Down the years, human society has pitted itself against the pestilences of poverty, disease and ignorance. Progress has been achieved while reverses have also been sustained. It is incumbent on South Africa to be in the company of those who have recorded more success than failure.”

Let us join hands and work together to ensure that the tourism sector records more successes than failures.

Honourable members

I hereby table budget vote No. 38 from the Department of Tourism together with priorities for financial 2020/21.

Thank you

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Deputy Minister Fish Mahlalela: Tourism Dept Budget Vote 2020/21

22 Jul 2020

Speech to the National Assembly by Deputy Minister of Tourism Hon. Fish Mahlalela, MM 22 July 2020 Parliament of the Republic of South Africa, Cape Town Tourism Budget Vote 38

Honourable House Chairperson
Minister of Tourism, Honourable Mmamoloko Kubayi-Ngubane
Chairperson of the Portfolio Committee on Tourism, Honourable Supra Mahumapelo Chairperson of the Select Committee on Trade & Industry, Economic Development, Small Business Development, Tourism and Employment & Labour
Members of Parliament
Board Members of SA Tourism Distinguished guests
Ladies and Gentlemen

Honourable members

Today, we connect, rather than gather under sombre conditions, to consider the tourism budget vote.

Although the situation we find ourselves in today has been on our scenario’s castings for decades, we never imagined the disruption we have had to navigate since the outbreak of the global pandemic, COVID- 19.

As I share and outline the underlying focus of the work which we commit to undertake through this Budget Vote, I want to recall the saying of former

President Thabo Mbeki, in his last address to the Nation as Head of State on 21 September 2008.  He said:

"Gloom and despondency have never defeated adversity. Trying times need courage and resilience. Our strength as a people is not tested during the best of times. As we said before, we should never become despondent because the weather is bad nor should we turn triumphalist because the sun shines."

Yes, we are on a disenchanted path – never traversed before – but despair and desperate measures should not be an option.

Our strategy for the MTSF period is built around commitments for growth and development expressed in the sixth administration’s priority of creating of a capable state – developmental of course.

Ours therefore, is to undertake projects that will contribute towards creating more decent and sustainable jobs, and investing for inclusive growth.

We are not rebuilding from nothing, and restoring traveller confidence is going to be a key ingredient in recovering demand over time as we strive towards re-establishing tourism flows.

Broadening benefits and creating an inclusive sector through enterprise development

Our interventions through opportunities like tourism incubator; tourism grading; and market access support; and other incentives programme, have made it possible for SMMEs in the tourism to reap positive rewards.

Through the Enterprise Development and Transformation Programme, we are introducing new players in the tourism economy and contribute to the competitiveness of tourism destinations.

The Enterprise Development and Transformation Portal will serve as an online supplier marketplace for SMMEs in order to promote sector transformation and job creation. We recognise that technology will drive provision of government services into the future.

Skills Development and Job Creation

As we continue with Working for Tourism projects, we will create 2500- work opportunities through the Department’s Expanded Public Works Programme (EPWP) during this financial year.

Our Working for Tourism Programme supports training, firstly through on the job training within infrastructure projects, and secondly stand – alone training interventions with participants accumulating credits towards a qualification.

Projects for 2020/21 include (1) Tour Guide Capacity building (2) Food Safety Quality Assurers (3) Wine Service Training (Sommelier) (4) Hospitality and Fast Food Training programmes.

Unfortunately, we have had to suspend the Youth Chefs Training and Coastal Marine Tourism Skills Development Programmes in line with the COVID-19 restrictions and risk assessments.

Investing in diversified developments and re-instilling confidence in the destination whilst broadening participation

Honourable members,

From a Destination Development perspective, we continue our path of inclusive growth through investments in community tourism, and will this year conclude concepts for the following community-based tourism projects:

1. Numbi Gate in Mpumanga: Ehlanzeni District Municipality
2. Nandoni Dam in Limpopo: Vhembe District Municipality
3. Tshathogwe Game Farm in Limpopo
4. Mtititi Game Farm in Lmpopo: Mopani District Municipality
5. Mapate  Recreational  Social  Tourism  Facility  in  Limpopo:  Vhembe District Municipality

Through the Grading Council of South Africa, we are also introducing an approach to prepare establishments for grading. This will enable establishments to receive feedback on areas that require attention prior to full grading application, thereby minimising the numbers of those that do not make it or increasing the uptake, particularly for emerging small enterprises.

We will equally pursue a well-developed system of handling and managing complaints from travellers and consumers, with an aim for ensuring speedy resolution of such complaints.

We will reopen, open up and meet again

The Meetings Incentives Conferences and Exhibitions (MICE) sector has endured the most of the global impact of the COVID-19 pandemic, with cancellations of events.

The pandemic resulted in the cancellation of Travel Trade Platforms globally such as ITB, IMEX and WTM to name a few; this included our own platforms such as Africa’s Travel Indaba and Meetings Africa.

The South African National Conventions Bureau (SANCB) will this year focus to support the recovery of business events tourism, by targeting future events, which have a bidding process of 3 to 4 year lead times.

The geographic spread of tourism business events is another way of broadening participation in the sector. For this, SA Tourism is developing a framework to capacitate national associations to host business events in Villages, Towns and Small Dorpies (VTSDs) across the nine provinces.

Enhancement of our knowledge base

The Department is in a process of conducting a comprehensive study on the impact of COVID-19 on the tourism sub-sectors, to better understand the impact and inform key interventions and development of responsive recovery strategies.

For 2020/21, we will develop two reports on the Impact evaluation of COVID-19 on the tourism sector.

We will implement the National Tourism Information and Monitoring System (NTIMS) to gather, analyse and provide data to inform our decision making and enable prioritisation of sector initiatives, towards areas with high tourism potential, including townships and rural areas. This is more important given that we need data to be able to support recovery and growth in all corners of our beautiful country, and across all our sub-sectors.

Reclaiming the safety of our destination

The National Tourism Safety Strategy, finalised late last year, covers three strategic interventions being (1) Proactive Measures- focusing on minimizing the incidences that affect tourist safety, (2) Responsive Measures and (3) After Care Programme to ensure effective support to tourists in distress.

Our collaboration with South African Police Services led to the signing of the Memorandum of Understanding (MoU) to identify and address challenges on tourism safety, including (1) Identification of tourism hotspots, analysis and (2) Enhancement of crime prevention initiatives,

(3) Creating a platform for joint awareness programmes.

The Tourism Monitors Programme was implemented in all provinces including in parks managed by South African National Parks (SANParks), and gardens under the South African National Biodiversity Institute (SANBI).

Albeit 302 participants continuing at SANParks, the programme has been temporarily suspended from 1 June 2020 due to the impact of Civid-19 on

tourism sites and attractions, thus affecting continuation in Gauteng, Western Cape, Free State, North West, as well as SANBI gardens. We will continue to monitor the environment, but our safety monitors stand ready to protect our destination in time of recovery. Plans are also underway for their further training by the South African Police Services Academy.

Responsible Tourism: Doing Tourism Sustainably

Despite our current challenge, we need to be reminded of the greatest environmental challenge of our time – climate change.

Accelerating the implementation of the 2015 Paris Climate Agreement requires clear strategies and a progressive system reform for climate responsiveness into tourism planning at provincial and municipal level.

Yes, we may be faced with COVID-19 today, but climate change brings with it, other forms of social and natural disasters, which also impact directly on the economy.

To this end, we have undertaken assessment of tourism vulnerability at a local level. Feedback shall be provided to the municipalities so as to ensure that they factor them in the development and adoption of plans.

Coupled with the introduction the District Development Model (DDM), we believe that we will enhance the competitiveness of tourism localities and open-up destinations as we continue to diversify our offerings, with local government as a key role-player in the spatial management of the tourism estate, including work done in communities under traditional leadership. This being a clear indication that tourism is community driven. 

Building a better africa and the world through cooperation

We can only recover and prosper if the rest of the region, Africa and the world are with us.

In the pursuit of economic diplomacy and development cooperation, the Department has signed Memoranda of Understanding with 35 countries globally and we continue to pursue more.

We shall continue to work towards regional integration through, capacity- building initiatives, investment promotion, sharing of best practices and dialogue about addressing tourism challenges and opportunities in the continent.

Through the regional economic and political alliance of the South African Economic and Development Community (SADC), we will collaborate with other states to implement the SADC Tourism Programme, as a roadmap of a sustainable tourism development and growth agenda for the region.

Our organisation and our people

Honourable Members

We can only do what we say we will if we have a solid organisation and the people within it.

The Director General and the Board, as supported by the CEO of SA Tourism, will continue to enhance our institutionalised mechanisms and capacity necessary to promote good governance.

To continue to spearhead public service excellence, we will enhance our governance mechanisms, promote ethical conduct, combat and prevent fraud and corruption, and deploy the technology required to optimise our performance.

Through our monitoring and evaluation efforts, we will seek continuous improvement of our project management systems to optimise efficiency and maximise on the intended outcomes and impact.

We will continue to promote diversity and disability management, sensitise employees about progress with disability agenda, and importantly, make sure we continue to walk the talk on these matters.

Amongst the initiatives we will implement to promote reasonable access, is conducting universal accessibility audit for our own headquarters.

In Conclusion

Today, we are witnessing businesses fighting for survival, and we see those who were destined for prosperity, now on the brink of impoverishment because of COVID-19.

This reality, makes me to once again borrow from former President Thabo Mbeki in the same address on 21 September 2008 when he said:

“Those who complete the course will do so only because they do not, as fatigue sets in, convince themselves that the road ahead is still too long, the inclines too steep, the loneliness impossible to bear and the prize itself of doubtful value.”

It might be a winter of despair, but our recovery tale also speaks of a summer of hope. I would not have done justice if I do not tap into the wisdom of the world icon, former President Nelson Mandela when he said:

“I learned that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers the fear.”

It is in our hands to transform tourism and ensure that our emergence from COVID-19 becomes a turning point for the sector and our country.

I thank you