Business Unity South Africa (BUSA) on poverty alleviation, job creation and decent work

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Employment and Labour

08 November 2010
Chairperson: Ms L Yengeni (ANC)
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Meeting Summary

Business Unity South Africa spoke about its anti-poverty response and initiatives in working towards job-rich growth and its role within the Decent Work Country Programme. BUSA’s programme for poverty alleviation rested on nine pillars: Economic Growth, Enhanced Competition, a Regulatory Impact Assessment (RIA) Mechanism, BBBEE Opportunities, SMME Growth, Skills Development, Local Level Service Delivery, Public-Private Partnerships, Strategic Interventions (in rural development, food security, SMME support and enhancing projects in the financial services sector).

The National Treasury projected 4% growth by 2014, but this figure was not good enough.
BUSA was doing research that would underpin a report on how to achieve higher levels of job rich growth in the economy. Preliminary research had suggested that nine key choices had to be made if South Africa wanted to reach the economic growth to generate the needed 500 000 jobs per year. These were:
Through social dialogue, develop and champion a South Africa 2025 Vision & Growth Plan with deep participation from all facets of civil society and full participation of all social partners.
Move towards a delivery focussed state
Radically re-engineer the education system to a level competitive with upper middle income countries
Close the skills gap by 50% and lift the skills constraint on growth
Incentivise and support the 10% of industries and business opportunities that will create 90% of new jobs, in partnership with business
• Aggressively develop the competitiveness of labour intensive export orientated manufacturing and services industries with skills, innovation, technology, infrastructure, business environment improvements and business models that were positioned for growing African markets
• Reduce input costs to competitive levels
• Use bold measures to reach 50% of the unemployed
• Increase the percentage of school leaving youth accessing to the job market to 75%.

BUSA would release its Job Rich Growth document within a few weeks. It would be illustrative, aspirational and aimed to indicate direction and to stimulate BUSA’s own thinking.

Members asked if BUSA had done a skills audit, what its contribution to job creation was and if government did its job in creating an environment conducive to investment and doing business in South Africa. Members asked what BUSA was doing to lobby government to improve laws that hampered economic growth and if BUSA engaged with educators about not delivering skilled employees. BUSA was asked whether the relationship amongst government, labour and business was not becoming too cosy and to what degree these parties failed to hold each other accountable for their respective duties. Rural investment was also discussed.

Meeting report

The Chairperson welcomed the delegation from Business Unity South Africa (BUSA) and thanked them for accepting the invitation. She said that it was a privilege to have BUSA in the house, as BUSA had earned the respect of all parties in the National Economic Development and Labour Council (NEDLAC), representing business.

The Portfolio Committee had asked BUSA for a presentation on poverty alleviation, job creation and decent work. As the Portfolio Committee on Labour, job creation was not part of its core mandate, yet the Committee could not address its core mandate without including it.

Mr Jerry Vilakazi, BUSA Chief Executive Officer, explained that BUSA took its cue from the State of the Nation Address (SONA) and set up its agenda according to what was spelt out as priorities by the State President. This agenda was reflected in its dealings with its social partners, government itself, labour and the wider community.

He introduced the rest of the delegation, which included Prof Raymond Parsons, Deputy CEO, Ms Bev Jack, head of the task team for the Decent Work Country Program (DWCP) for South Africa, Ms Lee Padayachee, information manager who circulated a weekly newsletter to the business community in South Africa, informing them of what transpired in Parliament during that particular week, and Mr Coenraad Bezuidenhoudt, based in the BUSA Parliamentary Office. The Committee was invited to visit this office.

He explained that BUSA was a
confederation of chambers of commerce and industry, professional associations, corporate associations and uni-sectoral organisations
and the principal representative of business in South Africa, representing the views of its members in a number of national structures and bodies, both statutory and non-statutory. The organisation also represented the interests of business in the National Economic Development and Labour Council (NEDLAC).

Its focus was at the macro-economic and national level, on issues that influenced doing business in South Africa. It also tried to position South Africa internationally as an investment destination of choice for investors globally. It sought market opportunities for South African companies and products. BUSA was thus South Africa’s representatives at the International Organisation of Employers (IOE), the African Employers Confederation (AEC), the African Development Community’s Employers Group (ADCEG), of which BUSA was currently the Chair as well as the International Labour Organisation (ILO). BUSA also represented South Africa at the African Union. BUSA had set up various business councils with a number of different countries who paid state visits to South Africa and it accompanied the State President on state visits to other countries.

BUSA was very aware of poverty in South Africa. Since 1994 it had been part of several surveys and reviews indexing poverty in South Africa. The first one was the Harvard Review, done by professors from Harvard and initiated by Treasury. The second one was the OECD Economic Review of South Africa which indexed progress made since 1994 in different developmental areas. Three things had emerged from all surveys and they were that poverty remained rife, inequality was stark and unemployment levels were unacceptably high.

While noting that South Africa had made progress in many areas since 1994, these three areas had to be addressed. BUSA’s programme for poverty alleviation rested on nine pillars:
1. ECONOMIC GROWTH key, but should be more inclusive, especially on opportunities for youth, women and rural communities.

2. ENHANCED COMPETITION in our economy necessary for improved efficiency and growth.
REGULATORY IMPACT ASSESSMENT (RIA) MECHANISM should be institutionalised to remove impediments to growth, jobs and new enterprises
4. BBBEE opportunities must be leveraged to grow SMMEs and reduce poverty through targeted broad based ownership, corporate social responsibility and employment equity interventions.
5. SMME GROWTH depends on pro-active support and intervention.  BUSA will develop a coherent framework in partnership with our constituency from the SMME desk including NAFCOC, FABCOS & SACCI
6. SKILLS DEVELOPMENT a key area where business contributes (over and above its contributions to the SETAs) through artisan and graduate training, an enhanced role in governance and curricula development institutions of technical training, and through placement and internship programs.
7. LOCAL LEVEL SERVICE DELIVERY to improve delivery to the poor was an area where business wants to contribute more, especially re provision of services, capacity building and financial management.
8. PUBLIC-PRIVATE-PARTNERSHIPS were already helping to improve access to basic services and opportunities for peripheral communities, especially in the health sector, but were also key in ensuring support for catalytic investments into infrastructure  that will benefit SMMEs, communities, local business, BEE companies, etc.
9. STRATEGIC INTERVENTIONS in which BUSA will be involved to promote poverty reduction over the coming months will include programmes on rural development and food security, SMME support and enhancing projects in the financial services sector.

Prof Raymond Parsons said that BUSA was in the process of doing research that would underpin a report on how to achieve higher levels of job-rich growth in the South African economy. It would be released soon. National Treasury projected that by 2014, the economy would grow by 4 % per year. This was not good enough. China had the opposite problem. Its economy grew by 10-11% per year.

Preliminary research had suggested that nine key choices had to be made if South Africa wanted to reach the economic growth that would generate 500 000 jobs per year:
Through social dialogue, develop and champion a South Africa 2025 Vision and Growth Plan with deep participation from all facets of civil society and full participation of all social partners.
Move towards a delivery focussed state
Radically re-engineer the education system to a level competitive with upper middle income countries
Close the skills gap by 50% and lift the skills constraint on growth
Incentivise and support the 10% of industries and business opportunities that will create 90% of new jobs, in partnership with business
• Aggressively develop the competitiveness of labour intensive export orientated manufacturing and services industries with skills, innovation, technology, infrastructure, business environment improvements and business models that were positioned for growing African markets
• Reduce input costs to competitive levels
• Use bold measures to reach 50% of the unemployed
• Increase the percentage of school leaving youth accessing to the job market to 75%.

BUSA would release its own inclusive Job Rich Growth Document within the next few weeks, elaborating on these recommendations and listing new ones.

Ms Jack said that the Decent Work Country Programme for SA was a process that was currently been dealt with at NEDLAC. The ILO was leading on this process.
NEDLAC had established a steering committee of all social partners (Business, Govt, Labour and Community) and the ILO. It was through this steering committee that BUSA was involved. At NEDLAC, the social partners in South Africa had signed off on the base document and the DWCP matrix.
The Minister of Labour had launched the Decent Work Country Programme (DWCP) at NEDLAC on 29 September 2010. A memorandum of understanding was signed by all social partners. As a parallel process, at industry sector level, BUSA had been running a Decent Work program. The fact that the community in the form of civil society was a partner was important, especially when BUSA implemented the programme in the rural areas. It implemented the programme to make sure that it would work at sector level.

The SA DWCP rested on four pillars:

strengthening fundamental principles and rights at work, promoting employment creation, strengthening and broadening social protection coverage, and strengthening tripartism between labour, government and business and to deepen social dialogue.
The nine desired
outcomes of the programme for South Africa were:
1: Up-to-date International Labour Standards are ratified, complied with and reported on
2: Labour administrations apply up-to-date labour legislation and provide effective services.
3: More women and men, especially youth and persons with disabilities, have access to productive and decent employment through inclusive job rich growth
4: Sustainable and competitive enterprises (including cooperatives) create productive and decent jobs, especially among women, youth and persons with disabilities
5: Skills development increases the employability of workers and the inclusiveness of growth
6: More people have access to improved and more gender equitable social security and health benefits
7: Workers and enterprises benefit from improved safety and healthy conditions of work
8: The World of Work responds effectively to the HIV/AIDS epidemic
9: Strengthened labour market institutions and capacitated social partners (tripartite-plus) contribute to effective social dialogue and sound industrial relations

The DWCP had priority areas:
• Labour inspection systems in the public and private sector strengthened
Capacity of Government and social partners to promote employment equity strengthened
Macroeconomic policy strengthened to support employment and decent work outcomes
Strengthened national capacity to analyze and access data on decent work
Support for a coherent and enabling policy environment for the promotion of sustainable enterprises
Improved enterprise level productivity and competitiveness through relevant skills training
•Support for a new and more inclusive mandatory social security system
Policy and research support for the establishment of a National Health insurance
HIV/AIDS workplace policies and programmes strengthened
Capacity of social partners to engage more effectively in social dialogue strengthened.

In conclusion, deepening dialogue in building national consensus on job creation and poverty alleviation would remain key. The higher the job rich growth target, the more important improved policy coherence and integrated working between government departments became. The importance of lowering indirect contributors to employee costs, such as a lack of universal access to basic services and affordable transport and housing remained key to employment growth. Education and skills development were also pivotal factors. BUSA would continue in its research and advocacy efforts to support government in its quest to deal with the above challenges.

Mr E Nyekembe (ANC) welcomed the presentation. He asked BUSA why, according to the Commission for Conciliation, Mediation and Arbitration (CCMA), not many businesses made use of the lay-off/training scheme made available by the state to companies to skill workers and save jobs during the recession.

Prof Parsons replied that BUSA was very proud of the Training/Lay-off Scheme (TLS) and was very disappointed when it did not work as well as BUSA expected. He said that BUSA had made some observations and learnt some lessons from it. He asked Ms Jack to elaborate.

Ms Jack said that the point at which it was introduced was problematic. By the time it went live, 750 000 workers had been laid off already, and the TLS was designed for a situation where the worker was still employed. In Germany the workers were caught in the nick on time. Secondly, the scheme was poorly marketed to employers and employees. Where it was offered to employees, they did not take it. Thirdly the process involved too much red tape and workers found it too tedious, during a time they were stressed due to their imminent retrenchment. What was positive about the process was that BUSA observed the process closely and unpacked what worked, what did not and which lessons had to be taken forward. The next time the situation prompted a similar response, it had to be implemented quickly.

Mr I Ollis (DA) asked whether the relationships amongst government, labour and business were not becoming too cosy, to the degree that these parties failed to hold each other accountable for their respective duties.

The CEO, Mr Jerry Vilakazi, replied that BUSA had chosen the route of engagement. BUSA had a track record of achievements that its constituency, the business community, related to. It did speak up when it differed from government. The announcement of the new tax breaks for companies was the result of this engagement with government. BUSA had lots of bilateral meetings with government and its offices were frequented by Ministers, especially over the last 18 months. This was not due to cozy relationships, but engagements. BUSA and its members were also South African and had vested interests in the economic viability of the country as a whole. BUSA and its members were also every aware of its corporate responsibility. The members of BUSA recognized the value of the way that BUSA engaged with government. BUSA was partnering with government on common objectives. Where it did not agree with government, it voiced its disagreement. For example when government wanted to promulgate the Consumer Protection Act, it made a submission stating that the Act was not ready for implementation. The promulgation was postponed. BUSA would not oppose government for the sake of opposing, but rather worked co-operatively with government to achieve common goals.

Prof Parsons said that he carried the scars and wounds of a relationship between government and business that was all but cozy. Healthy, robust debate took place until consensus could be reached in order to solve problems. During the Mini Budget speech of 27 October 2010, the Minister of Finance spoke about a document called: ”Towards a Social Compact” but it had already been rejected by one of the partners, another sign that the social partners did not let each other off easily.

If South Africa wanted to get to a job-rich environment, more cooperation was needed and more areas of agreement needed to be found. There needed to be consensual stability around key tough decisions that still needed to be taken. Was growth good or bad for jobs? Bear in mind that the Minister of Finance and others had said that, the economy needed to grow at 7% per annum. This growth rate needed to be supported by appropriate policies. It was true that economic growth did not equal job creation, but it was impossible to create jobs in a stagnant or shrinking economy. This growth was a point of departure. If one looked at the global experience, where growth had created jobs, it was sustained growth. South Africa had never experienced sustained growth. It always came in spurts.

The economy was growing steadily, then the light went out, and then the recession hit. This broke the momentum in the growth that the economy experienced. South Africa had never had sustained growth at a high rate over decades. How would South Africa get onto a sustained growth path? By having a long term vision and support from the partners with policies. Divisiveness would not help this process. The overarching goal was to have an economy that was moving, out of which one could get more; rather than a stagnant economy, out of which one could get less. There were tough choices to be made, and there would have to be consensual stability built around those tough choices. Tough choices meant that there would be pain. The
question was how the pain would be distributed.

Mr G Boinamo (DA) said that the government was not responsible for creating jobs. Government’s duty was to create an environment conducive to doing business, which had job creation as a result. It was often said that economic growth did not translate into job creation. How could that situation be changed so that economic growth also resulted in job creation. BUSA said that it created 500 000 jobs per annum. Were those jobs permanent? If both temporary and permanent, how many of those were permanent

Mr Ollis said that he understood that the decent work campaign was about two things. Firstly, conditions of employment, and secondly salaries. He understood that the unions worked hard to get the best deal for their members, but as the unions wage demands went higher and higher, businesses could employ fewer and fewer people. In this fashion, the unemployed remained unemployed. He asked whether some wage demands were not simply unrealistic and what BUSA was going to do about it. He asked whether some labour laws did not need to be reviewed. He asked BUSA to specify practical steps to explain how it was going to create 500 000 jobs within the next year.

Mr Vilakazi replied that he did not recall saying that creating 5000 jobs was easy to achieve. What he did say was that it was achievable. He agreed with Mr Boinamo that it was not the state’s duty to create jobs. The state had to create the environment wherein citizens could start businesses to create wealth. Jobs were a by-product of that wealth.

South Africans tended to look at things from the half-empty-glass-perspective. He agreed that the economic growth did not create sufficient jobs, but jobs were created. Towards the end of the 90’s, the unemployment rate was 40%. When the recession hit in 2008, the unemployment rate was 23%-29%, which meant that it was almost halved. This meant that jobs were created when the economy grew. The economy needed a new growth path to create new jobs at a rate of 500 000 per annum. It would not be delivered on a platter; there were hard choices to be made. Sectors had to be identified that generated large numbers of jobs, for example the automotive industry. These sectors had to be studied and understood in order to employ the knowledge to create jobs.

The Chairperson asked whether the CEO was dismissing the assertion that the Member made that economic growth did not benefit the poor. She said that from the perspective of politicians, growth was measured in terms of the degree to which it changed the way workers and the poorer sectors of society lived in places like Gugulethu, Soweto and Kwa Mashu. Textile workers were directly affected by growth and shrinkage of the economy. Business counted the number of workers they had employed, while politicians looked at the change in the quality of their lives.

Mr Vilakazi replied that what BUSA was saying was that economic growth was key to creating jobs so that people could change their own living conditions. From BUSA’s view it did create jobs, but not sufficient. Through NEDLAC and new programs, it needed to find job-intensive growth. From government generated statistics as well as its own observations, the economy was beginning to create jobs, but not in sufficient numbers. BUSA realised it had to do things differently to address the quantum and it had to draw lessons from the past 15 years.

Employees lived too far from their places of work and many had to use three modes of transport to get to work. This was extremely expensive. It was as a result of Apartheid planning which located townships far from the CBD and industrial hubs. Part of the discussion of lowering the cost of business in South Africa had to be, a discussion on where new houses were being built. Low-cost housing had to be built closer to commercial and industrial hubs to cut down on the transport costs of employees and transport infrastructure had to be part of the debate. BUSA would continue to engage with its social partners and government on the New Growth Path.

Mr W Madisha (COPE) said that he wanted clarity on some of the pillars of BUSA’s strategy. How did BUSA assess its affiliates to make sure that the Labour Relations Act was implemented. Telling them to do it did not ensure implementation

Mr Madisha said that when talking about unemployment one had to consider the growth in the casual labour market, but all the casual labour was done by foreigners. Casual labour was not ‘safe’. What was BUSA’s comment on that?

Ms Jack replied that BUSA’s strategy had changed over the last few years regarding casualisation, because it listened to its social partners. Initially, business had taken a stance by declaring itself compliant, and leaving to the other social partners to address non-compliance. It realized that it had to work with the social partners and take ownership of the situation. The strategy was to address the situation with education. It defined what was and what was not compliant and started to put structures in place to address it. There was a public–private partnership in place where BUSA worked closely with government on the Labour Inspectorate in order to identify non-compliance. However BUSA also wanted to empower individuals to understand what a compliant environment was and was starting to put measures in place to achieve that. The CCMA was intimidating to companies. BUSA had started a pilot project with the unions to set up a labour ethics hotline where non-compliant parties could call for advice and support behind the scenes. BUSA was engaging with casualisation in a different way.

Mr Nyekembe said that whilst understanding that BUSA was requested to speak on decent work, it also had to reflect on inequalities. The Employment Equity Commission Annual Report painted a damning picture of the private sector. He asked BUSA to elaborate.

Mr Vilakazi said that BUSA was concerned about the slow pace of transformation. There were those companies that worked very hard at transformation and there were those that did not. BUSA did a survey through which it became aware of the lack of transformation. BUSA would not condone the practice of non-compliance or protect companies that did not comply.

BUSA would strengthen the inspectorate. It would run workshop with members. Where companies were reluctant to transform, government had to use the law. A lack of skills was used as a blanket excuse for not displaying the national demographic.

The Chairperson asked the CEO whether he agreed with Members that companies affiliated to BUSA did not adhere to employment equity.

Mr Vilakazi replied that not all companies complied to transformation policies. The Employer Equity Report as well as the survey done by BUSA itself confirmed that JSE companies still reflected apartheid demographics. It was reported to BUSA that in the Western Cape, a trend was emerging. Black Africans were very seldom appointed at the top executive level in companies, and in the instances that it did happen, they did not stay long, or asked to be transferred to other provinces in cases where the company had offices in other provinces. BUSA made a study of this phenomenon. The report on this study gave BUSA a lot of very useful information. It was aware that many companies simply did not comply, or did not comply because they could not find people with the right competencies to fill the position.

The Chairperson said that it could not be an easy task for BUSA to make sure that companies complied to employment equity if BUSA itself had not been transformed. One Chamber organization left the Chamber for the reason of non-transformation of the Chambers, including boards. What strategy did BUSA have to make sure that the Chambers and boards transformed.

Mr Vilakzi replied that in 2007 the Black Business Presidential Working Group did a baseline study and produced a report. It painted a gloomy picture. The then President convened a meeting of business and government to say what was going to happen. Then the president of BUSA, Patrice Motsepe, convened a meeting of business, labour and government to discuss the report and what needed to be done in the different constituencies in order to address this situation. This process lead to the signing of a pledge by member constituencies of BUSA, committing themselves to drive transformation in their companies and chambers. BUSA held workshops in its own constituencies. BUSA had a bias towards black women in promoting them for training at the ILO training facility in Turin, Italy. BUSA embarked on a process to promote and ensure cross-fertilization amongst the different business federations, in order to stimulate transformation. In terms of the office bearers of BUSA, the president was an African black woman, one vice president was a coloured woman, another vice president was a black woman, another vice president was a black man and another vice president was a white man. The CEO was black.

The Chairperson asked what the situation was with the board members. She could see that BUSA had tried with the vice presidents, but was BUSA trying to transform its board?

Mr Vilakazi replied that BUSA had seen progress in transformation in its member organisations. It want to see this progress translating to company level as well, because meaningful economic transformation happened at company level. A survey was done with JSE companies and woman were appointed on boards, but as non-executives. BUSA was addressing this.

Mr Nyekembe said that he appreciated the fact that BUSA represented business on an international platform at the ILO and that the ILO encouraged social dialogue. NEDLAC was an Act of Parliament. Its aim was to bring the different sectors together in order to reach consensus on important issues. BUSA needed to continue to make sure that social dialogue took place. Before 1999 when Sam Shilowa was still General Secretary of Cosatu, there was an international tour with business and labour. The cooperation between the parties was appreciated.

Mr M Nonkonyane said that he appreciated BUSA’s slogan “One Voice of Business”. It said that BUSA aimed to unify members of the business community behind this progressive organization. He asked what role if any, BUSA played in mitigating the damage inflicted by the economic recession.

Mr Boinamo asked if BUSA had done a skills audit in the country and whether it knew exactly which skills were needed. Had BUSA come up with a programme to address this challenge?

Ms Jack replied that what BUSA would like to see come out of the Human Resource Development (HRD) process was an integrated process. The Government had to provide accurate labour market statistics. Being able to get accurate statistics quickly, would make it possible for role players to fill those vacancies quickly, thus eliminating the need to rely on work permits and foreign labour.

Mr Madisha asked what BUSA had done to create jobs. The Business Trust which was funded by business, played a key role in funding a number of projects including the research that was done and the setting up of the process of how RSA could position itself in terms of the Business Process Outsourcing Business internationally. The Business Trust played a key role there. It still had R100 million in unspent fees on its books. Business would continue to play its part, but government had to lead.

Mr Madisha said that in 1998 unemployment was almost 40%. President Mandela brought business and labour together and R89 million was collected by the Labour Job Creation Trust and 39 000 jobs were created. Business did not contribute anything towards this effort. Workers donated one day’s wages. What had BUSA done to create jobs?

Mr Madisha said that when he played a role in the trade union movement, he remembered that the unions complained at NEDLAC that Government did not play its role properly, and he was informed that it was still the case. He asked what needed to be done to ensure implementation. He would not put pressure on BUSA to respond immediately. He encouraged BUSA to meet with the Job Creation Trust. The workers gave that Trust R89 million. BUSA had to meet with them to help ensure implementation of the job creation programs it was founded for.

Mr Boinamo asked how South Africa would address the skills gap if so many schools were dysfunctional and spiraling downwards. If the country wanted to address the skills shortage, it had to mercilessly change the education system around.

Mr Madisha referred to the skills development part of the presentation with the goal of closing the skills gap by 50%. No indication was given from where the unskilled workers came. Once skills were put in place how was BUSA going to ensure that the skilled get employed. Would they be skilled/trained while working?

Mr Nyekembe asked how BUSA planned to bring the youth on board. What was its relationship with National Youth Development Agency (NYDA)?

Mr Madisha said that the report was good but it did not indicate implementation of what might be good objectives. The two parties had to agree on a time in the future when they could come together again to assess implementation of the plan. What was BUSA’s role in ensuring that the SETAs produced skilled people

Mr Ollis asked what BUSA did to engage with educators about not delivering skilled employees.

Mr Vilakazi replied that BUSA had a vested interest in education, although it was not BUSA’s focal point. Firstly, BUSA met with Higher Education South Africa (HESA), an organization for the chancellors of universities and technicons. It had been a problem that the country could not fill over 200 000 jobs at one point, according to a report by the Human Sciences Research Council, while thousands of graduates were unemployed. There was a mismatch between what the tertiary institutions produced and what the market needed. BUSA met with this body regularly in order to work towards aligning the two. Secondly, BUSA had started campaigns to get its members to avail themselves to serve on the boards of educational institutions so that they could influence policies and decisions around curricula. Thirdly, representatives from companies that had a sound track record of skills development and training, were nominated to sit on the executive of BUSA in order broaden BUSA’s knowledge base on skills training. The HRD Council, lead by the Deputy President, was a key instrument in terms of determining the skills needs of the country.

One of the reasons why BUSA welcomed the National Planning Commission was because it filled a gap. Other countries in the past had set goals for themselves to state where they wanted to be within a certain period of time. BUSA anticipated that this forward projection and planning would make the road to that point clearer. For example it would answer the questions ‘ What kind of skills did the country need to cater for its renewable energy needs? Which technologies would drive the skills?’ BUSA would make its inputs through the HRD Council.

BUSA sat on the SETAs boards. Companies paid a minimum 2% on skills development. Some spent much more. Mr Vilakazi added that in other countries, high end managerial as well as specialized technical skills were scarce. In South Africa artesian skills were scarce. When the World Cup stadiums were erected, it was discovered that there was a shortage of welders and people had to be imported to do the job. BUSA was engaging the Ministry for Higher Education, because students finished the theoretical part of their training at FET colleges and then needed opportunities to do their practical training and there were none. For this reason BUSA encouraged its members to become part of the councils of FET colleges and other tertiary institutions.

Mr Ollis asked what BUSA was doing to educate the public to teach them what was realistic in terms of wage demands.

Ms Jack wanted to add on to the topic of decent work. The ILO agreed that decent work was a delicate balance. Workers had to be educated about their rights and had the right not to be abused, but they also had to be educated about what would be reasonable wage demands and at what point did they just become unrealistic. Productivity was also a factor that fed into this debate. The social partners had to talk to communities and stakeholders. The social partners had to talk to youth and casual workers to educate them about reasonable expectations when it came to working conditions and wages. Coming back to the perceived cosy relationship between BUSA and the government, she said that the debate on decent work was very robust, in order to negotiate this fine balance.

Prof Parsons said that wage increases had outstripped productivity. BUSA had expressed its view on this matter more than once. In the future, if aiming for a higher growth path, there had to be a stronger link between wage increases and productivity. Here Productivity SA was important and productivity had to become a central issue in the debate. Any change to labour law or regulation had to go to NEDLAC. BUSA encouraged government, instead of reviewing laws on an ad-hoc basis, that this should be done with a Regulatory Impact Assessment Mechanism (RIAM). The RIAM systematized evaluation and would allow BUSA to make a more structured contribution.

Mr Boinamo asked whether, according to BUSA, the government did its job in creating an environment conducive to investment and doing business in South Africa?

Mr Ollis asked what BUSA was doing to lobby government to improve the laws that hampered growth.

Mr Nyekembe raised the issue about labour cost. The presentation pointed at the cost of transport as a result of the distance between the labour force and their places of work, as a factor that pushed up labour cost in South Africa. What did BUSA think could be done about it?

Prof Parsons replied that the Investment Environment was key to the search for the higher growth path. South Africa needed to enlarge and improve the investment climate. It needed to attract more foreign direct investment instead of the kind of investment it attracted currently, which strengthened the Rand. The current ratio of investment to GDP was around 20%. To achieve the higher growth path, 27% was needed. To achieve this South Africa had to become the investment destination of choice. This would form an important part of the contribution that BUSA would make in achieving the higher growth path.

On the issue of global prices, he wanted to place on record that there was a Collective Document which was released on 19 February 2009, which was signed off by business, government, labour and civil society on how to deal with the crisis. SA was applauded by the ILO for being at the forefront with initiatives to cushion the impact of the recession on the SA economy. Some of the measures had been implemented and BUSA was very supportive. South Africa had followed a counter cyclical policy, which BUSA supported and BUSA supported and advocated for a reduction in interest rates.

The final point Prof Parsons made was about the capacity of NEDLAC and its constituents to monitor the decisions taken and implementation, and to do its work. The capacity of NEDLAC needed to be strengthened in the light of its broadening mandate. The R16 to 17 million it was allocated was out of balance with the enormity of its mandate.

Mr Bezuidenhoudt said that the suggestions in the
Job Rich Growth document were illustrative and aspirational. It was just to indicate direction and to stimulate BUSA’s own thinking. The document would be released within a few weeks. The suggestions were not cast in stone. More practical suggestion would be put forward when the document would be released.

Mr M Tlokwe said that he was a rural dweller. Business went where it could make profits. There was no infrastructure in the rural areas. BUSA was not saying anything about rural development. Where did BUSA locate itself regarding rural development? He would prefer stronger government to level the playing field.

Mr Madisha said that growth was not really happening with SMMEs in the rural areas. There was a need for dialogue about this issue in the future.

Mr Nonkonyane quoted the presentation where it referred to food security projects in the rural areas and reaching the school going youth. He wanted time frames to be attached to all these programs

Mr Vilakazi replied that rural development was a huge opportunity for business, where it could make huge profits. It depended on Government. SA was two countries in one. One first world and one a third world country. Government determined where business went by creating the environment. The development of rural communities were in the hands of government. There was huge potential for agricultural development in rural areas. There were few banks in the rural areas, but there were people receiving grants and pensioners, there were farmers, there were businesses. Things happened because government created policy instruments that enabled investors. The Middle Eastern developments were a case in point, where economic and commercial hubs were built in the middle of the desert, because of a policy decision, and it attracted investment.

The Chairperson said, regarding the cosy relationship between government, labour and business. She liked what BUSA had said about business, government and labour that had to work side by side. Government was the biggest client of BUSA. Business, labour and government were interdependent and had to work side by side to meet the challenges of the country.

She saluted BUSA because it owed its existence to the democratic change that was ushered into the country in 1994. It was a melting pot of different communities and cultural groupings in SA with business as its common denominator. She expressed appreciation for the effort that went into bringing all the constituent parties together to form BUSA as well as embarking on a process of transformation within BUSA. Transformation was not easy, and even Parliament had challenges around it. .When questions were asked it was not because the Portfolio Committee wanted to corner or intimidate BUSA, but to gain understanding of its operations, strategies and plans. She thanked them for the presentation.

The meeting was adjourned.


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