Initiatives for improving intergovernmental relations in tourism: briefing by National Department of Tourism; Committee Annual Activity Report 2010

Committee: Tourism

Chairperson: Mr D Gumede (ANC)

Date of Meeting: 07 Feb 2011

Summary

The National Department of Tourism spoke on initiatives for improving intergovernmental relations in tourism. The Committee was given insight into the different roles that the three spheres of government had in different aspects of tourism and the co-operation that went along with it. For example on quality assurance there was one national grading system. Provincially quality assessors were in place and worked with national on keeping a check on quality. Local government’s role was for the maintenance of public infrastructure and health and safety.

In as much as members appreciated the briefing, the concern was that the Department was not in touch with what was happening at grassroots level. People were still discontented and members had the opportunity to listen to concerns first hand on a recent oversight visit to townships. Up and coming tourism businesses found it difficult to survive and the feeling was that government assistance was not forthcoming. There was either too much red tape or synergy was lacking between the Department, provinces and local government.

Some of the positive points made were that there should be a greater focus on domestic tourism. Provinces and local government should start prioritising tourism as it was lucrative means of generating revenue.

The Committee adopted its Annual Activity Report 2010.


Minutes

Briefing on improving Intergovernmental Relations in Tourism
The National Department of Tourism (NDT) briefed the Committee on initiatives for improving intergovernmental relations in tourism. The briefing was done by Mr Victor Tharage, Deputy Director General: Policy Research, Monitoring and Evaluation assisted by Mr Kingsley L Makhubela, Director General, and Ms Beulah Mosupye, Chief Director: Sector Transformation. The Committee was given a breakdown of the overarching mandate of the Department. Members were given insight into research and information as it related to the three spheres of government. For example the National Department was responsible for the Research and Knowledge Management Framework. Local government was responsible for signage and information centres. There were also provincial registers for products and operators in selected provinces.

With regards to strategy, planning and budgeting the Department was responsible for the National Strategy. Integration and alignment was through MinMEC, MIPTEC (
Committee of Provincial Technical Executives responsible for tourism in the provinces and the Director General and Deputy Director General of Tourism in the central government) and supporting technical committees. There were also Ministerial and Director General bilateral engagements with partner departments. The Department was also working with provinces and National Treasury to develop a Sector Budget Structure. The NDT was responsible for developing the National Policy Framework. MinMECs were consultative forums for sector policies. Municipalities consulted via SALGA as a MinMEC member and also had direct consultations with the Department and provinces. A Governance Working Group discussed policies across the spheres.

At national level the Department provided financial support for product development through its Social Responsibility Initiative. Provincial government departments also provided funding for tourism development. Local government on the other hand provided support for basic services, public infrastructure, licensing of businesses, tourism signage and developed plans for tourism development. Other product and enterprise development initiatives include social responsibility projects, Tourism Enterprise Project and a Department of Trade and Industry (DTI) incentive scheme. On quality assurance there was one national grading system. Provincial quality assessors were in place and worked with national. Local government was responsible for maintenance of public infrastructure and health and safety etc. The Department also had a marketing partnership with the Department of International Relations and Co-operation (DIRCO). Marketing efforts were expanded to new markets through diplomatic missions, where SA Tourism (SAT) had no physical presence. DIRCO and the Department also trained SAT representatives abroad. MinMEC’s Marketing Working Group comprised of CEOs of all tourism marketing authorities of the provinces and worked with SAT to align marketing efforts.

On transformation, the Department was responsible for the implementation of the Tourism Charter targets. It had developed a Tourism Human Resource Development Strategy in consultation with provinces and the Tourism, Hospitality, Sport Education and Training Authority (THETA), to accelerate skills development. Some of the current gaps included insufficient tourism focus in provinces, a tourism cluster was needed across government departments, the need to promote domestic tourism and for Department participation in the DTI incentive scheme.

Discussion
Ms X Makasi (ANC) was pleased that the Department had a research technical committee to ensure better synergy between the different spheres of government. Synergy was also lacking in provinces. For example small businesses in townships wished to put up signs on major roadways advertising their establishments but were not allowed to do so.

The Chairperson stated that complaints in this regard had been made to the Committee on their recent visits to townships. He did however point out that there were regulations which controlled the putting up of signs on roadways. What was the Department’s efforts regarding discussing the issue with the Department of Transport and Provincial Road Authorities?

Mr Makhubela confirmed that there were regulations which governed the putting up of signs on roads. The responsibility lay squarely with the SA National Roads Agency. The issue needed to be taken under consideration. He pointed out that there had been close working relationships between national, provincial and local government on the putting up of signage in Kwazulu Natal. Regulations regarding the putting up of signage on roads were put in place for a variety of reasons. One of the most compelling reasons was safety.

Ms M Njobe (ANC) stated that the Department wished for a Tourism Cluster to be put in place. What was the difference between such Cluster and bilaterals between the Director General and the Minister? She noted that a complaint had always been that provinces did not make enough provision for tourism in their budgets. What was the feeling of provinces on why could they not provide for tourism in their budgets?

Mr Makhubela stated that tourism promotion was a monumental task, both nationally and provincially. Tourism had in the past not received as much attention as it should have since it was only a branch within the previous Department of Environmental Affairs and Tourism. Tourism was now on its own. For provincial governments, tourism promotion was even more daunting. Tourism was not a priority in provinces. Tourism focus was relegated to the periphery. More attention was needed and greater focus should be on domestic tourism. He pointed out that SA Tourism funding was between R600 to R700m yet nothing was spent on domestic tourism. The situation needed to change. There should be greater emphasis on domestic tourism. Tourism created jobs and contributed towards the Gross Domestic Product. The good news was that bilaterals led to better co-ordination. The problem was that historically tourism’s focus had always been on foreign tourists. Domestic tourism had huge potential and the reality was that certain by-laws were impediments. It was an issue that needed to be addressed. Bilaterals were useful. For example in Kwazulu-Natal discussions with Members of Executive Councils (MECs) had taken place on how to promote domestic tourism. Greater co-operation between national, provincial and local was needed on how better to spend funds.

Ms V Bam-Mugwanya (ANC) asked how the Department intended to initiate participation in the Department of Trade and Industry’s (DTI) incentive scheme. Many small operators who have great ideas, have business plans in place and have undertaken market research could still not succeed because of a lack of finance. The DTI incentive scheme as it was allowed very few businesses to participate in any case. How did the scheme work? The situation was difficult for small operators as many of their business plans were unbankable. She asked whether the Department could take over the tourism incentive scheme from DTI. DTI did not understand the difficulties within the tourism industry.

Another concern was that tourism graduates were seen to be unemployable because tourism studies curricula did not speak to the demands of the industry. She asked what the Department had done to address the issue. The subject content seemed not to be relevant to the market trends in the tourism industry.

Mr Tharage, speaking on the DTI incentive scheme, stated that the key issue was not about financial access. It was more about what would sustain a business. He noted that First National Bank pointed out that business plans of Small, Medium and Micro Enterprises (SMMEs) often did not make it through the first phase of scrutiny. People should be taught what business plans should contain. Persons should be informed about what the requirements from banks and municipalities were. There were many factors that SMMEs needed to be aware of. The point was to provide non financial support to SMMEs. The issue was about facilitating the environment ultimately.

Ms Mosupye added that the DTI incentive scheme considered geographic spread. The scheme worked on a rebate basis but a bankable business plan was a requirement. The core focus of the scheme was on those businesses that were operating for more than two years. The Department did provide support to the scheme. She stated that the Industrial Development Corporation (IDC) also had a fund that was supported by DTI and Old Mutual. The scheme in any event only provided small loans of up to R30 000. She agreed with Mr Tharage that one should look beyond the funding. The Department was working with THETA on training. What was required within the industry was identified. It was an ongoing process. The private sector was also making inputs as to what was needed as far as training in the industry was concerned.

Mr Makhubela stated that the present credit legislation, the National Credit Act, made it virtually impossible for these small businesses to obtain finance. Finance was an ongoing challenge for SMMEs.

Ms Bam-Mugwanya begged to differ with some of the points made by the Department. She stated that the Department only spoke from a bureaucratic point of view and not on what was happening at grass roots level. The Committee saw first hand what the situation was when oversight visits were undertaken. She felt that there was too much red tape. The common complaint at grassroots level was that government departments did not respond to the requests they made and persons often felt departments to be useless. She was not convinced that the Tourism Enterprise Partnership was as successful as what it was perceived to be. Government should check on what was happening at grassroots level.

The Chairperson agreed that greater scrutiny and oversight was needed over the Tourism Enterprise Partnership.

Mr Makhubela stated that the partnership arrangement was 50-50 on funding. He conceded that he had as yet not interacted with persons that had been assisted by the Tourism Enterprise Partnership. Members were requested to forward to the Department complaints received about the Tourism Enterprise Partnership.

Ms Njobe stated that persons in townships wished to participate in tourism. It was difficult for the Department to assist directly at grassroots level. This was where participation by provinces and local government was required. The issue of promotion of tourism by provinces was important, especially domestic tourism. Understanding the problem at grassroots level needed participation of provinces and local governments.

The Chairperson noted that many of the issues raised could be discussed at the upcoming Tourism Summit.

Committee Annual Activity Report 2010
The Report was adopted.

Committee Minutes
The Committee unanimously adopted minutes dated 18 January 2011.

The meeting was adjourned.