Members of the Committee noted that a new draft Report on the Department of Economic Development (the Department’s) strategic plan and budget for 2011 had been prepared, and proceeded to discuss it, in preparation for the debate the following week. A DA Member disputed whether it was correct to start making additions to the Report, as he thought that Members should concentrate on the areas already discussed, and indicated that he would not be able to support the Report if it contained new wording not circulated to the Committee in advance. The Chairperson noted that the remainder of the Committee was not averse to making changes, and said that the Committee would be concentrating on those items that it felt were important to be included in the report.
Members then went through the draft Report, page by page, suggesting changes where necessary. A number of the points made were deleted, and the headings were changed. Recommendations were added to the section dealing with the Department’s strategic plan. Members wanted reports from the Department on its efforts to address spatial dimensions, within six months, and wanted progress reports on the process of finding accommodation within three months, pointing out that this was hindering the efforts of the various entities. They were also concerned to ensure better coordination and collaboration amongst the Development Finance Institutions, better alignment of plans across the spheres and improving communication with cooperatives and small businesses, many of whom were unaware of the services offered by the finance institutions.
Members heard, at a late stage of the meeting, that it was possible to submit the report on the Department alone for inclusion on the ATC, and debate in the following week, and let the reports on the entities stand over for consideration at a later stage. However, whilst waiting for a quorum, Members continued to debate the remaining sections of the Report, up to the end of Paragraph 4. Members asked for the tables containing figures to be removed from one place and inserted under the entities.
When a quorum was established, Members voted to accept the Committee’s report on the Department’s budget and strategic plan, as amended.
Committee’s draft report on Department of Economic Development 2011 strategic plan and budget
The Committee resumed its discussions on the draft Committee Report on the Strategic Plan and Budget of the Department of Economic Development (the Department or EDD) and its entities.
The Chairperson noted that the revised report had been received only on that morning, due to computer problems. The budget vote debate would be held on Tuesday. This was quite a thick report, and sufficient time must be allocated to it.
Ms D Tsotetsi (ANC) asked that Members focus on the most important areas, and questions and responses.
Mr S Marais (DA) supported that, and suggested that the Committee should deal with the split in responses and discussions. Quite a lot of work had already been done on this. He would prefer to focus on the content and essence.
Mr X Mabasa (ANC) thought that the Committee should run through, page by page, to check on issues to be corrected.
Mr Z Ntuli (ANC) agreed with Mr Mabasa. The new report contained a lot of new content that needed to be studied and put in proper context.
The Chairperson asked Members to comment on the report, page by page.
Mr N Gcwabaza (ANC) suggested that, in the first paragraph of “Introduction”, the words “and its entities” should be added to the reference to the Department of Economic Development (EDD or the Department).
Mr Ntuli commented that because this was a report for the future, he would prefer to mention that the Committee was “established in 2009”, without commenting that it was “relatively new”. (This insertion was made, but was later deleted.)
Mr Mabasa suggested the insertion of another paragraph, to say :
“The aim of the Department of Economic Development is to promote economic development through participatory, coherent, and coordinated economic policy and planning, for the benefit of all South Africans:
coordinate economic development contributions of Government departments, State entities and civil society
contribute to coherence between government objectives and the public sector economic policies and plans
promote Government’s ability to achieve its goals of advancing development with decent work opportunities.”
Mr Marais asked where that definition came from, whether it repeated what was in the strategic plan, and whether it correlated with the aim and vision of the Department. He could not support the insertion of this paragraph, as he had understood that the Committee would be dealing with the content, whereas this was adding to the report.
The Chairperson said that she did see what the problem was. Whilst it was indeed adding to the report, the report should reflect what the Committee wanted to say.
Mr Marais said that the statement added was already either in the strategic plan, or was attempting to add to the strategic plan. It was not part of the document that had been received that morning. If it was in the strategic plan already, it was not necessary to repeat it. If it was attempting to add to the strategic plan, it was not relevant.
The Chairperson asked Mr Marais if he was suggesting that anything contained in the strategic plan could not be repeated in the report. She asked Members to agree in principle what they wanted in the report.
Mr Marais said this was a Committee report on the strategic plan, and should not be a repetition of the strategic plan. If the new paragraph was to be inserted, then he wanted to have the strategic plan in front of him. On the previous day, the Committee had gone past this part of the report. He did not think that the Committee should be adding to the report.
The Chairperson reminded him that the Committee had agreed to go through the report, page by page. This was the process being undertaken.
Mr Marais said that if the principle was that Members could add to the report, then the draft wording should be tabled in advance.
The Chairperson reiterated that she still did not understand the problem. Mr Marais had not even looked at the wording.
Mr Marais said that if this report was being considered today, then he would not support it.
The Chairperson said that this was his right. She asked other Members to comment on that insertion.
Mr Gcwabaza commented that whenever committees received the report, they would generally amend, insert or delete portions of it until satisfied, and that was the spirit in which this Committee was also approaching the matter. This was not merely an internal report, but would go to Parliament, so all Members must be satisfied on it. He believed that the introduction should be a summary of everything to follow. He did not see any reason not to consider additions or removals.
Mr Gcwabaza suggested that the first paragraph should end after the second sentence. The remainder of that paragraph was accommodated elsewhere in the report. He also suggested that the word “inequalities” should be added so that the phrase now read “income [distribution] inequalities and eradication of poverty”.
The Chairperson suggested that the reference to the establishment of the Committee should be removed, so that the mandate of the Committee should read as one sentence.
Mr Gcwabaza suggested that another sentence be added, reading that : “The New Growth Path is one of the instruments to achieve these stated goals”.
Mr Mabasa supported those changes, which made the report more precise.
Mr Ntuli suggested that after Mr Mabaso’s insertion, the paragraph starting “In March 2011” should also be removed as it was repetitive. In addition, the reference to the entities and department briefing the Committee should rather be placed under the section dealing with the strategic plan.
The Chairperson suggested that the paragraph about the Department reporting to the Committee should form an introduction to paragraph 2, and then the outline about the entities reporting should move to page 10, under paragraph 5.
Ms Tsotetsi asked that consistency be maintained in the presentation.
Mr Gcwabaza asked that point 2.1 on the Overview be removed, so that there was a better flow, so that everything was reflected as a Departmental aim, rather than talking to individuals.
The Chairperson noted that there was too much repetition of “the Department” and the first part of paragraph 2.1 was adjusted. The following sentence was split into two sentences.
Mr Ntuli did not think there was any need to include the second paragraph, commencing “The strategic plan sets a vision…”
Mr Marais said that he did not agree. This was an overview of the strategic plan and it was important to keep this in, to explain why the vision was different. That related back to his previous argument, as this was in the strategic plan.
Mr Gcwabaza thought that the second sentence should read “The focus of the organogram places emphasis on creating high level skills”, but that the rest of the paragraph was not needed.
Mr Mabasa agreed with him. The rest of the paragraph dealt with administrative functions and was not necessary for inclusion in this report.
Ms Tsotetsi pointed out that all departments were expected to have a focus on high level skills.
The Chairperson pointed out that this related to the Department’s vision, with emphasis on creating high level skills.
Mr Marais said that the remainder of the paragraph was emphasising why the Department needed high level skills, and why its position was different from other departments, because more high-level skills were needed at front office, to deal with service delivery.
The Chairperson asked if he would object to the omission of the rest of the paragraph.
Mr Marais responded that the sentence emphasising the front-office workers would have to be removed, if the rest of the paragraph was removed.
Dr P Rabie (DA) noted that the Minister was implying that this department had an oversight role over others when it came to procurement, and that was what made it unique. He had also brought in the metaphor of front and back office staff.
The Chairperson asked that the wording be changed to emphasise why this Department was unique, rather than referring to other departments.
Ms Tsotetsi thought that the wording relating to the overarching nature of its wok should be inserted.
Mr Gcwabaza suggested, and Members agreed, that the words “The vision of the Department, and the focus of the organogram, places emphasis on creating high level skills for service delivery” should be used, and that no comparisons should be made with other departments. The rest of the paragraph should be deleted.
Members agreed to make technical amendments were made to the following paragraph, to improve the flow.
The Chairperson reminded Members that wherever there was reference to individuals, such as “the Minister” or “the DG” or names of individuals, this should be changed to “the Department”.
The Chairperson suggested, and Members agreed, that there was no need for the paragraph commencing “With regard to coherence in government…”.
Ms Tsotetsi referred to the bullet points under 2.3 and indicated that these bullet points should be worded more clearly.
Mr Ntuli emphasised that Members had wanted to see the linkages, particularly around planning.
The Committee Researcher indicated that there were two matters. This bullet point was reworded to note lack of alignment among the three spheres of government. Secondly, it mentioned lack of coordination of the development funding institutions (DFIs) in the provinces.
The Chairperson noted that the Committee should try to concentrate on the essential items to be included in the report.
Ms Tsotetsi thought that the second and third bullet points were talking to the same matter.
Mr Gcwabaza suggested that bullet point 2 should be removed and that bullet point 3 should be amended, and the NGP highlighted the central role that government must play in the economy, and acknowledges the importance of the private sector in achieving government’s objectives.
Ms Tsotetsi noted that where the increase in oil prices was mentioned, but Members had been concerned about the potential damage to be done.
Mr Mabasa wondered if the paragraph was needed at all. Variables were always present to affect the economy and it did not add much.
Members agreed to delete that bullet point.
The Chairperson questioned what was meant by the next point, about the infrastructure as enabler for economic development.
Mr Mabasa did not think that this was needed.
The Chairperson said that the next bullet point could also be removed.
Mr Mabasa noted that expanded public works were not under the direct influence of the Committee, and suggested that this bullet point could also be deleted.
The Chairperson suggested changes to the wording of the next bullet point, regarding to the need to change apartheid spatial development patterns. She came back to the wording here later.
Mr Gcwabaza said that the next bullet point did not correctly reflect what he had said. Members agreed to change this to note their concern that the Strategic plan was not speaking to regional integration.
The following bullet point about accommodation was shortened.
Members agreed to delete the last three bullet points were deleted, and Mr Mabasa indicated that this showed how important the discussions today had been.
The Chairperson asked that the headings be revised. Paragraph 2.3 should be headed “Discussions” and some of the specific issues should be placed under paragraph 2.3.1. Then the responses to those issues should be set out in 2.3.2, headed “Responses”.
Mr Ntuli noted that the responses were not always given, in the meeting, directly in answer to questions. There was, in his view, no need to delete general responses that may have been given.
The Chairperson pointed out that some of the responses reflected in the report were not correct. For instance, in relation to the National Youth Development Agency, the Minister had indicated that this Department could not respond. She did not think the paragraph relating to lack of communication was correct.
The Chairperson asked that Members return to the issues raised, as she wished to revisit the point about the oil prices. The point was how government intended to mitigate challenges to be brought about by the increase in oil prices, which had the potential of impacting negatively on the Gross Domestic Product (GDP) and would in turn have consequential effects on job creation, economic growth and the income distribution gap.
The Chairperson then asked Members to look at the responses (under paragraph 2.4). She noted that the response on the NYDA must be deleted, as well as the item for lack of communication.
The Chairperson asked the Committee to turn to the recommendations on page 25.
The Committee asked whether they should be slotted in under the discussions on each of the entities, or under a general heading at the end.
Members noted that many issues were inter-related. As long as they were formulated clearly, he thought it would be acceptable to put in one set of recommendations on page 25.
Mr Ntuli noted that there were many different observations and responses throughout the report. He asked how this had been done in the last report.
The Committee Secretary said that this had been put at the end in the last report, but that this report had dealt only with the Department, whereas the entities were dealt with separately.
The Chairperson thought it made sense to include separate recommendations under each section of the report.
Mr Mabasa thought that these should be related to the points in 2.3, as now revised. There was no need to include a recommendation on every matter of observation. However, he would like to propose the inclusion of a recommendation that the Department should strengthen efforts to that there should be better alignment and integration of the plans and programmes of the national, provincial and local government.
Mr Gcwabaza thought that the next recommendation should seek better coordination among the DFIs across the three spheres.
Mr Mabasa said that it was necessary for Khula, for instance, to develop a better working relationship with its counterparts.
The Chairperson noted that there were not DFIs at local government level.
Mr Mabasa said that the Committee had always been concerned that there should be fluid execution of functions. At the local level, there was some function that should be in the Integrated Development Plans (IDPs).
The Chairperson said that it was not correct to talk of DFIs at local level, and asked that the recommendation be changed to read: “ensure better coordination and collaboration among the DFIs at national and provincial level and within provinces”. .
The Committee Secretary noted that the Industrial Development Corporation (IDC) had said that it was helping municipalities.
The Chairperson pointed out that it was assisting with Local Economic Development (LED), and not dealing with institutions.
Mr Ntuli said that many provincial governments were not aware of the existence of DFIs.
The Chairperson noted that integration of communities was not really working, especially in the former homelands. The lower-income households remained the same people, still found in the areas where they had been pre-1994. Special focus should be given to those areas. She asked for the inclusion of a recommendation that a special report on the Department’s efforts to change the spatial dimensions, especially in relation to homelands and low-income areas, be made to the Committee within six months.
Members agreed that there was a need to have a recommendation on time frames around finding accommodation, as the entities had raised similar issues. There was a need to speed up processes of finding accommodation, to address the challenges. Members discussed time frames, and agreed that a report on progress must be furnished within three months
Members agreed that another recommendation was needed on improving communication with cooperatives and small businesses on DFI services.
Mr Ntuli suggested that DFIs must have community outreach programmes, as communities were not aware of their services.
Discussion on quorum and finalisation of report prior to 15h00
Members stopped discussing the report at this stage, and asked if it was necessary to have a separate report on the entities. Many of the issues overlapped, and there may not be time to consider them during this meeting.
Members discussed whether there was now a quorum, and what the requirements were in relation to having a quorum, as some of the Members had by now left.
The Chairperson suggested that the report of the Department could be considered outside of the report of the entities. That would mean that the Committee, if it found a quorum, could meet the deadline of 3 pm, to put this on the ATC, and consider the report of the entities at a later stage.
Members agreed, as it would take time to give full justice to the strategic plans of the entities.
Continuation of discussions on draft Report
Whilst the Committee was waiting for a quorum, the Chairperson asked Members to move to paragraph 3, on budget vote 28. She asked the Committee Secretary to explain the difference between the two tables on page 6.
Mr Gcwabaza asked why the transfer from the Department to entities was mentioned on page 3, instead of being included under the entities on page 6.
The Committee Secretary explained that this was because it was in the strategic plan.
Mr Gcwabaza suggested that the table on page 3 should be removed, and should instead be inserted under the entities.
Mr Gcwabaza then noted that a comparison of the table on transfers just removed from page 3, and Table 3 on page 6 did not show correlation of figures. He cited the figures for Khula.
The Chairperson explained that the figures for Khula and Khula Direct must be added together
Members agreed that the tables on page 6 were acceptable.
Members considered issues on page 7. Technical amendments were made to improve the wording of the introduction to the budget vote. Members noted that the reference to Outcome 4 must be corrected, as it was not part of a strategic framework.
Mr Mabasa suggested either that the sentence should stop at “New Growth Path”, or that the reference to “key strategic framework” was deleted, in which case Outcome 4 could be included.
The Chairperson said that the Department had mentioned this as an achievement. She said that Outcome 4 would have to be explained, and extra wording was added in.
Mr Mabasa said that there were two-dimensional questions asked by Members. Against each of the issues raised by Members, he thought that separate responses should be included.
The Chairperson said that the points raised in paragraph 3.1 did not really ask for answers, but were asking for clarity or raising concerns. She asked if Members were happy with the responses recorded under paragraph 3.2.
Mr Mabasa thought that the Committee wanted to quantify targets and outcomes to assist it in measuring progress. He also suggested grammatical changes to the third point.
The Chairperson asked if the Department had over- or under-spent on appointment of staff. She thought that it had under-spent, and asked that this be checked. She did not think that the question and response had been correctly captured. She asked the Committee Secretary to check the recording.
The Chairperson asked, in the meantime, that this question and response should be deleted from the Report.
Mr Mabasa noted the point on the review of the organogram, and said that now this had been received. He wondered if it was necessary to include this point, as it had subsequently been included. He then suggested, and Members agreed to, revised wording for the next point.
Members then moved to debate paragraph 4, relating to the organisational structure of the Department.
The Chairperson thought that there was too much repetition about the organogram and organisation
She pointed out that bullet point 3 under paragraph 4.1 should be removed, as it was a side issue. She noted that although Members had asked about issues unrelated to the organogram, the Committee should have concentrated on the organisational structure.
Mr Gcwabaza asked for deletion of part of the bullet point relating to vacant funded posts.
Minor changes were made to the following three bullet points.
Mr Mabasa asked for a change in wording relating to contract workers, as it was important to know about the mechanisms to retain them and convert their positions to permanent positions.
Changes were made to the headings and some content in paragraph 4.2, dealing with responses.
The Chairperson noted that no specific question appeared around recruitment, but a response on this was given. It was very important to include these points. Changes were made to the wording, around the processes, and the vetting issues.
Mr Mabasa suggested, that in relation to the establishment of the Economic Development Institution, the wording should e changed to reflect that the Department was committed to the establishment of the Institution.
Mr Mabasa noted, under the challenges highlighted in the Auditor-General’s report, that it was not necessary to include comments on the dedicated gender official.
The Chairperson asked Members to include a new section on recommendations for the budget and organogram. She asked for inclusion of a recommendation that the time taken must decrease to a maximum of three months, to comply with the President’s requirement to fill posts as a matter of urgency.
Mr Tsotetsi asked for inclusion of a recommendation to achieve gender balances at senior management level.
Mr Mabasa said that the point was made that the organogram had to improve the appointment of the disabled, women, and appointment of Africans. He suggested wording that careful consideration must be given to fulfilling equity requirements for gender, disability and race.
The Chairperson asked that the Department must brief the Committee, by the end of the first quarter of 2011/12, on progress on the establishment of the Economic Disability Institute.
Mr Gcwabaza noted that wherever appropriate, the Department must convert contract workers into permanent workers.
The Chairperson asked Members to consider recommendations on the budget. She pointed out that the committee had been concerned about the medium term allocation for Khula and Samaf. A new recommendation was added that the Department should increase the allocations to Khula and Samaf to ensure that they could effectively meet their mandate.
Adoption of report
The Chairperson noted that two extra Members had now joined the Committee. She summarised that the Committee had been dealing with the Report since Wednesday, but had not been able to finalise it.
Members proposed, seconded and adopted the Committee’s draft Report as it related to the Department of Economic Development, but not the entities, as amended.
The meeting was adjourned.
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