Committee Report on Department of Small Business Development, Small Enterprise Development Agency & Small Enterprise Finance Agency: discussion

Meeting report

After apologies were read Ms N November (ANC) expressed concern over the absence of Mr S Bekwa (ANC).

Mr X Mabasa (ANC) asked if Mr Bekwa sent a formal apology for his absence.

The Chairperson replied that any member who had to be absent from a meeting had to apply through the Committee Secretary. Mr Bekwa did not send a formal apology.

Mr Mabasa said the issue had to be followed up.

The Chairperson said Mr Bekwa was a new member and due to lack of experience needed assistance to understand the Parliamentary process.

Mr T Ramokhoase (ANC) commented that there were other Portfolio Committee meetings he was meant to attend that morning and asked if his presence at this meeting was not in contradiction to the policies of Parliament.

Mr Kunene (Committee Secretary) replied that an application was forwarded for permission to sit for the meeting. There was a directive that if a Portfolio Committee wanted to sit over the budget vote reports it could go ahead.

The Chairperson asked if there was a common decision on SAWEN as the Committee requested that its Strategic Plan be submitted in writing. SAWEN had a Conference to attend abroad on the 13th and would not be able to attend the Committee meeting on the 12th.

Mr Mabasa said SAWEN was meant to cancel other tasks it had in order to present to the Committee on the 12th.

Ms November said SAWEN had to be present to present their paper to see that they are in line with the new vision of the Department of Small Business Development. SAWEN was the reason the Committee submitted late.

Mr Ramokhoase said the Conference attendance was an internal matter for SAWEN to resolve as it had to present to the Committee on the 12th.

Mr Mabasa said the Deputy Minister was at liberty to attend the Conference but SAWEN had to present to the Committee on the 12th.

The Chairperson commented that the actual work that needed to be done was not prioritised by SAWEN. The Strategic Plan of the Department was not aligned with SAWEN’s Strategic Plan. There was no coordination between the Department and SAWEN.

The Committee decided that SAWEN must present to the Committee on 12 May 2015. The Deputy Minister was not obliged to attend as she had Cabinet responsibilities.

Committee Report on Department of Small Business Development, Small Enterprise Development Agency & Small Enterprise Finance Agency

The Chairperson tabled the document for consideration.

Mr Mabasa proposed that the title of the draft report be reduced while the Department and its Entities be made subtitles.

The Chairperson said the value of the Government was Batho Pele so the value of the Department should be the same as the Batho Pele rather than Customer focus as stated by the value. Customer focus was meant for a retail shop but for Batho Pele it was People first.

Mr Mabasa commented that the first sentence in the second paragraph under introduction was too long and should be reworked.

The Chairperson noted a grammatical error on page three under ‘purpose of the Budget Vote’.

Mr Mabasa noted excessive use of the word ‘to’ and suggested it be replaced with ‘which will’ and ‘thereby’ in the first sentence under Strategic Outcomes-Oriented goal.

The Chairperson said there should be consistency in the use of terminologies so the word “plan” should be replaced with NDP to avoid confusion.

Mr Mabasa suggested that the last sentence under page three be restructured to include ‘the creation of decent employment’.

The Chairperson said ‘the creation of decent jobs’ was ANC’s language, which should not be different from the NDP’s language that stated ‘creation of decent employment’.

Mr Xolisile Mgxaji, Content Advisor, explained that he was trying to maintain consistency with the language used by the Entity and Department by using “employment” rather than ‘job’.

Mr Mabasa asked if an original Act must be quoted when there are amended Acts.

Mr Mgxaji replied that the original Act would be used as amended.

Ms November noted a typographical error on agro-processing on page four.

Mr Mabasa proposed that the words “wage goods” be replaced by “Human resource” on page three as ANC would not want to see wage increase as a hindrance.

Mr Mgxaji explained that “wage goods” was an economic term as wage goods meant production output.

The Chairperson commented that wage goods be replaced by Human resource in order to avoid misinterpretation by labour movement.

Mr Mabasa proposed that ‘economy growth’ be added to the second sentence under page four.

Mr Mgxaji replied that the line should be left, as there were other factors of the economy such as GDP, employment etc. Economic growth was measured by GDP, which was not the case in the context of the report.

The Chairperson proposed that agriculture be added to the sectors listed. She changed the sequence to agriculture, agro-processing, manufacturing, mining and service sectors.

The Chairperson suggested that the third sentence in the second paragraph on page four should include “because it is the largest unit in the Department “

The Chairperson corrected the bulk of the Department’s expenditure to R2 billion from R2 million under Non-financial and financial support for small businesses and cooperatives.

The Chairperson asked if the Departments budget excluded support to agricultural small businesses.

Mr Mgxaji replied that the budget supported small-scale farmers.

The Chairperson said the Department had failed to include in its Strategic plan support for agricultural small business; it had focused on mining, which was supported by other departments. She asked the content adviser to analyse the budget allocation of the Department and why Cooperatives got 2% of the budget.

Mr Mgxaji explained the budget analysis. The trend of outcomes over time should be measured with the budget allocated. The targets must align with the budget allocated. The majority of the budget must be in the core programme of the department.

Mr Ramokhoase did not understand why the department had difficulty in doing what was expected when there were clear mandate and instructions on how resources should be allocated.

The Chairperson said the Committee should ensure that the chunk of the budget went to the core functions of the Department. The support service should get 20% while the core function got 80% of the budget. She asked if the Department’s budget followed that pattern.

Mr Mgxaji replied that the Department’s budget allocation in total followed that pattern.

The Chairperson suggested that the second sentence under bullet point 9.3 be restructured to ‘this will be achieved through diligent implementation of programmes and implementation plans’.

Mr Mabasa asked if the Department was heading on an impossible journey in terms of resources.

The Chairperson asked if SAWEN was an Entity or a programme.

Mr Mgxaji replied that SAWEN was a non-profit organisation of the Department so an entity of the Department.

Ms November suggested that the Chairperson review the report and revamp where necessary.

Recommendations
Ms November recommended that SEDA must build its own capacity to eliminate using consultants to service its client base.

The Chairperson recommended that the Department had to speed up the process of establishing Cooperative Development agencies. There was a need to move with speed to finalise the process of developing a cooperative academy. Absence of a cooperative academy would have dire consequences in the performance of cooperatives and the role they were expected to play in the mixed economy. The investment to cooperative should be equal to the task they were expected to play to bring about a mixed economy in South Africa.

The Chairperson recommended the establishment of a Cooperative Bank in South Africa without delay because the financial support from a Cooperative Bank speaks to a radical economic transformation.

The Chairperson commented that Cooperative banks, cooperative academy and agencies were important instruments that required budget allocation.

The meeting was adjourned.